Commentary

For over 12 years, I have been associated with the development of Internet banking applications. In this article, I would like to share my views on the user experience aspect of Internet Banking applications and its future.

The Banking Sector of 2020 will look vastly different from what it is today – and network service providers have a critical role to play in enabling banks to make the transition to the future. The International Monetary Fund estimates that global banks lost more than $1 trillion on toxic investments following the Great Financial Crisis of 2008 and the on-going Euro Debt crisis. Banks suffered significant reputational harm following the global financial crisis. According to the Edelman Trust Barometer, the Financial Services and Banking industry remains the least trusted in the world. In order to tackle this challenge, the banking sector is becoming more agile, customer focused and tech-savvy. Consequently, network service providers need to scale-up the services they offer to enable banks to connect with their customers where they are and how they want to be engaged with. Making customers a priority The crisis has prompted progressive banks to take a ‘back to basics’ approach by focusing on longer term goals, such as offering customers value for money, satisfaction, and access to their bank and cash 24/7. This ‘return to the roots’ approach will require a significant change in internal behaviours. Rather than rewarding customer-facing staff for sales, the successful banks of the future will develop incentive programmes that reward staff for customer satisfaction, for the fair treatment of customers, and for the fair resolution of complaints. Relationship managers now have new tools and platforms that provide consumers with full information on the products and services relevant to their needs and portfolio. Banks will also need to ramp up on ‘comparison sites’ for customers to evaluate the services offered conveniently, fairly and transparently. A sophisticated customer relationship management process requires intelligent software, enhanced collaboration and communication within bank employees as well as higher compliance standards. Network service providers have to transform the nature of services they offer – from pure connectivity to value added services that enable banks to make this transformation. Go online – and social, and mobile Over the past decade, banks have done a stellar job in delivering the convenience of internet banking to consumers globally. To stay relevant, banks will are now required to step further into cyberspace and fully engage with their consumers over social media and mobile platforms to regain their trust and build lasting customer loyalty. The widespread popularity and importance of social media is mirrored by the rise of mobile smartphones. A PayPal survey found that the value of mobile e-commerce transactions in Singapore jumped more than seven times in 2011 compared to the previous year. Mobile banking is expected to become a key battleground in the retail banking sector. As technology matures, banks will be expected to offer even more banking services on-the-go to increasingly tech-savvy customers. Security is the most important consideration as virtual platforms rapidly replace traditional branch banking behaviours. Assuring the sanctity of every transaction and ensuring that customers are not compromised while using any of the multi-media portals is a key requirement from technology and network service providers serving banks today. However, this is a journey that has to be made – both for the provider and the bank. Banks that successfully integrate their social and mobile platforms to their online and traditional channels will have a greater chance of staying a step ahead of their competition. What about Cloud? While most banks are actively exploring the possibilities that Cloud Computing offers by way of agility and cost-efficiency, they are also treading with caution as they wait for further clarity on cloud computing regulations. The regulatory environment varies widely across geographies. As such, there are no easy answers for financial institutions which will need to leverage their group investments for a cost effective solution that will manage geographical risks as well as comply with the highest standards stemming from among the varied regulations. For some, this may mean implementing cloud solutions that are regionally-based and pegged to the highest regulatory standards required in a specific region. One of the more promising starting points for banks wanting to adopt cloud service is perhaps the “hybrid” cloud model (a cloud computing environment that comprises on-premise private and off-premise private or public cloud implementation). A hybrid cloud offering brings together the flexibility and increased efficiency offered by managed hosting, multi-tenant and private cloud deployments, whilst still protecting certain extremely sensitive data. It enables financial institutions to keep sensitive data confidential while benefitting from reduced cost and complexity. Network service provider partners are being challenged to offer their Banking and Financial Services customers a solution that ensures the integrity of the trusted legacy systems while exploring cloud-based services for less sensitive and newer business areas. They will also need a deep understanding of the regulatory environment and be able to help their banking customers navigate it when developing a cloud strategy. Pursing long term goals The successful bank of 2020 will be driven by longer-term goals, including a relentless focus on giving customers better value and service for money. To boost efficiency and to drive down operational costs, banks are going to have to adopt a much more agile and responsive IT and communications platform. Banks will need technology-agnostic partners that can help them navigate a path to finding an optimal communications and IT model that works for their businesses. Heading towards 2020, the challenge for network service providers is to invest into value-added communications solutions, which are highly secure and compliant while offering their banking customers a fast, responsive and trusted platform to serve their end-consumers effectively.  

Hong Kong and Singapore are popular places to build careers. When my company surveyed financial professionals there, about 80 per cent recommended their cities as places to live. Plenty of people from outside Asia want to break into these markets, too. Recruitment agencies, employers and job boards like mine all report a continued flow of CVs from the West into Asia.

Given the massive funding requirement of infra sector (>$500b in the next decade by some estimates), the domestic banking sector is feeling the constraints in meeting these large debt requirements:

87 percent of the world population is already powered with a mobile phone with 25% users already browsing on the internet on their mobiles. KPMG surveys indicate that the Asian region has already shown a growth of 3x for mobile usage on retail.

A number of countries in Africa, Asia, the Middle East and Latin America have ‘come in from the cold’ in recent years as a result of a pent-up desire for political and societal renewal. A major issue for the new rulers running countries that are now much more open to the outside world is to consider how best to adapt banks and financial firms to systemic political change.

Implementing a core banking system leads to a large and complex project, which involve high risk and multiple stakeholders - a classic case for hiring a Systems Integrator to handle the complexity. (Flyvberg and Al, 2003; Altshuler and Luberoff, 2003; Miller and Lessard, 2000; Morris and Hough, 1987).

How can banks optimise regulatory compliance and everchanging rules? Instead of an ad-hoc and piecemeal approach, regulatory compliance challenges can be addressed by an "optimised" parallel approach, which takes advantage of common business and processing traits across multiple regulations.

Capital Markets are primarily driven by the exchange of Capital (in the form of cash or security) by those in need of Capital and by those offering it. The investment attracted by any Capital Market is influenced by many factors.

High Availability is a Business Decision Before automated teller machines, customers looking to access banking services had no choice but to wait in line at a bank, during its opening hours. Today, online and mobile banking platforms have provided customers with instant access to the majority of banking services, creating a new reality for banks.

Online Banking offers users the convenience of managing one's finances anytime, anywhere. However, any online transaction can be vulnerable to security threats.

High or rapidly increasing leverage, together with mounting exposure to China, will constrain upward rating momentum for banks in Asia-Pacific (APAC). It could even lead to downgrades should China's economy slow more sharply than expected and weaknesses in its banking system become more widespread.

The New Bank on the Block: Lafferty spoke with Anthony Thomson, Metro Bank

The employment markets in Hong Kong and Singapore financial services are less buoyant than they were 18 months ago; banks have been making redundancies, and recruitment remains comparatively low. Despite this, financial professionals show few signs of wanting to leave these cities. But while they still like living there, they are now considering local opportunities in other industries.

In its 2012 Predictions: Competing for 2020 report, IDC states that 40 percent of banks will ramp up to launch big data and analytics. This is expected as the financial services industry has always been ahead of the technology curve; and nothing defines the landscape more than big data and analytics today.

The recent allegations1 and eventual settlement2 against Standard Chartered regarding lapses in their anti-money laundering (AML) controls has made headlines in recent days, with significant impact on their share price and damage to their reputation, apart from the fine of US$340M. What is interesting to note is the finger pointing that is arising out of this incident.