BANKING TECHNOLOGY | Tim Charlton, Singapore
Andrew Yeong

Financial services sector transformation gathers pace with COVID-19


Without a doubt, COVID-19 is rapidly changing the way business is done and this is visible across industries. For players in the financial services sector, in particular, customer interactions are swiftly switching from physical to digital.

With 5G being rolled out in many global markets, remote working being the new norm and video-on-demand taking root everywhere, it is not alarming to know that four out of every five consumer transactions have moved to the digital eco-system post-COVID, according to IDC.

To survive and thrive in this altered landscape, financial institutions must speed up their digital transformation, and embrace disruptive technologies like 5G and AI to meet new business needs and evolving customer expectations.

A mobile-first strategy paramount
The emergence of transformative new technologies has created digital disruption across both retail and commercial lines in the banking industry. Today, creating a great customer experience is fundamental to a bank’s revenue and market share. Unlike a decade ago, where customer experience management was retail or franchise driven, the focus now is on the user interface, developing APIs, and enabling highly secure transactions.

COVID-19 has made some of these considerations more tangible and dynamic. Rising competition is forcing financial services organisations to fast track their digital transformation and pivot their organisations to embrace new ways of working through technology. An IDC report predicted that by 2022, three out of four tier 1 Asia Pacific banks will deploy intelligent automation solutions at scale to enhance intelligent decision making and improved operational efficiencies.

For example, now it might be enough to have a chatbot or a call centre with remote agents, engaging with banking customers. Soon, this will not suffice. Banks will want more analytics and technology that let them know their customers better. Banking clients will also demand ultra-rich media such as having a video chat with a live person, and demonstrably more robust cybersecurity.

Harness 5G
5G is also set to change the paradigms of transmit, compute, analyse and store. According to GSMA, mobile operators in Asia Pacific will invest over US$331 billion between 2020 and 2025.

Deployed effectively, 5G can result in major customer experience enhancements, unleashing a new wave of productivity. Underbanked areas can be tapped thanks to the proliferation of 5G and the use of seamless augmented reality/virtual reality leading to better financial inclusion.

The banking industry will gain tremendously as both speed and lower latency enable immense improvements in the end-user experience of financial transactions. All cogs in the wheel will move towards delivering improved levels of customer experience – from connecting inventory to information to financial flows.

For instance, call centres will deploy immersive video in a bid to gain competitive advantage in the marketplace. This requires unfettered access and secure bandwidth for communications anywhere in the world. Managing a secure and connected digital workplace for remote employees remains an important consideration going forward.

The growth of 5G also means that there will be higher demand for bandwidth, greater internet access, larger data flows and tougher SLA demands from prosumers. Enterprise IT infrastructure such as core networks, app servers, data centres and cloud will need to be aligned to handle the demand for higher performance from 5G endpoints.

Take to the Clouds
The benefits of running operations from the cloud is by now well-established. Many financial institutions, however, have legacy apps that cannot easily be shifted over to the cloud.

Financial services firms need to figure which apps are important to move to the cloud and run an audit to assess if these can indeed be moved.

In parallel, the infrastructure needed to enable the transition has to be evaluated with a focus on the total cost of ownership. In their haste to migrate to the cloud, many enterprises shift apps without taking into account infrastructure requirements necessary for an upgrade.

Cloud migration needs planning and an organised approach, starting with a study and an audit of the applications estate, followed by a phased migration approach based on cost-benefit analysis.

It is also crucial to prioritise which apps need to be moved to which cloud and consider modifying or upgrading the associated network and security infrastructure. All these should be done sequentially in a controlled manner.

Lastly, in carrying out all the above recommendations, don’t forget something that is very innate to the business of banking − security.

In the new era, financial services players need to view security more broadly as a complete solution that is rooted in their business strategy. Security is not just about blocking attacks but also leveraging technologies such as AI for predictive analysis of high-risk threats. Only then can financial institutions navigate and get ahead of the increasingly sophisticated threat and business landscape.

In summary, enterprises need a robust business strategy that covers three fundamental aspects: secure, connected, and digital and brings this all together to offer the best employee, customer and partner experience.

It’s a given that digital technologies are here to stay. We expect not only financial sector companies but organisations across sectors to assess their legacy tools and services and re-formulate their collaboration and business continuity strategies for the long term.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.

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Andrew Yeong

Andrew Yeong

Andrew Yeong is Vice President and Head of Sales for the APAC region at Tata Communications. In his role, Andrew Yeong is responsible for the growth of Tata Communications’ business across all industry verticals, focusing on providing digital transformation services to corporations in the region. He also supports the company’s strategic efforts in growing and maintaining its leadership position in the network infrastructure market, as well as in building deeper penetration with its mobility, IOT, cloud enablement and cyber security solutions.

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