Last year, digital adoption across the financial sector soared. Influenced by the global health crisis, technology deployment increased and implementation gained pace.
As a result of this shift, banks are now facing a number of new demands. Traditional models - typically reliant on face-to-face interactions for many transactions - are no longer enough, and transformational approaches that make customers’ lives easier are set to pave the way for the future of banking.
While only time will tell whether the actions taken by the financial sector during the COVID-19 pandemic were the best course of action, the priority now is growth. Only by building smarter business models – based on modern technologies – will banks be able to solve the problems the industry is facing and meet customer demands.
Building better for customers
Across every aspect of our lives we have become reliant on technology, transforming the way that we engage, interact and communicate. We have seen first-hand the impact that digitalisation efforts have had on the retail, hospitality and health sectors, but customers have yet to reap the same radical benefits across financial services.
This is because banks have long been reliant on legacy systems in order to serve customers. Transforming these restrictive systems to enable a more agile, customer-focused organisation is therefore a key strategic challenge. Regardless, banks need to be working better for their customers. The more banks can automate, the more they can make decisions in real-time, and the better systems they can build.
Not only will this ensure that financial services become more readily available, it means that the services that are widely accessible will have been developed with the customer front-of-mind. On-boarding experiences, for example, can be straightforward with minimal friction for customers, while still remaining compliant and low-risk for the banks themselves.
Where to start
Against a backdrop of economic uncertainty, low interest rates and rising competition, banks are unsurprisingly apprehensive about large-scale change and potentially exposing themselves to additional risk. COVID-19, Brexit and regulatory reform over the last decade or so – just to name a few – are all influencing factors adding to this concern and keeping banks on the side of caution.
However, while there will no doubt be challenges along the way, this shouldn’t be enough to deter banks from making the changes that should have been made years ago. Before, I’ve referred to the ‘museums of technology’ banks have relied on, but the impact of those restrictive systems is starker today than ever. While we couldn’t have anticipated the COVID-19 crisis, it has only highlighted the role of technology and the customer experience as a differentiator.
As an industry, we are facing a set of choices. We can continue relying on the waterfall model for software development, mainframes and on-premises servers for transactions, high in cost and low in agility. Or, as many new generation banking leaders starting to understand, we can make brave decisions to deliver fundamental change for the better.
At the heart of this transformation lies three key pillars: infrastructure, skills, and culture. If we, as an industry, can truly commit to improving each of these areas of banking, then there is an opportunity to create two or three decades of growth in an ambitious timeframe.
Doing our bit
Against the backdrop of technology adoption and ever-evolving challenges, our priorities at 10x have been two-fold: our people and our technology.
At the end of last year, we expanded our leadership team with two significant hires. In addition, nearly 200 new employees have joined 10x over the last several months, predominantly in technology roles focused on product and engineering.
The banks we are working with and talking to are increasingly focused on how they can design parts or all of their business to deliver fundamentally better experiences for their end customers.
Based on our pipeline of activity, it is clear the financial services industry, and retail banks in particular, are expanding their pursuit of new digital, cloud native technology solutions.
Our priority will be to continue to help them address their ongoing legacy cost and customer delivery challenges with the overarching goal of making banking 10 times better.
This year is a pivotal one for our business and team. During it, we will celebrate our fifth anniversary and simultaneously launch two banks using our proprietary cloud native platform, in two different geographies around the world - something that has never been done before.