The 2020 edition of the World Retail Banking Report, cooked by Capgemini and Efma, explores how retail banks are facing pressure to transform, as new entrants focused on customer experience gain significant market traction while the current pandemic environment drives consumers to digitally interact more with their banks.

Traditional banking models face competition as new entrants’ innovative approach to customer experience takes center stage

Digitally native, non-traditional FS players are testing the old guard by offering a delightful customer experience (CX) and gaining significant market traction. Within today’s unprecedented COVID-19 environment, the stakes are particularly high in a fully-digital economy.

Banks are facing significant cost pressure today as net interest margin (NIM) declines. And as NIM compression forces banks to transform their cost base – fast – the need to invest in high-powered remote access has never been more urgent.

Pulling information from multiple channels and siloed business units depreciates data quality and limits banks’ ability to offer timely and hyper-personalized customer engagement.

Risk aversion, ineffective collaboration and slow innovation impede growth.

 

Platforms models empower firms to respond to uncertain times effectively and with agility

Platform-based models enable firms to create, cultivate, and monetize two-sided network effects.

Build, buy or share platform implementation merits needs-based evaluation.

- Build: In-house development through greenfield or brownfield methods.

- Buy: Acquire a platform based on capability-driven requirements or run the acquired platform firm as a standalone business.

- Share: A ready-to-use platform form another firm can significantly reduce implementation time and costs.

Banks seeking a sustainable platform often face challenges around security, culture, systems and vision.

 

Transform the bank’s core before platform implementation

Despite legacy system challenges and the advantages of a modern core, banks are reluctant to take transformative action due to high resource requirements and risks associated with inefficient implementation

A phased approach can help banks to achieve time-sensitive goals with minimal risks and measurable outcomes. Incremental implementation will progressively transform the core system and leverage the API network to build an open and scalable platform.

An open platform – powered by a high-performing core – positions banks to orchestrate a customer-centric, blended ecosystem of relevant financial and non-financial services, this is Open X.

 

COVID-19 has accelerated the urgency for digital transformation

While banks struggle with operational challenges and branch closures, those that have adopted an open API-enabled platform are delivering virtuel (digital) services at scale.

Inventive Banking can help minimize business disruptions by enabling firms to move beyond open baking to embrace Open X during unpredictable situations.

 

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The report is available HERE.

 

Source: Capgemini


Publié le 16 juin 2020