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Top 3 Technology Focal Areas in Banking in 2021

Top 3 Technology Focal Areas in Banking in 2021

It is crystal gazing time and as COVID pandemic would indicate yearly predictions can be a risky exercise. 2020 saw forced changes across Industries and geographies. For cost optimizations retail banks embraced intelligent and leaner operational models by leveraging open ecosystems. Cloud migrations with their advantages of security, data analytics, and storage assisted banks to pursue digital transformations, revamp business models and accelerate innovation capabilities. Additionally, Banking as a Service (BaaS) is enabling banks to monetize their data, services and infrastructure as consumable API’s for third parties, and co-create new products with faster time to market.

Along with the megatrends that COVID accelerated, namely Digitization, workplace virtualization, Safety surveillance, Cost reduction focus and new-age ecosystems; here is a round-up of the top three technology focus areas in the Banking sector.

  • Use of AI and Data for Hyper-personalization: Micro-segmenting as a digital strategy will underpin the shift from mass production to mass personalization. Banks that treat customers as segments by themselves will gain loyalty, increase lifetime value and reduce churn. 2021 will see banks ramping their data capabilities and advanced analytics to tailor real time financial recommendations. Surgical precision will permeate hyper-relevant content, hyper-specialized products, customized pricing.
  • Green Banking: Expect this year to be an inflection point banks to focus on managing climate risks, adopting green operations, and developing green products. From motivating customers to opt for zero emission vehicles with clean-energy loans to zero processing fees on electric vehicles, to manufacturing cards from recycled plastic, and creating a corporate position for a chief sustainability officer; corporations world over are pursuing green banking to counter environmental and climate risks by incorporating them into their corporate governance.
  • Voice Technologies and Autonomous finance: Technology trends, often, are driven by Gen Z habits. Present day voice assistants tell us everything from weather forecasts, stock market data, plays songs or offer road directions. In 2021, expect voice technologies to play a larger role in autonomous finance. They will reshape the way people interact with money and its service choices. From basic information, and account services, to using voice as one of biometric data security features, the ways of autonomous finance to power customer convenience will permeate daily banking processes. Banks will make serious progress with AI and ML managing user money across the vast portfolio of products and services.

In summary, 2021 will be a year of consolidation of all that the previous year accelerated – Digital banking, E Commerce, Contactless payments, AI advances in security etc.

In fact, as the year progresses, expect financial organizations to consolidate gains that have come from: Redefining the future of workforces and workplaces, humanizing digital experiences, and the neo-normal benchmarks set for Customer centricity.

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Accelerate Next: A Maveric Banking Success Story in COVID times

Accelerate Next:  A Maveric Banking Success Story in COVID times

The century’s black swan event, Pandemic, continues to force deep changes in the banking industry – Governments have swung in with targeted interventions, customer preferences have been altered to favor digital channels, and technology is enabling businesses desperate for continuity and also powering game changers that seek advantages in the new next.

In all of the gloom and doom development, here is an encouraging story. It comes from Maveric, a two-decade seasoned banking sector technology services consulting and integration partner.

Within Maveric, the ‘Accelerate Next’ philosophy permeates deep into its brand promise, customer strategy, and operational rhythms.

Accelerate next is constructed of and evidenced when three vital enterprise-wide strengths coalesce: Conscious contextualization, Comprehensive competencies, and Core commitment.

This piece will elicit one of three mentioned pillars – Core Commitment.

But first the context:

One of Maveric’s customers – A Tier 1 global bank catering to consumer banking, with the largest credit cards customer base in the US, and a strong presence in the Mortgage Industry, collaborated with Maveric during the Pandemic. In addition to their current programs, because of COVID 19, all US banks were inundated with multiple COVID related programs which includes stimulus package rollouts, small business investments support etc.

The ‘new situation’ mandated for multiple programs to be launched, causing enormous workload for technology teams in Consumer Banking.

Clearly the stakes for the Bank was its brand image and customer’s business survival.

From a Maveric POV the challenges were new and numerous: From not being able to work from office, next to nil time face time for interactions, knowledge transfer or joining orientations. The logistics challenge aggravated further due to the Virus’s high exposure risk. This meant that work from home was fast becoming the norm. As the programs count steadily soared, the headcount for the project’s delivery remained unchanged.

In summary, despite the growing exigent situation, the need to continuous deliver programs with desired quality (without additional funding), meant re-wiring for the new normal.

Maveric Solution measures:

  • Focussed BCP initiatives (48 hours and workforce transited to Work-from-Home)
  • Stepping up Stakeholder Governance (Program wise leadership calls for reporting on delivery updates, employee well-being, productivity metrics)
  • Depth of Management attention for Stakeholder engagement (Consistent connects across Strategic, Tactical, Operational)
  • One on One connect with customer key stakeholders (Maveric’s sponsor director started weekly touch points with the client director for risk assessments and proactive resolutions)
  • Program and Progress Reporting (Real time dashboard reporting institutionalized along with a daily risk mitigation plan)

As one of the three levers of ‘Accelerate Next’, the Maveric Intervention exemplified ‘Core Commitment’; a partnership attribute that comes from high flexibility and stamina, and demonstrated through a culture of ownership and empowerment.

For more details, refer to the full case study.

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A culture of accurate data leads to precise decisions

A culture of accurate data leads to precise decisions

No matter we realize it or not, our lives run on data.

Every time that we buy, we pick entertainment options and vacation spots, we make friends on social media, we recommend products and services, we find dating partners, we apply for jobs, or we locate houses to move in to, we are deciding. And these decisions are influenced through the innumerable data algorithms and recommendation engines that silently trawl our online personas, historical decisions, past behaviours, and social preferences, to churn out the future-likely choices.

In 2006, Clive Humby, the British Mathematician and an entrepreneur in Data Sciences, coined the phrase “Data is the new oil”. He elaborated by saying, “like oil, data is valuable, but if unrefined it cannot really be used.Oil has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; so, data must be broken down and analysed for it to have value.”

Arguably Clive himself wouldn’t know till much later the towering impact of his prediction. Let’s exemplify that effect by two statistics alone:

  • New information generated per second for every human being is 1.7 megabytes. Considering there are over 7.7 billion people on the planet, this amounts to new information equivalent to more than 25,000 hour-long videos. Per second!
  • Today, nearly 70% of leading enterprise companies have a chief data officer (CDO), according to a study from New Vantage Partners. That’s up significantly from 2012 when only 12% did.

Everyone wants to talk about the insights and value they can derive from data. But what about Bad Data? And the price it exacts?

Bad data is inaccurate data, missing data, wrong or inappropriate data, non-conforming or duplicate data. Bad data is costly.

In 2016, IBM estimated the yearly cost of poor quality data (to the US economy) as $3.1 Trillion. Gartner put the average cost for poor data at $9.7 million/year/business. These are stunning figures.

So given the primacy of data in decision making and the heavy penalties of bad data (across a company’s financial resources, efficiency, productivity and credibility), let us consider what makes a data culture.

Simply put, a data driven culture moves data to the center of decision making.

It treats data as a main resource (as opposed to gut or instinct) for leveraging insights across all departments.

Best data driven companies embed a cultural framework that rivets the following nuts and bolts: easier data access, clear governance around data usage and definitive quality standards, improved data literacy, and finally, incorporating apt technologies to prepare and analyse data.

Next let us examine few ideas that mature Data cultures use to approach clarity of purpose that enhances their effectiveness, and also increases speed to fruition for their analytical efforts.

These data culture practices are what eventually leads to precise decisions.

  • Data culture is not about cool experiments. The fundamental objective in collecting, analysing and applying data is to make better decisions. Period. Volume in data lakes by themselves mean little if the central focus is not on solving the business problem. Always.
  • Data culture is both top driven and bottom swelled. True and repeated commitments from the board and the C-suite is non-negotiable but it is in democratizing data that the richer gains lie. Like staple diet forms, data should be missed if not consumed every day. Seeding projects, instigating new conversations, prompting innovation by applying data to challenges, imbibing data-belief, celebrating data-victories and removing data bottlenecks – all are critical in sustaining a data culture
  • Early acceptance of Risk. Mature data culture organizations understand the imminent risks that come from getting analytics wrong. They accept the support and remedial costs. Punitive measures in these companies are replaced by building alert systems. Higher levels of sophistication are wired into their planning-processes-practices. Ground level structures are fortified to use data with assurance and freedom.
  • ‘Culture Connectors’ are critical. To bridge the world of the data scientists to the on-ground users, a few high-credibility data ambassadors are enlisted. These change agents are catalysts cum coaches that help others to embrace data culture.
  • Rewiring the talent organization. It is usual practice to deliberate on touchpoints that interlaces roles. Constructive data-driven engagement practices are used to bind disparate organizational jobs and functions.

In sum, today’s businesses accelerate through precise decisions when on-demand data is engineered for accuracy. This marriage of conscious contextualization and comprehensive competencies works when it is backed by intersecting domains and tech. expertise.

Being able to do this, day in and day out, is what creates a robust data culture.

This was originally published on MEA-Finance.com website and is being reproduced here.

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