Connect with us

Finance

HOW TECHNOLOGY IS DISRUPTING THE FINANCIAL INDUSTRY

If organisations hope to adapt and thrive in the face of the tsunami of technology now encroaching, they will have to be more flexible and daring in their approach. Over the past decade, certain players in the finance industry have invested, introduced and integrated more sophisticated tech into their operations in order to gain competitive advantage. Digital innovation in the banking sector has added a new dimension to that challenge, and financial institutions need to adhere to a new set of rules if they want to do more than survive.

 

Contactless technology, mobile payment systems, banking and online chatbots have heightened consumer needs and expectations. Customers now expect efficient and seamless banking experiences that fit neatly around their lives. They want everything in a heartbeat. ‘Generation Immediate’ has little or no time for call centres, branch visits or online banking system errors. And the generation to follow will be even less forgiving.

 

It is crucial, then, to stay ahead of the demand. This ambition is the driving force behind MONETA Money Bank’s digital transformation journey. MONETA provides retail and commercial banking, as well as other financial services, in the Czech Republic. The bank services one million clients, runs more than 200 branches and operates over 650 ATMs. In 2017, MONETA embarked on a four-year digital transformation strategy to build market-leading digital capabilities, increase market share and satisfy the increasing demand for online services, with the goal to sell at least 40% of its major products online by 2020.

 

A transformation of this size and scope is no easy feat, especially for a bank with large, complex and disjointed legacy systems accrued from its two-decade history. A particularly high hurdle for MONETA’s transformation strategy was the age of its integration system. The MONETA team found that they were being held back by an outdated 15-year-old platform, which meant the bank was unable to support industry standards such as Open APIs. Changing the platform became a fundamental part of MONETA’s strategy and it needed to find an experienced middleware partner that could support the bank in its migration of an old system that supported around 40 million calls per day. To that end, MONETA partnered with Mitra Innovation, a global technology company that specialises in digital transformation, cloud enablement and software development, to implement a new banking Integration Platform (IP).

 

Banks need a solid, agile architecture in place if they are to embrace automation or digitally develop at a meaningful pace. It is important, however, to remember that changing a system has a knock-on effect on processes and people (processes undertaken by people have to adapt according to the needs of the system in question). Organisations therefore need to ensure there is operational and role clarity before a transformation begins. Without a sustained effort to engage employees in the change process, it doesn’t matter how good a new system is – it will fail if people do not know how to use it or make the most of it.

 

This was a key challenge for MONETA because asking employees to adopt a new approach to working could be met with resistance if the leadership team neglected to communicate the benefits. Not only would a move to agile allow the bank to better manage API life-cycle, throttling and security, but it would also help pave the way for the bank to work towards its 2020 target of becoming a digital leader.

 

Change management requires confidence. It also involves an in-depth level of engagement with those affected. Employees responsible for the new system need to have the relevant skills as well as an entrepreneurial spirit and a ‘can do’ attitude. In other words, the workforce’s mindset needs to be as agile as the new digital infrastructure.

 

In order to influence company culture and behaviour so that it aligns with the digital transformation, MONETA invests heavily in its development strategy to ensure that its people can help execute and deliver the best possible service to the end customer, while ensuring those same people are empowered and buy into the transformational journey. MONETA works with external coaches and partners to design and deliver agile workshops to help everyone prepare for the changes ahead and to support people throughout the lifecycle of the transformation. These workshops are also crucial in communicating everyone’s role in pushing the company forward.

 

Mitra has helped MONETA during its digital transformation by building a platform that can deliver the services it needs to make it more competitive in the Czech Republic market of modern banking and support its agile development. MONETA can now focus on building market-leading digital capabilities and satisfying the increasing demand for modern services. For example, in order to deliver and exceed the expectations of Generation Immediate, the company has developed an award-winning mobile banking application Smart Banka and is significantly revamping its online banking solutions. This has only been possible by adopting an up-to-date integration platform and by working on the culture piece that goes with it.

 

MONETA’s intent to remain competitive, to comply with the latest Open API regulations, and to connect with the younger population has acted as a tricolour catalyst for the digital transformation programme that, thanks to a scalable architecture, promises to support its rapid growth into a leading challenger bank.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Finance

‘MOVE FAST BUT DON’T BREAK THINGS’ – WHY FINTECHS WILL COME TO LOVE REGULATION

move fast

Alex Johnson, Director of Portfolio Marketing, FICO

 

The guiding ethos of fintech is move fast and break things. It’s the fundamental advantage that disruptors have over the incumbents they’re disrupting — the ability to move quickly and make mistakes, learn from them and deliver innovative services to customers. Generally, this ethos is presented as a virtue. Banking is ‘broken’ so any investments in improving it are both notable and noble – even if there are bumps along the way.

Conversely, anything that stands in the way of this ‘march of progress’ is generally cast as a villain.

The most prominent villain for fintech companies is regulation. From their perspective, it’s a competitive moat, based on rules written for a different century, that protects banks’ ability to make money without needing to innovate and offer more or improved services to their customers.

So, it’s easy to see why a fintech company — believing fully in the virtue of its mission and faced with a litany of illogical and intractable regulations — might just say ‘we’re doing it anyway.’ That’s what Robinhood co-founder Baiju Bhatt reportedly did when his company tried to roll out a checking and savings product that it claimed was insured without confirming that with regulators first.

The problem is that while we may mythologise the ‘move fast and break things’ ethos in the abstract, consumers don’t love it when their stuff breaks in the real world.

And when fintechs and challenger banks aren’t constrained by regulation (as they mostly are in the U.S and Europe) the harm caused by this ‘move fast and break things’ approach can be much more severe than a service outage or a false claim of deposit insurance.

 

Stories from overseas

In China, online P2P lending exploded in popularity, with the number of P2P lenders growing from 50 in 2011 to 3,500 in 2015. Then the whole industry imploded when it was revealed that 40% of P2P lending platforms were Ponzi schemes.

In India, online lending companies raised a record $909 million in venture capital last year (the third-biggest market behind the U.S. and China). And those lenders are now using personal data from borrowers’ mobile phones to make lending decisions – which although illegal, is reportedly ignored by Indian regulators.

In the Philippines (another emerging market where venture capital dollars for online lending are pouring in), the National Privacy Commission is investigating hundreds of complaints from consumers about lending apps leveraging their personal data to shame them into making their payments.

 

A prediction for the decade to come

In the 2020s, I believe fintech companies will come to love – or at least quietly appreciate – regulation for two primary reasons:

 

Brand protection

Fintechs and challenger banks understand that brand recognition and affinity is key to their long-term success. Building their brands will be a challenge. A recent survey of 2,000 Brits found 40% don’t trust challenger banks at all and 67% said they are more likely to do business with banks that have branches on the high street. As Zach Bruhnke, co-founder and CEO of U.S. challenger bank HMBradley recently said, ‘We’re going to have to grow by word-of-mouth and doing the right things for our customers.’

Fintechs and challenger banks focused on the long-term task of building brand affinity and trust will, over the next decade, come to despise bad actors that skirt the rules and dress up get-rich-quick schemes in the same language they use to describe their own firms. Regulations that constrain and/or shut down these bad actors will be increasingly appreciated by legitimate market participants.

 

Disruption-friendly regulations 

In the 2010s, we saw the beginning of a trend that will strengthen in the 2020s — regulations designed to foster competition between incumbents and new market entrants. To date, such regulatory action has run the gamut, from vague (innovation sandboxes and special-use charters) to hyper-specific (U.S. regulators’ cautiously approving the use of alternative data, or the Bank of England considering giving non-banks access to its 500-billion-pound balance sheet). Perhaps, most promising, has been the work done by the Competition and Markets Authority (CMA), which has been proactively driving the adoption of rules and standards around Open Banking for past couple of years. O

ver the next decade, through careful management of public perception and increased investment in lobbying, fintechs and challenger banks will further reshape the regulatory environment from a competitive moat to a more level playing field.

 

Reaching fintech maturity

’As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously. We plan to work closely with regulators as we prepare to launch our cash management program’.

This was the statement issued by the chastened co-founders of Robinhood shortly after they backed away from their plan to launch a checking and savings product without government insurance. And here’s the crazy part — that’s exactly what happened! Less than a year later the company announced a new deposit product, this time insured by the Federal Deposit Insurance Corporation (FDIC).

As fintech companies mature in the 2020s and the focus of their strategic objectives shifts from growth to profitability, regulation will play a vital role in transforming the ethos of those companies into something a bit more sustainable. Call it ‘Move fast, but don’t break things’.

 

Continue Reading

Finance

HOW TO MERGE YOUR FINANCES AS A COUPLE?

Finances

By Nelisiwe Ndlovu, Certified Financial Planner at Alexander Forbes

 

There is never a good time to discuss finances with your partner, married or unmarried, and one key issue that needs to be discussed is whether you should merge your finances.

Joining all your money matters can seem overwhelming at first, so you don’t have to combine every bank account and credit card from the get-go.

 

Start by having an honest discussion with regards to your individual money management and financial commitments before deciding to merge or co-manage your household finances while deciding if you want to fully merge all your finances. Detail all individual income, expenses, and all your financial commitments. The best way to achieve this would be to first take your individual budgets and combine them. This will tell you what you can and cannot afford as a couple. If one partner does not usually budget, this is a chance to start doing so as this will ensure that your household finances are under control.

 

Nelisiwe Ndlovu

Before you think about merging your finances, be open and honest about:

  • How much you earn – what is the income that you will bring home? What is the frequency of your income? Are you permanently employed or a contractor?
  • What are your current individual expenses and financial commitments? List your assets and your current debt.
  • Your individual financial goals and money management techniques – don’t worry if you might have not figured this out at the time of merging your finances – the important thing to do is to be open and honest so that you both build a stronger money foundation
  • Disclose your financial obligations, this becomes very tricky if left until too late and may cause unnecessary tension in the relationship
  • What are your goals as a couple – what is the purpose for merging your finances?

Married couples can formally or informally merge their finances as detailed above where household expenses are split between the couple (the split could be 50/50 or any fair split agreed upon by the couple, which could be based percentage-wise depending on one’s income). Some couples tackle finances by adopting the ‘pick a bill’ approach, where one couple pays the water and electricity while the other covers the food.

Being married does not mean necessarily that you need to have one joint account. You may also just want to open one joint account where you each deposit money to pay just your monthly household expenses.

 

The top five things to remember when merging finances as a couple:

 

  • Have the ability to manage your own finances before expecting another person to merge their finances with you.
  • Be mindful of your potential spouse/life partner’s money management behaviour and skills so that there are certain things you can address together before considering merging your finances
  • Always keep an open line of communication – honesty is the best policy
  • Set a money limit which you can each spend without having to consult each other
  • Don’t forget to change your wills and beneficiaries on pension or provident funds as required.

Continue Reading

Magazine

Partner Events

Trending

DIGITAL TRANSFORMATION DIGITAL TRANSFORMATION
Banking15 hours ago

WHY DIGITAL TRANSFORMATION IS CRUCIAL FOR BANKS

David Murphy, Managing Partner, Financial Services EMEA & APAC at digital consultancy Publicis Sapient   Over the past five years,...

DIGITAL DIGITAL
Top Stories1 day ago

REACHING THE NOT-SO DIGITAL NATIVES

By Garry Hamilton, Group Business Development Director, Equator   It’s 2020. There’s no denying that banks and financial institutions have...

Bank Bank
Banking1 day ago

THE ‘LEGO-IFICATION’ OF BANKING IT AND THE RISE OF DIGITAL FINANCE ECOSYSTEMS: FOUR PRIORITIES FOR BANKS IN 2020

Danny Healy, financial technology evangelist, MuleSoft   The advent of the open banking era and continued emergence of fintech has...

Insurance Insurance
Wealth Management1 day ago

WHAT TO DO WITH YOUR LIFE SAVINGS, RETIREMENT AND INSURANCE POLICIES WHEN EMIGRATING

By Renier Hugo, Alexander Forbes Certified Financial Planner   With South Africans increasingly opting to live abroad, a hot topic...

Mobey Forum Mobey Forum
News1 day ago

MOBEY FORUM: BANKS’ BIG OPPORTUNITY IN DIGITAL ID WON’T LAST FOREVER

New report offers strategic insights for banks following in-depth review of seven prominent digital ID schemes across Europe and North...

Tax Tax
Wealth Management4 days ago

THE END OF YEAR TAX CHECKS THAT COULD SAVE YOU THOUSANDS

Charlie Reading, Founder and MD of Efficient Portfolio After HMRC’s tax return deadline at the end of January, it can be...

AI AI
Top Stories4 days ago

RISK VS REWARD: IS AI TAKING OVER?

Xavier Fernandes, Analytics Director at Metapraxis A study by Oxford University academics into “The Future of Employment” in 2013 prompted...

BUSINESS PLANNING BUSINESS PLANNING
News4 days ago

HALO TRUST USES ADAPTIVE INSIGHTS FOR STRATEGIC BUSINESS PLANNING

Cloud-based financial planning helps HALO Trust deliver greater benefit to communities affected by war   Adaptive Insights, a Workday company,...

News4 days ago

IS DATA PROTECTION AND PRIVACY RELEVANT ACROSS ALL STRATA IN INDIAN SOCIETY?

A Study by Pensaar Design With CGAP Pensaar Design has been working on a research study with CGAP to better...

banks banks
Banking6 days ago

THE RISE OF CHALLENGER BANKS AND HOW LEGACY BANKS ARE TRYING TO KEEP UP

Jean Van Vuuren, Regional VP for UK, Middle East and South Africa at Alfresco   The finance world has been...

ORGANISATIONS ORGANISATIONS
News6 days ago

NEW STUDY: AI HELPS ORGANISATIONS GROW PROFITS 80 PERCENT FASTER

Global research highlights how organisations are capitalising on emerging technologies to enhance finance and operations for competitive advantage   Organisations...

INVESTMENT INVESTMENT
News6 days ago

UK START-UPS MUST MAKE THE MOST OF A SMALL WINDOW TO CAPITALISE ON INVESTMENT OPPORTUNITIES, FOX WILLIAMS WARNS

Despite rising investment, Brexit and growing interest from tech giants could cut off start-ups’ opportunities in 2020   While a...

Open work Open work
News6 days ago

XPEDITION UPGRADES MORE THAN ONE MILLION OPENWORK CLIENTS TO THE DIGITAL AGE

Xpedition, leader in the implementation of cloud-based business applications, has deployed a new system which has digitally transformed the customer...

Microsoft Microsoft
News6 days ago

ORACLE AND MICROSOFT BRING ENTERPRISE CLOUD INTEROPERABILITY TO EUROPEAN CUSTOMERS

Today, Oracle is announcing the continued expansion of its cloud interoperability partnership with Microsoft with a new cloud interconnect location in Amsterdam....

technology technology
Business6 days ago

THE EMOTIONAL AND FINANCIAL COST OF WORKING WITH OUTDATED TECHNOLOGY

Slow Tech Could Waste 24 Hours of Worktime a Year In this digital age, businesses are hugely reliant on technology...

stock market stock market
Top Stories1 week ago

HOW TECHNOLOGY IS FUTUREPROOFING STOCK MARKET TRADING

Tony Shaw, Executive Director, London Office and Head Sales UK & Ireland at the Swiss Stock Exchange   Markets are shifting,...

TOP 10 COUNTRIES TOP 10 COUNTRIES
Wealth Management1 week ago

REVEALED: THE TOP 10 COUNTRIES THAT ARE REDUCING THEIR RELIANCE ON OIL

Ben Lobel, Copywriter at DailyFX New tool charts global commodity trading over the last decade The UK has reduced its...

move fast move fast
Finance1 week ago

‘MOVE FAST BUT DON’T BREAK THINGS’ – WHY FINTECHS WILL COME TO LOVE REGULATION

Alex Johnson, Director of Portfolio Marketing, FICO   The guiding ethos of fintech is move fast and break things. It’s...

Company Company
Business1 week ago

OFFSHORE COMPANY FORMATION TACTICS FOR SMEs

James Turner, Director at company formation specialists, Turner Little   Starting a business brings with it its own set of challenges,...

3DS 3DS
News1 week ago

EMV® 3DS – PAVING THE WAY FOR SEAMLESS AUTHENTICATION

Jean Fang, Product Manager, FIME   The growth of e-commerce, m-commerce and remote commerce transactions is showing no signs of...

Trending