John Barber (VP & Head of Europe, Infosys Finacle)
While the banking industry is always changing, the past year has seen the emergence of a number of developments that will significantly shape it going forward into the future. The most notable recurring theme among most of these new changes is due in part to the effects of COIVID-19. The pandemic, which saw employees, customers and society overall become accustomed to doing their day-to-day activities online, has highlighted to banks the importance of developing their own digital infrastructure.
John Barber (VP & Head of Europe, Infosys Finacle) feels that the below topics will be essential for the banking industry if they wish to do so in 2023.
The metaverse
The rise of the experience economy and technological developments are two of the biggest contributors to the growth of the metaverse as we’ve come to know it. It is already being championed in the gaming, media, and entertainment industries, though the banking and financial services industries need to jump on board in 2023.
In doing so, banks will be able to provide customers the personalised experience of visiting a bank branch without the long travel times to one. For example, voice-based contact centres may make way for bank executives’ metaverse avatars, which will enable banks to provide their clients with more in-depth, real-time information (e.g., statements and forms) than they could have over the phone.
Training will also be impacted with the metaverse if it is integrated into banking, with personnel being able to generate clients and fictitious problems helping them to better equip themselves for a whole host of customer scenarios. It will also allow them to teach the children of their clients sound financial habits. Banks will be able to print virtual currency in the metaverse and assist children in learning about how exactly borrowing and saving money works, further allowing them to retain customers and encourage loyalty.
We feel that the metaverse will keep gaining users due to ongoing advancements in both technology and software that will further enhance the immersive experience. It is just a matter of making sure that the financial institutions have the mechanisms required for the platform’s demand in place.
Artificial intelligence
Artificial intelligence (AI) and analytical solutions, like the metaverse, will provide banks a better understanding of customers and therefore lead to better engagement with them by providing valuable insights to their finance management. To reap these benefits though, comprehensive data is required to provide the most effective engagement possible. Banks will need to employ platforms that compile information across customers’ other commercial relationships and their location in order to gauge their preferences and predict their future needs. For instance, data collected on a customer with their income and expenditure pattern, age and financial assets and liabilities, will allow a bank to recommend that they invest in a particular company or lower spending on takeaways.
Data analytics will also stop banks from bothering customers with service offerings that are not relevant to them. Rather, it will allow banks to deliver a more tailored offering: the right service at the right moment of time to the right person. This will decrease the chance of customers seeking out other banking services to fulfil their financial requirements.
Digital banking
The demand of Gen-Z for an Amazon type of a multi-purpose, personalised, seamless and entirely digital experience will not be going away anytime soon. Embedded finance, where banking products and services are inserted so seamlessly within customer journeys as to be almost invisible, is what banks need to adopt in order to meet this new need. A good example of its implementation is Paytm, which as a mobile payments and financial services company, offers a variety of services, including banking, insurance and investments, ticket booking, food delivery, shopping, and seamless payments to finance these.
In order to compete, banks will need to look at their apps and at increasing their capabilities beyond just the core banking processes. All these evolutions – ecosystem play, platform business model, embedded finance, and app-style capabilities – call for comprehensive digital transformation, start from the banking core. So, as banks embark on this digital journey, they should still continue to create products and services that are highly competitive. This is particularly significant as in difficult times, addressing customers’ needs, above everything else, should be the main priority.
Automation
The idea of ‘quiet quitting’ is a trend that has gained traction in the wake of COVID-19. There are a number of factors that lead to the phenomena, one being that a substantial amount of the tasks that managers set for their employees are tedious, and are certainly not conducive to a happy, productive workplace.
Monotonous, unfulfilling responsibilities only do harm to a banking sector that is intent on attracting and retaining the best talent. This is where it becomes necessary to introduce a technology-augmented workforce that uses both humans and machines.
We feel that organisations in 2023 will continue to automate using both traditional and newer, more emerging technologies, that range from open APIs driven automation, robotic process automation (RPA) that automate repetitive and rule-based human processes, along with through blockchain-powered private, permissioned networks for payments and trade finance. Going forward, these applications will free employees from manual and non-creative work that inevitably leads them to boredom and/or burnout.
