This is how banking innovation in Asia has evolvedBY DENNIS PHUA
To stay relevant, banks in Asia are keeping in touch with technological advancements and innovating on their product and service offerings.
With limited resources, banks have to maintain a disciplined strategy of investing in new technologies that will make a difference to their performance. Crucially, innovation should accelerate and sustain growth, reduce costs, create new revenue sources, and deepen customer relationships.
Banks must be able to seize market opportunities, and this requires a high level of integration on the core banking system, enterprise data warehouse, and backend infrastructure. They are then positioned to exploit trends with a critical mass of scalability and stability across a network of locations throughout Asia.
Asian banks are beginning to think global and act local. While they aim to maintain best practices and service levels across their regional presence, they also allow for local or sub-regional solutions to be deployed in order to meet the needs of local regulators and markets. Above all though, there is a need to develop a set of repeatable processes, and banks here still strive for consistency and standardisation.
While working on a more physically consolidated environment for their entire Asian presence, banks have come to discover the multiple silos which can exist in their banking systems.
To reconcile and manage this information, the notions of big data providing detailed customer insights to facilitate customised engagement with clients have been picking up in the industry. Being able to leverage this data would help establish higher profits and customer sustainability.
Also for Basel III compliance, liquidity management has become a vital part of a comprehensive systemic process, and data quality has grown in priority for banks in Asia. Banks are keen to maximise the returns on their assets as well, and the automation of reconciliation systems would help them to enhance their control over their operations in Asia and worldwide.
Some banks are experimenting with cloud computing to enable their service and operations platforms and to bring products more efficiently to the market. Implementing internal cloud computing concepts has been a staple for banks in Asia, and some are in the final phases of virtualisation. There is hope that banks would begin to explore the external cloud environment and adopt solutions that will improve their networking and consumer engagement capabilities.
Increasingly, banks are placing customers at the heart of their integrated channel strategies. The rapid growth of connectivity and social media is reshaping the landscape, and there is immense competition among banks to meet the needs of new and dynamic consumer expectations.
Many are improving their processes and technology flows and aim to extend seamless customer experiences across multiple channels and markets. They are adapting banking to fit into the lifestyles of consumers – lifestyles that are typically fast paced, mobile, and demand instant fulfilment.
From Automated Teller Machines to internet banking, this has created the need for impeccable and consistent service delivery across multiple touch-points. Importantly, mobile financial applications are playing a pivotal role in delivering data, supporting decisions, and accelerating transactions.
Mobile banking has come into the spotlight over the past few years and will continue to do so. Banks in Asia are making sure that they would be agile enough to align with new technologies associated with mobile payment, and meanwhile, they are focused on defining simple and effortless transactions on their own touch-points.
Banks are also innovating on their customer advisory methods by facilitating structured applications for use by their relationship managers and sales agents. These tools are often developed in-house and proffer visualisation and simulation capabilities during client conversations in order for bank employees to make investment recommendations on the discussion table.
How banks can develop a strategic mindset towards innovation adoption is to first set their principles for innovation. Guidelines on technology roadmaps and metrics to measure the fulfilment of corporate objectives should also be in place.
From there, they should explore the market by forming innovation partnerships, from vendors to universities to venture capital firms. As they understand emerging technologies, their leaders can initiate their participation in technology consortiums to experiment with new innovations.
Internal technology groups should also take responsibility to expand successful pilot projects across the organisation. They must check regularly with stakeholders on their views on the products and service levels, and inform the product and marketing departments on early correction as and when required.
Notably, Citi has recently built an Innovation Lab comprising of a Client Experience Center and a Client Collaboration Center. In the facility, innovative solutions are demonstrated and clients can test them with on-site product experts. Accenture has also opened an Innovation Center for Financial Services in Beijing to showcase their own innovations.
Such facilities are prominent examples of how global banks have connected with industry executives and potential clients while sharing their expertise and innovation capacities. Decision makers are also more likely to expose themselves to upcoming innovations early and make purchasing commitments with these banks.
A final avenue where banks have been in touch with innovation is through start-up companies. Banks can do well to partner with start-ups which may help strengthen customer relationships and assist in building competitive advantages. Conferences like Finovate Asia present opportunities for the banking sector to meet up-and-coming banking and financial technology start-ups.