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The Role of Digital Operations Solutions in Fintech Landscape

The Role of Digital Operations Solutions in Fintech Landscape

The landscape of banking operations has experienced a significant evolution over the years. In the past, banking operations were predominantly manual and paper-based, with long processing times and limited accessibility. However, with the advent of technology, the banking sector has undergone a paradigm shift, and digital operations solutions have become indispensable for banks to stay competitive in the fintech landscape. In this blog, we will explore the transformation of banking operations, the need for leveraging technology to facilitate digital operations, the accelerating role of GPT AI, the challenges ahead, and possible solutions for leading banks to address these challenges.

Enhancing Digital Operations Management

Partnering with mature BankTech companies like Maveric, who offer comprehensive competencies in finding niche growth opportunities and capitalizing through digital operations, has brought competitive differentiation for leading BFSI firms. 

The Past and the Present: A Transformation in Digital Operations Solutions

In the past, banking operations were heavily reliant on physical processes. Customers visited brick-and-mortar branches to carry out transactions, and paperwork was prevalent for account opening, loan approvals, and other financial services. This manual approach took time and limited the scope for innovation and scalability.

In contrast, present-day banking operations have undergone a digital revolution. The rise of technology and the widespread adoption of digital solutions have transformed how banks interact with their customers. Online and mobile banking have become the norm. Customers can access their accounts, transfer funds, and conduct transactions anytime. Implementing automation and data-driven analytics has streamlined internal processes, resulting in faster, more efficient banking operations.

Leveraging Technology for Digital Operations and Platforms

The entry of nimble fintech companies and evolving consumer expectations have heightened the need for traditional banks to embrace technology for digital operations. Fintechs have disrupted the banking landscape by offering innovative and customer-centric solutions that challenge conventional business models. To remain competitive, established banks must adopt digital operations solutions that provide seamless customer experiences, automated back-end processes, and data-driven decision-making.

Digital operations solutions encompass various technologies, including AI-powered chatbots for customer support, blockchain for secure and transparent transactions, robotic process automation (RPA) for automating repetitive tasks, and cloud-based infrastructure for scalable and cost-effective operations. By leveraging these technologies, banks can enhance operational efficiency, drop costs, and deliver a superior customer experience.

The Accelerating Role of GPT AI in Digital Operations Services

GPT AI, powered by advanced natural language processing and machine learning algorithms, has further accelerated the case for embracing technology in digital operations. GPT AI can analyze vast amounts of unstructured data and generate human-like responses, enabling banks to offer personalized and contextually relevant customer interactions. This technology can be deployed across various touchpoints, including customer service, marketing, and compliance, enhancing the overall efficiency of banking operations and creating a more engaging customer experience.

Challenges and Possible Digital Operations Solutions for Leading Banks

While digital operations solutions offer numerous benefits, they also present challenges that leading banks must address to stay ahead in the fintech landscape. Some of the key challenges include:

Security and Data Privacy:

With increased digitization, banks face heightened cybersecurity risks and the need to comply with data privacy regulations. Robust security measures and continuous monitoring are essential to safeguard sensitive customer data.

Legacy Systems Integration:

Many established banks still need to rely on legacy systems that can hinder the implementation digital operations solutions. A gradual and strategic approach to modernizing these systems is necessary for seamless integration.

Talent and Skills Gap:

The rapid pace of technological advancements requires a workforce equipped with digital skills. Leading banks must invest in upskilling their employees to ensure they can effectively utilize and manage digital operations solutions.

Customer Education and Adoption:

As banks introduce new digital solutions, they must educate customers about the benefits and usage. Proactive customer engagement and support are vital to driving adoption.

Conclusion

In the dynamic fintech landscape, embracing digital operations solutions is no longer optional for banks; it is a strategic imperative. The transformation from manual to digital operations has revolutionized the banking sector, offering increased efficiency, enhanced customer experiences, and a competitive edge. GPT AI, in particular, has played a significant role in accelerating this transformation. While challenges lie ahead, leading banks can address them by prioritizing security, integrating legacy systems, upskilling their workforce, and ensuring customer education and adoption. By embracing technology-driven digital operations solutions, banks can secure their position as industry leaders and effectively cater to their customer’s evolving needs and expectations.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Drive experience-led growth in digital banking.

Drive experience-led growth in digital banking.

In today’s digital era, providing exceptional customer experiences has become a key differentiator for banks. To achieve growth and success in the digital banking landscape, it is essential to prioritize experience-led strategies. This blog post will explore actionable strategies to drive experience-led growth in digital banking, focusing on enhancing customer engagement, personalization, seamless omnichannel experiences, and leveraging emerging technologies. Partnering with domain experts in Digital Transformation like Maveric Systems brings a stellar advantage for leading FIs to forge ahead and strike early strategic initiatives.

1. Customer-Centric Design:

To drive experience-led growth, digital banking must prioritize customer-centric design principles. This involves understanding customer needs, preferences, and pain points to create intuitive, user-friendly interfaces. Here’s how banks can achieve this:

  1. User Research: Conduct thorough user research to gain insights into customer behavior, expectations, and pain points. This helps design digital banking platforms that align with customer needs and provide a seamless experience.
  2. Simplified Onboarding: Streamline the onboarding process to make it quick, easy, and hassle-free for customers. Utilize digital identity verification, e-signatures, and self-service options to reduce friction and enhance the onboarding experience.
  3. Intuitive Interface: Design user interfaces that are intuitive and visually appealing. Implement clear navigation, logical information architecture, and interactive elements to effortlessly guide customers through their digital banking journey.

2. Personalization and Data-Driven Insights:

Personalization is a key driver of exceptional customer experiences. By leveraging data-driven insights, banks can provide tailored experiences and relevant recommendations. Here are some strategies to achieve personalization in digital banking:

  1. Data Analytics: Leverage data analytics to analyze customer behavior, transactions, and interactions. This enables banks to understand individual preferences, predict needs, and offer personalized product recommendations and financial advice.
  2. Contextual Communication: Utilize customer data to deliver timely and relevant communications across various digital touchpoints. Tailor marketing messages, product offers, and notifications based on individual customer profiles and engagement history.
  3. Proactive Insights: Use data analytics to provide proactive insights to customers. For example, sending personalized spending alerts, budgeting tips, or investment opportunities based on their financial goals and behaviors.

3. Seamless Omnichannel Experiences:

Customers expect a seamless experience across different channels and devices. Here’s how banks can achieve seamless omnichannel experiences:

  1. Consistent Branding: Maintain consistent branding and messaging across digital channels, websites, mobile apps, social media, and customer support platforms. This builds trust and reinforces the bank’s brand identity.
  2. Channel Integration: Seamlessly integrate various channels to provide a cohesive experience. Enable customers to start an interaction on one channel and seamlessly continue on another without losing any information or progress.
  3. Single Customer View: Implement a single customer view across channels to ensure that customer’s data and preferences are synchronized. This allows customers to pick up where they left off, regardless of the channel they choose to engage with.

4. Embracing Emerging Technologies:

Banks must embrace emerging technologies that enhance customer engagement and deliver innovative solutions to drive experience-led growth. Here are a few examples:

  1. Artificial Intelligence (AI): Utilize AI-powered chatbots and virtual assistants to provide personalized customer support and assistance. These technologies can handle basic inquiries, help with transactions, and offer relevant product recommendations.
  2. Voice Assistants: Integrate voice assistants, such as Amazon Alexa or Google Assistant, to enable customers to perform banking tasks using voice commands. Voice banking enhances convenience and accessibility for customers.
  3. Biometric Authentication: Implement biometric authentication methods, such as fingerprint or facial recognition, for secure and convenient access to digital banking services. Biometrics eliminates the need for remembering passwords and provides a frictionless experience.

 

Conclusion

In the age of digital banking, delivering exceptional user experiences is paramount to driving growth. By focusing on experience-led development, digital banks can outthink others in the competition, build customer loyalty, and foster sustainable business growth. Banks can create delightful customer journeys that leave a lasting impression through seamless omnichannel experiences, personalization, intuitive design, proactive support, and continuous innovation. Embracing the power of experience-led growth will undoubtedly shape the future of digital banking, and those who prioritize it will thrive in the dynamic and competitive landscape.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

 

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Rise of Generative AI – Driving Transformation in Digital Banking

Rise of Generative AI – Driving Transformation in Digital Banking

Artificial intelligence is revolutionizing the banking industry, enabling financial institutions to enhance operational efficiency, improve customer experiences, and drive innovation. Core human brain functions – generating content and brainstorming – are stepping in to the domain of the machines. From medical, financial, legal and relationship advice to more – as the use cases increase- Generative AI will continue to make waves for its ability to generate new, and creative content. In digital banking, generative AI is transformative in automating processes, personalizing customer interactions, detecting fraud, and generating valuable insights.

This blog explores the rise of generative AI and its impact on driving transformation in the digital banking landscape.

Partnering with domain experts in Banking Digital Transformation like Maveric Systems brings a stellar advantage for leading FIs to forge ahead and strike early in their strategic initiatives.

Understanding Generative AI:

Generative AI is a subset of artificial intelligence that creates original and innovative content. It involves training AI models on vast amounts of data and allowing them to generate new content, such as images, text, and even human-like conversations. Unlike traditional AI models that rely on predefined rules, generative AI can produce novel and creative outputs beyond what it has been explicitly programmed to do.

Not exactly new, but Generative AI is on an evolution arc.

Recognize these use cases?

Protecting customers from fraud. Differentiating omnichannel customer experience using AI-tools including Video banking. Empowering wealth advisors with real-time CRM data on mobile apps. Using electronic virtual assistants to handle > 80% of inquiries at a fraction of the cost of the live agents.

These are offering solutions to digital banking for a few years on.  It is only now that large enterprises engaged in AI development, are adopting the approach “Responsible by Design.” Consider Microsoft, which commits to making the promise of AI real—and doing it responsibly. Their approach to AI is based on three principles: meaningful innovation, empowering people and organizations, and responsibility.”

Applications of Generative AI in Digital Banking:

Enhanced Customer Interactions:

Generative AI enables digital banks to provide highly personalized and conversational customer experiences. Chatbots powered by generative AI can engage in natural language conversations, understanding customer inquiries and providing relevant and context-aware responses. These AI-powered chatbots can handle routine customer inquiries, provide product recommendations, and offer personalized financial advice, enhancing customer satisfaction and driving engagement.

Fraud Detection and Prevention:

The rise of digital transactions has also led to increased fraudulent activities. Generative AI can help digital banks identify and prevent fraud more effectively. Generative AI models can detect anomalies and predict potential fraudulent behavior by analyzing historical transactional data and patterns. This enables banks to proactively identify and mitigate risks, protecting customer assets and maintaining trust.

Risk Assessment and Underwriting:

Generative AI models can analyze customer data and generate risk profiles for loan underwriting and credit assessment. By training on historical data and customer patterns, these models can provide accurate risk assessments, enabling banks to make informed lending decisions quickly and efficiently. This helps streamline the loan approval process, reduces operational costs, and improves the customer experience.

Automated Process Automation:

Generative AI can automate and streamline various back-office processes in digital banking. From document verification to data entry and reconciliation, AI-powered systems can generate accurate and reliable results with minimal human intervention. By automating these processes, banks can reduce errors, improve operational efficiency, free up valuable human time, and dedicate it to higher-value tasks, such as customer engagement and strategic decision-making.

Data Analytics and Insights:

The massive volume of data generated by digital banking transactions presents an opportunity for generative AI to provide valuable insights. AI algorithms can analyze and interpret complex data sets, uncover patterns, and generate actionable insights for banks. These insights can enhance risk management, improve customer segmentation, optimize marketing strategies, and drive informed decision-making at all levels of the organization.

Cybersecurity and Threat Detection:

Generative AI models can play a vital role in strengthening cybersecurity defenses for digital banks. AI models can identify vulnerabilities and patterns indicative of cyber threats by analyzing network traffic, user behaviors, and historical threat data. Banks can utilize these insights to bolster their cybersecurity infrastructure, proactively detect and prevent cyber-attacks, and keep customer data safe.

Challenges and Considerations:

While the rise of generative AI presents exciting opportunities, there are important considerations and challenges for digital banks to address:

Ethical Use of Data:

Banks must ensure that generative AI models are trained on unbiased and ethically sourced data to avoid perpetuating biases or discriminatory practices.

Regulatory Compliance:

Digital banks must comply with relevant regulations and privacy laws to protect customer data and ensure transparency in using AI-generated outputs.

Trust and Transparency:

As generative AI models become more prevalent, banks must establish trust with customers by providing transparency about the use of AI and how their data is being utilized.

Continuous Learning and Adaptability:

Generative AI models require continuous learning and adaptation to stay relevant and effective. Banks should invest in ongoing model training, monitoring, and updates to ensure optimal performance and accuracy.

Conclusion

Generative AI drives digital banking transformation, enabling banks to automate processes, enhance customer experiences, detect fraud, and generate valuable insights. As digital banks continue to embrace AI technologies, generative AI will shape the future of banking. By leveraging the power of generative AI, banks can unlock new opportunities for innovation, efficiency, and personalized customer interactions, ultimately delivering enhanced value to customers and staying ahead in the rapidly evolving digital era.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

 

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Banking’s Digital Transformation: Benefits And Drawbacks

Banking’s Digital Transformation: Benefits And Drawbacks

After the pandemic, banks must speed up their digital transitions. Banks, however, will need to revise their front- and back-office business models to keep up with the changes and head off any potential upheavals that may lie ahead. True digital banking and a complete transformation depend on cutting-edge technologies like blockchain, cloud computing, and the Internet of Things.

The customer obsession will continue.

The customer is the focal point of any effective transformation plan. Financial organizations need to optimize their big data to automate business processes and cut expenses as a result of interest rates close to 0%, banking fees reducing drastically, and rising customer expectations. Banks can speed up the creation of omnichannel products, services, and functionality by upgrading their applications using AI, the cloud, and automation. Because of this, the user experience is enhanced, and trust and loyalty are strengthened. Maveric Systems can guide you through a successful digital transformation.

What is banking digital transformation all about?

The term “digital transformation” refers to modernizing a bank’s infrastructure and procedures to serve customers in the digital era better. The use of digital channels for communication with customers, automation of routine tasks, and analytics for gaining a deeper understanding of customer behavior are all examples.

Banking's Digital Transformation: Benefits And Drawbacks

Advantages of Banking Digital Transformation

The modern banking customer can reap many benefits from switching to digital banking.

1. You can use the bank whenever you want: The ability to access your bank account whenever you like is a significant perk of digital banking. The ability to make deposits, see account statements, modify account information, and conduct other financial transactions is available 24/7, not just during regular business hours.

2. More affordable interest rates and charges: Maintenance and transaction fees are typical methods by which banks recoup costs associated with personnel, infrastructure, etc. The convenience of online banking has led to a decline in the need for full-time bank staff and a proliferation of physical bank locations. In light of these reduced costs, banks fully embracing the digital revolution are better positioned to provide their consumers with better rates and fees.

3. Upgraded satisfaction levels among paying customers: Digital-first banks consistently outperform traditional banks in several metrics important to clients, such as ease of use, speed of transactions, and satisfaction with the banking experience. When opposed to using a brick-and-mortar bank, banking digitally is much simpler. Using a digital bank, for instance, only takes a few minutes on a mobile device or computer.

4. Invoice processing systems: Automating your payments is a breeze with digital banks. You can automate the withdrawal of money from your account every month to pay for your regular expenses, eliminating the need to remember to pay them on time each month and risking late payment fees and penalties. You can also streamline your cash flow management by automating vendor payments using a net-30 account.

Disadvantages of Digital Banking Systems

The benefits of digital transformation in banking, such as increased efficiency and streamlined processes, are not without drawbacks.

1. Fears about Safety: Online banking may be more convenient but poses security hazards. There are security gaps that bad actors can use to steal your money, thanks to the internet features that let you access your account and transact remotely. These days, online banking faces numerous cybersecurity threats. In the case of internet banking, for instance, hackers could gain unauthorized access and obtain highly personal information. Malware and ransomware assaults, spoofing, credential harvesting, identity theft, fraud, etc., are some more concerns.

2. Problems with technology may arise. There is some doubt over the dependability of the electronic systems on which online banking relies. Even if the odds of being affected by a technological glitch are low, being unable to access your funds when you need them most can be a significant inconvenience. For instance, if a server outage at your online bank, you could be locked out of your account.

Conclusion

Companies and service providers must increasingly digitize their processes to keep up with the times in a more digital environment. This is especially important in the financial sector, where more and more customers are doing business via mobile devices and the Internet. As a result, financial institutions are racing to implement digital transformation strategies to help them compete and thrive in the modern digital environment.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Digital Operations in Banking: Advantages & Challenges

Digital Operations in Banking: Advantages & Challenges

Here is a story of a bank from the recent past that foretells the industry’s immediate future, especially about digital operations in banking.

In June 2017, a mobile-only bank came into existence in South Korea. In its first 24 hours, 300,000 subscribers signed up. Within two weeks, it had surpassed 2 Mn customers. At that point, the bank had clocked $930 Mn in savings and lent out $710 Mn. In 2 weeks, Kakaobank was in business!

As of today, in a country of 50 Mn people, with economically active population of 25 Mn, Kakaobank has 10 Mn + customers.

Be it any industry, it is obvious that orbit-shifting innovation precedes meteoric growth. But what is not obvious, are the fundamental questions that start it all. In the case of Kakaobank, these questions were: “What is the purpose of a banking business?”, Why sell loans, and the other products? Are we in this business for the money?”

Digital operations in banking are both about clarity and differentiation.   

Today when every other tech. company, social media, or an e-commerce company aspires to become a bank or a variant, a key question pops: is the sector more important or is the customer? The answer comes from the art of thinking clearly, and thinking for the long-term

Kakaobank’s vision emerged bit by bit. They didn’t want to beat their rivals’ rates. They wanted to transform banking by making it totally customer centric. Unlike traditional banks where 60% of outgoings are spent on branch operations and back offices, Kakaobank passed the cost differential to customers from day one. How? Through tech. assessment, risk control, customer experience design, the digital native offered on-demand services through mobile (not even online).

Current outlook.

The 2021 Global Banking Annual Review talks about how legacy financial entities will have to battle declining profits by 20% – 60% before 2025, if they fail to go digital. In fact, a HBR article in 2014 spoke of how 85% of US retail transactions had gone digital.

As if new market players, new regulations, and new technologies that disrupt customer’s expectations and perceptions weren’t enough; the recent virus crises, has brought in more complexities. Not only did digital banking accelerate, but also the use of cash fell, and sustainability and circular economies grew in mass opinion. All these factors have a direct impact on how banks make and spend money, and how their brand is perceived.

Not a question of ‘if’, but ‘when’, as legacy banks embrace varying degrees of digital operations, let’s understand the pros and cons that come with it.

Digital Operations Solutions in Banking – Advantages.

Boost revenues, lower costs.

Basis McKinsey’s executive AI playbook for Banking value, the potential annual value for AI and analytics (both traditional and advanced) is $1 Tn. Digital operations increases personalization exponentially, generates efficiencies via higher automation, reduced error rates, and better resource utilization.

Enhancing customer experiences through uncovering new opportunities

Be it front office (biometrics, natural language processing for doc. scanning, humanoid robots in branches, and conversational bots) or back office (machine learning to detect fraud and cybersecurity attacks, real-time transaction analysis for risk monitoring) leading financial institutions are embedding more and more robotic process automation, virtual interfaces, and machine learning techniques, into their processes.

Beyond retail, digital operations benefits small- or medium-enterprise customers

Today’s mid-size enterprise customers directly benefit from a bank’s digital operations. Here is how: from receiving customized lending solutions, to micro-expression analysis that reviews loan applications, to seamless inventory and receivables management, to being provided with a SME platform to source buyers and suppliers, and getting support in off-banking hours (by AI-powered virtual advisors)

Digital Operations Solutions in Banking – Challenges.

Digital transformation for legacy finance entities is not very different from flying an aircraft and repair it in mid-air at the same time. Consider their predicament: On one hand they are asked to operate with the nimbleness and speed that comes to Fintechs naturally, and on the other, they cannot sacrifice the rigorous demands of scale, security, and regulators.
In fact, across industries, graduating to become ‘AI-first’ or ‘totally digital operations’, calls for a strategic mind shift and putting in place foundational building blocks.

For banks though, the absence (or inadequately functioning) digital operations reveals immediate challenges.

Lack of scale leads to sub-optimal efficiencies

Core systems if not modernized are simply not powerful to operate upwards of 150+ transactions/second. Along with the significant time, effort, and team sizes needed, it takes a long time to provision development and testing environments.

Poor accuracy with lower customer satisfaction scores

High error rates, poor refresh rates, data being silo-trapped and difficult to retrieve, and process are all challenges that mean there is no single source of truth. Moreover, the system is ill-positioned to integrate with external sources, leading to timely (and costly) workarounds.

Longer time to market

Limited software and code reusability across internal teams, and the difficulty in collaborating with external partners, results in poor user experience. When data and services are hard to stitch across functional siloes, legacy players find it difficult to combat market complexity. The result of limited coordination and cross-team testing is longer time to market (cost leakages).

To overcome challenges that prevent digital operations from going organization-wide, banks must, one, invest in transformational capability stack and two, aligning that stack for value creation.

Learnings from Kakaobank.

As the Kakaobank example instructs, the four indicators of successful digital banking operations are, profitability, personalization at scale, omnichannel experience, and speed that comes from innovation.

 

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