In a world of priorities, banks are trying to enhance their customer’s experience through digital principles and enhanced security features. With the presence of so much of data, there lie several challenges where the bank needs to ensure the maximum use of data, to better understand their customer and yet secure the data to ensure it’s remain within the bank and can’t be used unethically. Listen to Sharon Kimathi and Ashish Cherian talk on the balancing act that banks face in the current banking climate.
Ashish Cherian: Legacy architectures which banks set up in the 90s aren’t capable of dealing with the technology and the innovation that is currently available. They handicap them on one side, while banks are passing intense pressure from non-financial entities. We have Google and Amazon who have settled in the payments domain. We already several challenger banks offering quick onboarding processes and faster services, especially in the UK.
Nowadays there are also so many lending and borrowing organisations. They specialise in these services. P2P lending is an up and coming areas for organisations and challenger fintech institutions. Hence, the traditional banks are in danger of losing their customers or will find it tough to retain them. Customers just want better experiences, they don’t really care about loyalty, especially among the millennials. What do you think would be the strategy for a bank in today’s age? What would you do, as a bank executive?
Sharon Kimathi: I think when you consider the traditional banks and their legacy systems , the challenge lies in resources and if and how they can use them. New systems also have their issues. Traditional banks, can rely on a vast amount of employees, who are well educated and who are working on cleaning up their legacy systems and ensuring that they can rely to a certain extent on what they have used before. The thing with upcoming banks, is that they have a hindrance where there aren’t a vast number of people to rely on, where several of the issues are present, but not experienced enough employees who have dealt with such issues before.
The best thing that banks can do is to communicate with all the teams, so that when new tech teams have the technology to enforce, they can work with not just any back office team but with the front office and middle office teams, because you’ll be able to find a lot of information over there. Then they can put it to product testers and the end users and offer rewards to customers and testers who can find breaks in the systems, because at the end of the day, reputation is all that matters and errors in your system can cause your customers to move away.
Ashish Cherian: Securing a bank’s IT systems against hacking has also been something that banks have focussed on. They have always prioritised it over the past few years. Yet there are occurrences of cyber crime globally. There was the case where 100 million was nearly lost across Eastern Europe when it came to card processing. In Taiwan, two years back, there was a theft of 60 million at a top bank. Similarly there was similar valued cyber thefts in Nepal, Russia and the United States. Hence till now CX has been put on the back burner. However lately customer priorities have been changing and it has been found through a survey that 80% of banks and other organisations will be competing solely based on CX. Do you think there is a symbiosis between security and CX and how do you think banks can enhance both of these vital parameters at the same time?
Sharon Kimathi: Yes, I think that CX and Security have to have a symbiosis between each other. I think it comes in 2 parts. The first part is working with the ethical hacker. These hackers need to work with you. You need to actively hack the system and find out the loopholes. That will go to the tech team, who will work on erasing those loopholes away. Another important part is to understand where to store the data, as there are many banks that are keeping the data, but don’t know how to use the data or how to clean it properly. Banks need to work with the hacker and the data expert on how to use, store and clean the data and how they can prevent the outside world from accessing the data. This will ensure better CX and at the same time, ensure breaches don’t take place like what we have seen off late.
Ashish Cherian: What do you foresee for the banking landscape in the next 2 years with traditional banks, challenger banks, non-financial organisations (Google, Amazon) being vibrant across the payments domain? Where do you think this three way tussle will land up?
Sharon Kimathi: I think there’ll be a lot of partnerships. They will want to look at partnering with existing banks or tech giants or fintechs to provide better user experiences and to ensure there aren’t any security breaches.
Ashish Cherian: What do you think would be the biggest technology trend until the end of this decade? AI, ML, RPA, being digitally focussed or something else?
Sharon Kimathi: I think it would be an amalgamation of all these things. Overall, it would be something concerning the principle of digital ethics and privacy.
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