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COVID-19 HAS FORCED MORE THAN THREE-QUARTERS OF BANKS TO CHANGE THEIR FUTURE BANKING STRATEGY

The banking industry faces a watershed moment, with banks re-evaluating strategies and accelerating plans to digitally transform

Marqeta, the global modern card issuing platform, today released a report that examines how banks intend to change their strategies in response to the COVID-19 pandemic. According to the findings, COVID-19 has had a significant impact on almost all (96%) European banks, with over three-quarters (78%) planning to change their future banking strategy to adapt to changes in consumer behaviour, such as the accelerated adoption of digital banking services and cashless payments.

The study of 200 banking executives found that, as a result of growing demand for digital services, 80% of banks have accelerated their plans to digitally transform. Banks also predicted that digital transformation projects will need to be delivered in two-thirds (69%) of the time, with 89% saying that the COVID-19 pandemic has drastically increased the speed of change in banking from years to months. The study also found that:

  • Three quarters (75%) of banks “weren’t prepared” for the scale of change that COVID-19 has triggered in consumer behaviour.
  • 88% of banks were overwhelmed by the demand for online and mobile banking during the COVID-19 pandemic.
  • Since the start of the global COVID-19 pandemic, banks say that digitally transforming to improve the online and mobile banking experience (76%), offering new, differentiated payments services (70%), investing in security and anti-fraud solutions (70%) and modernising core banking and payment platforms (66%) have all increased in priority.

“The future of banking has come around quicker than most expected. The onset of COVID-19 accelerated many trends in consumer behaviour, with more people moving away from cash and adopting digital services such as online and mobile banking,” comments Ian Johnson, Managing Director Europe at Marqeta. “These are all trends that were set to slowly change over time and banks would gradually transform to adapt. But COVID-19 has drastically moved up the timescales, with 36% of banks saying COVID-19 has “opened up the floodgates” to modernising core banking and payment systems. Attitudes to modernisation have clearly changed. Banks are now speeding up efforts to transform because they know that the winners of the next age of banking will be determined by who can best adjust their strategy to adapt to the new normal.”

 

Future banking strategies are changing

Over three quarters (76%) of banks say that the impact of COVID-19 has meant that the business models they used to follow have changed forever. As part of their future banking strategy, more than half (54%) of banks plan to reduce their physical branch network. Banks are also set to increase the number of digital services offered in branch (72%), the provision of specialist payment services (68%), their investment in digital banking and services (66%) and their digital innovation capabilities (61%).

As a result of the COVID-19 pandemic, 92% of banks say that innovation has become more important than ever. When it comes to innovation, banks say they need to:

  • Improve their use of data analytics to gain insights into customers that will allow them to make lending decisions in real-time (91%)
  • Improve their technology capabilities to better use contextual data to make judgements on fraud as transactions are being processed (91%)
  • Implement technology and processes that enable them to control what loans are spent on (90%)

 

Banks have to change quickly, or risk falling behind.

With COVID-19 driving a broad shift in consumer behaviors and adoption of new technology, all banks surveyed acknowledged plans to increase investment in tokenized card technology and modern card programs and said that the dangers of not being able to keep up were real. A significant portion (38%) said that without innovation in payments they would be unable to scale their existing services to offer new features and capabilities, while more than a third (34%) said they feared losing market share to competitors.

“COVID-19 has ushered in a new age of digital banking. Banks need to ensure they are prepared to adapt for this world, and many are set to double down on digital services and capabilities. But to do this, they need to overhaul legacy technologies that don’t provide the agility required to respond to the needs of the market. To adapt and thrive, traditional banks need to be supported with modern core banking and payment platforms that can support the requirement to digitally transform and provide the flexibility needed for their future banking strategies,” concludes Johnson.

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CORE BANKING PROVIDER OHPEN APPOINTS DOUWE-KLAAS BIJL AS CFO AND BOARD MEMBER

Ohpen, the first fintech platform to bring a bank to the cloud, today announces the appointment of Douwe-Klaas Bijl as its new CFO. Joining the Executive Board, Douwe will be responsible for Ohpen’s continued expansion from a financial, risk, legal and compliance perspective.

 

This latest appointment forms part of Ohpen’s wider growth strategy and vision. Last month, Ohpen acquired Davinci, Europe’s STP number one loan and mortgage software company, to challenge leading core banking software providers. As a result, Ohpen now holds assets under administration in the region of $100 billion. Douwe brings his 15+ years of international experience across finance, strategy and operational implementation in the financial services sector to continue the seamless and successful integration of Davinci.

 

Douwe spent over 10 years with McKinsey, some of which was working at McKinsey Australia and United Kingdom, both advising clients on corporate finance and strategy and supporting them through large scale transformation programmes. He was part of the team that set-up and scaled LeasePlan’s European used-car marketplace, responsible for finance, analytics and business intelligence.   Most recently, Douwe served as the CFO for Digital Insurance Group, focusing on fundraising and growth.

 

“Ohpen is at an incredibly exciting stage of growth and Douwe’s experience will be crucial to our continued expansion and momentum. He has a strong perspective on the benefits of integration and a careful eye for both commercial and efficiency opportunities. He will be a key asset as we continue working on our mission of setting financial institutions free from legacy software,” said Matthijs Aler, CEO of Ohpen.

 

On his appointment, Douwe said, “I feel privileged to join Ohpen at the brink of its next wave of growth and innovation. It is uniquely placed to challenge legacy technology providers in the financial services sector and its client proposition as the only cloud-native core banking engine to offer a full suite of products is not just compelling, but proven. I am thrilled to be playing a role changing the face of finance by joining the team.”

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ABBYY DIGITAL INTELLIGENCE SELECTED BY PARAGON CUSTOMER COMMUNICATIONS TO DRIVE DIGITAL TRANSFORMATION

ABBYY, a digital intelligence company, has announced a collaboration with Paragon Customer Communications – the leading provider of insightful customer communications solutions – that is expected to further accelerate the Paragon’s wider digital transformation offering.

 

The strategic partnership between the two companies will create enhanced efficiencies supporting Paragon’s delivery of frictionless customer communications for its clients.

 

By teaming up with ABBYY, and utilising the company’s content intelligence platform, 90% of Paragon’s inbound workload can now be processed by the innovative digital solution. ABBYY’s software handles the capture, extraction, and categorisation of inbound communications for enhanced efficiency and accuracy.

 

Integration of the ABBYY technology into Paragon’s inbound proprietary Integr8 technology platform means Paragon is able to reduce reliance on manually sorting and categorising millions of documents, supporting their clients’ digital objectives while reducing process risk.

 

Paragon’s inbound team currently processes over 35 million pages of inbound customer communications annually, across multiple document management facilities in the UK.

 

On a daily basis, Paragon’s nationwide sites process and digitise unstructured data such as complaint letters and ad-hoc notifications of change, as well as structured data like application forms, onboarding paperwork and account servicing documents.

 

These documents come via post, email, and remote location scanning, with in excess of 250,000 documents also arriving via fax machine each year – creating a growing challenge to process them quickly and efficiently to meet customer expectations.

 

Neil Murphy, VP at ABBYY, said: “We’re proud to be working with Paragon as they help banks, insurers, Government bodies and other critical businesses communicate better with customers when they need it most.

 

“All too often, manual processes and endless paperwork gets in the way of good quality customer communications. Automating this manual work with digital intelligence means staff can focus on business-critical tasks, leaving the paperwork to their ‘digital’ colleagues; digital intelligence holds immense value for businesses and the economy.”

 

Richard Machin, Director of Technology Services for Inbound Platforms at Paragon Customer Communications, said: “With the support of ABBYY and their digital intelligence solution, we will be able to grow our business at a time when good customer communications are more important than ever before.

 

“By using automation for the manual heavy-lifting, and using our people and their skills where they can have most impact, we can drive efficiency and value, which will ultimately help us onboard more clients. Thanks to ABBYY, our inbound business has the tools it needs to support growth, while still providing the best possible service to our clients.”

 

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