By Cristian Barbu
This unannounced, un-reckoned crisis installed all over the world since the beginning of the year brought some unexpected opportunities in the area of digital development.
The banking sector, already pressured by the digital transformation trends nowadays with the new generations, have found themselves in a new pressuring situation – the pressure of ‘now’.
In my opinion, banks will and have to continue investing in improving their digital channels, especially by adding new revenue-generating features. Whereas, traditionally, the Internet&mobile banking apps were designed to offer existing clients the possibility to operate with existing products (like payments, account statements, etc.), for over a year now we see the trend for banks to use such digital channels for selling new products (accounts, cards, loans, etc.). I expect this trend to continue and even to accelerate, driven by the boost the current crisis gave to the digitalization of the business environment in general and public institutions in particular. And I am referring here to the acceptance and adoption of digital qualified signature, the financial administration digitalization and other such measurements.
The first reactions I (and we all, for that matter) have noticed with regards to this matter were the investments for an infrastructure that allows remote working at a large scale. On the other hand, however, I haven’t noticed, by this time, an acceleration of digital projects. One possible explanation could be the re-assessment of banks’ priorities in the new context, a process that demands time for such complex organizations. Nonetheless, I am confident that such acceleration will come, supported by emerging technologies and trends such as AI, APIs, chatbots, blockchain or cloud banking. A key role in this evolution I think will be played by the so-called API Economy. Just like some decades ago, when the companies have understood that vertical development is flawed and industrial giants transformed themselves into ecosystems of smaller, specialized entities, the same will happen with the big tech-consuming companies when they realize that integration is the key to development.
Another enabler for business growth for banks is the Omnichannel strategy which aims to offer clients a unified experience, irrespective of the channel through which they access their services. This allows banks to be always close to their customers in their terms. Nonetheless, the omnichannel solutions are merely a facilitator for a better client-bank interaction, exposing the real challenge: the bank’s profound digital transformation! Only an exceptional system integration, together with a high degree of process automation can elevate the quality of customers’ experience throughout any channel. The major benefit of an omnichannel approach is a highly personalized client-bank interaction. But this perimeter transformation requires a deeper digital transformation that eliminates the risk of disappointing or frustrating the client, the final beneficiary. In my opinion, this digital transformation is more of a vision or a strategy, rather than a project, and, in the context of the current digital society, it can be only regarded as a continuous process. The crossline is continuously pushed ahead by the new digitalization opportunities in terms of technological developments, business challenges, work-force transformations, and even legislative regulations. Any project that pushes the organization a step forward – even if we are talking about new functionality in the mobile banking app or the automation of an internal process, can be considered a digital transformation project. And for controlling the digital transformation overall path in terms of priorities, deadlines, budget, etc. I would recommend the adoption of an Agile-methodology based delivery, doubled by an agile cultural organization.
We are witnessing now a strong trend regarding Cloud banking as well, but in a sector so tightly regulated as the banking sector in Romania, it’s hard to anticipate when and if the infrastructure of a bank will be moved in the Cloud. I am sure, however, that the future is at least hybrid, and the banks will soon have to place themselves between the two extremes – on-prem/on-cloud – depending on a range of organizational considerations rather than technological ones. In Romania, we witness for some time now the appetite of some of the banks for cloud solutions, without an actual migration of an important operational system yet, but I’m convinced we will soon see that happening in our country as well, based on the trends I’ve noticed with our clients from the UK or other EU countries.
The Romanian banking scene is due to change after this Pandemic, starting with the small fast-track digital projects initiated in the past six months, but set to continue with strategic transformational projects at the horizon. The key enablers in the process of building customers’ trust and engagement are Omnichannel and Cloud. The crisis merely accelerated an existing need and we are all, I’m sure, looking forward to the banks’ next move. Will banks leap and accelerate digital transformation, or will they (comfortably) continue the road at their own pace?