While the nimble and light-footed risk-takers have already embarked on the digital journey, the hesitant and the cautious are still waiting and watching, though all packed up.
This article looks at five points to consider before packing up for the digital journey.
- Accept the new persona
Banks are no longer perceived as monumental providers of all financial services. The persona of the bank is changing day by day, not because it lacks significance, but because its services are embedded and contained within fintech use cases that are emerging to please the customer of the future. Banks have to acknowledge this new identity and role they have in the service ecosystem and change their business models as a consequence.
2. Learn to innovate in spite of core constraints
Banks who moan about the constraints of their existing cores are losing out to their peers who, while upholding their current cores for legacy customers, are embracing next-gen cloud-hosted core platforms to cater to their next-gen customers. Not only would banks have to pay through their noses for big-bang transformations of existing core systems, there is also the consideration of complexity and time. Above all, leaving behind legacy customers is a big price to pay, especially for the smaller banks. Banks that learn to innovate amidst core constraints get the benefit of early adoption.
3. Don’t rip and replace legacy systems at one go – make it pragmatic
The common factor to all successful transformations is the piecemeal, lightweight but lucid and realistic nature. While ripping the existing core is an option, such transformations get exponentially complex. Smaller chunks of transformation, prioritized according the vision of the bank and the industry demands yield better success rates which in turn keep the fear of failure at bay for banks.
4. Launch your services on a hold-all platform
Banking platforms are the powerful carryall that safely harbor your banking services from payments to digital accounts. Often called the digital core platforms, these host an ensemble of the best-of-breed applications that suit your needs. You’re no longer restricted to frustratingly core-limited offerings. Not only do they support open-banking APIs making integrations easier, they are also high on security and scalability, being cloud-native in nature. Banks can either choose from standalone digital cores or ones that seamlessly complement with existing cores.
5. Tailor experience and functionality for the new-gen customer
Digital experience is not just skin deep. The next-gen customer is also seeking good functionality and is on a constant quest for a service that suits his/her personal needs. Your business model revamp should not just focus on providing experience, but also open gateways to serve the unserved and the underserved with bespoke functionality.
Finzly recently helped Lead Bank, a community bank that is a forerunner of digital innovation, to help them seamlessly integrate their legacy core to a modern, alternative banking platform. The platform helped them to partner with meaningful fintech partners, who provide services aligned to the ethos of Lead Bank, thus allowing the bank to espouse the community banking spirit with the help of technology.
Suja Ramakrishnan
Finzly
Speak to Finzly to find out more. Reach us at: hello@finzly.com