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ACTIVE LEARNING: HELPING BANKS EVOLVE DIGITALLY

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By Alexia Pedersen, UK Country Manager, O’Reilly

 

A new normal demands new technologies. The pandemic has pushed financial institutions to achieve seven years’ worth of digitisation in a matter of months. Going forward, this process will continue as financial institutions leverage new technologies to cope with a rapidly evolving remote customer base. Yet staff first need to know how to use these new technologies to guarantee the success of the enterprise.

So, what technologies should banks focus on to make sure they continue to flourish? How do they develop the skills needed to unlock its potential? An approach that puts ‘learning on the job’ at its heart is the answer.

 

The technology horizon

The pace of technological change won’t slow any time soon. In fact, it’s more likely to accelerate as key stakeholders see the benefits of tech adoption first-hand and push to take them even further. During the pandemic, digitisation efforts were focused on enabling work and services to continue despite the challenges and restrictions. The next step will be to leverage technology that makes these even more competitive and efficient.

As a result, the great cloud migration is certain to continue. When data is centralised and accessible in the cloud, it becomes easier to manage and apply sophisticated analytics to. The output will be more immediate, personalised customer experiences, key at a time when customer interactions will remain digital-first or digital only.

Alexia Pedersen

There’s also a growing regulatory imperative behind cloud adoption. Stricter regulations and changing technology require financial services organisations to make major changes in how they handle sensitive data. A cloud-based architecture gives them the speed and agility required for continual delivery and faster time to market, with the peace of mind knowing customer data is secure.

Financial institutions will similarly double down on their investment in artificial intelligence (AI) solutions. AI leaders in financial services are already achieving a fifth (19%) of all companywide revenue growth thanks to their AI initiatives. By combining deep thinking and machine learning with powerful supercomputing, institutions can automate complex tasks and decision-making processes at every segment. More powerful virtual assistants are on the horizon for both staff and customers, boosting efficiency and serving a more satisfying user experience.

It’s also important not to overlook the potential of blockchain. While not a new technology, it will become more prevalent outside of fintechs as traditional banks seek new ways to grow their profit-to-cost ratios. Blockchain transactions are transparent, highly secure and millions of times cheaper than traditional transaction costs. As more financial institutions realise how blockchain can improve security, save money, and improve customer satisfaction, more will move adopt the technology.

 

Learning in the flow of work

The power of the cloud, AI and blockchain can be transformative for a business in terms of output and efficiency. But it will sit inert unless a company possesses the skills and knowledge to leverage it. This is a widespread concern – almost three-quarters (72%) of banking executives believe there is a moderate or significant skills gap threat to their goals.

Competition for talent is ferocious, meaning institutions can’t hope to plug the skills gap with new employees alone. As the tech stack evolves at record pace, organisations must find new ways to quickly and efficiently upskill their current workforce so they can better leverage the technologies they are investing in.

This will require taking a novel approach to learning and development. An estimated $130bn is spent on training programmes each year, with only 25% of it judged to be actually effective. Often, the problem is the poor quality of the set materials and their delivery, making it more difficult for employees to engage with.

A shift from designated, ad-hoc learning to active and organic development will yield better results. Learning and development leaders have to stop thinking about learning as a peripheral requirement for their employees. With the pandemic already straining people both personally and professionally, asking employees to stay engaged with ‘required’ learning is an outdated approach that just adds additional requirements on top of already heightened workloads.

By contrast, the best training programmes recognise that learning is an ongoing exercise. The objective is to enable employees to learn on the job and apply that learning directly to their work. Give them access to the new tools and technologies and then let them get their hands dirty. Allow staff to learn and grow in their daily routines by applying today’s technologies to grow and perform in their everyday roles. Strive to create learning environments, rather than learning requirements.

The ubiquity of technology and the rate of technological advancement has changed every job in today’s world. You don’t have to hire new people or have them take days off work to get up to speed. Instead, treat virtual learning as active learning in the flow of work. Pointed, immediate learning in the moment will allow people to instantly apply what they know and gain feedback organically as they go. This is key to mastering the technologies of tomorrow.

 

Banking

WHY THE TIME IS NOW TO BANK BEYOND BORDERS

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by Lili Metodieva, MD of Monneo

 

As our world becomes more interconnected, so too does the need for banking systems to follow suit. In the past, businesses and individuals were often restricted to banking in a single country, but the rise of borderless banking is enabling both to benefit from greater financial freedoms. In this article, we will examine why this trend is so important and explain how Fintech companies are helping to make it possible.

 

What is borderless banking?

Simply put, borderless banking refers to any bank account, which allows users to spend, send and receive money across different countries and currencies, without incurring heavy fees. The concept has become increasingly popular in recent years, with more people now working in cross-border job roles and with many businesses requiring capital in a different currency than that of their country of origin.

For customers, borderless banking is making cross-border financial transactions more efficient and cost-effective. Through its rise, businesses and individuals can gain easier access to international streams of capital, which is crucial in this current moment of economic uncertainty. In fact, 74% of companies say cross-border payments have helped their business to survive [1].

 

Where do IBANs come in?

International Banking Account Numbers (IBAN) play a crucial role in facilitating borderless banking. The globally recognised system enables cross-border transactions to happen safely, by providing each international bank account with its own unique 36-digit alphanumerical code. On account of this code, financial institutions can quickly identify where funds are coming from, as well as where they’re going to.

More recently, providers such as us have been able to deliver Virtual IBANs (vIBAN). Working alongside a network of well-established European and International banks, we’re able to offer businesses a single platform interface that consolidates the management of all IBAN accounts. In turn, our multi-currency service makes conducting global financial transactions incredibly straightforward.

 

How has Brexit affected borderless banking?

The COVID-19 pandemic has accelerated the growth of borderless banking and services related to it, but other developments, such as Brexit are beginning to stand in its way. Most notably, the drawn-out withdrawal process has seeded a growing reluctance amongst risk averse, larger organisations to settle transactions using UK bank accounts or IBANs, due to unfounded concerns around regulatory complexity.

Despite leaving the EU, the UK remains a member of the Single Euro Payments Area (SEPA), so it’s unclear why these concerns around British IBAN accounts exist. Regardless, this unfortunate development must be addressed quickly as it has the potential to adversely affect the livelihood of businesses and individuals at a time of critical need.

 

What does the future hold for borderless banking?

There’s clear demand for borderless banking and borderless payments, but the discrimination of certain IBAN accounts represents a major obstacle, which could stand in the way of their widescale adoption. Moving forward, there needs to be a push towards borderless IBANs, which will make international financial transactions more reliable. At the end of the day, this is what IBANs were originally created for, so it’s important the current problems are rectified quickly.

To ensure this can happen, the industry needs protection and clarity from regulators. Likewise, it’s now time for membership organisations to stand up on behalf of the sector and lobby for the financial inclusion of businesses.

If the confusion regarding UK IBAN accounts can be sorted in a timely manner, businesses across the nation, as well as those further afield can look forward to a future of more streamlined and effective financial services. With this support, the diverse sector can deliver further access to innovative financial services and products, which improve outcomes for businesses and consumers alike.

As a sector, Fintech has the potential to provide vital assistance to the wider economy, particularly in an era of increased cross-border business. At Monneo, we’re committed to being part of that change and as a part of organisations like ‘Accept my IBAN’, are working towards reporting and ending IBAN discrimination.

[1] – https://www.mastercard.com/news/research-reports/2021/borderless-payments-report/

 

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Banking

IT’S TIME FOR BANKS TO SIT THEIR CUSTOMERS DOWN AND TALK OPEN BANKING

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Eugene Danilkis, CEO at Mambu

 

We are living in an experience economy, and banking is no different. Customers need innovative payment and finance management solutions. New entrants are edging into the landscape and challenging existing players. This should mean users have a better view of their finances and the tools they need to manage their money – but banks are failing to deliver.

Personal finances are a complex beast, emotional pulls are strong, and the worry of financial security is always on the mind. It’s the job of banks to be the shoulders customers can lean on and trust.

Open banking was supposed to take this to the next level, enabling banks to deliver personalised products and services based on improved data sharing and customer insights. But three years on, adoption remains sluggish. So, why is open banking failing to live up to its promise?

 

A missed opportunity

Open banking was introduced to the UK in 2018, but consumers are still mired in confusion as to what it means and how it helps them. According to Mambu’s global open banking survey, 61% of consumers say they’ve never used open banking, despite more than 8 in 10 using one or more mobile banking apps.

Eugene Danilkis

This is a problem for banks and consumers alike. Lack of understanding around the technology is hindering its adoption, despite this being in the best interests of both. By enabling the secure sharing of financial information, open banking creates an improved customer experience. Not only does this minimise friction and make online payments faster and easier, but allows for personalised services and greater automation, enabling customers to take advantage of tools like budgeting apps.

For banks, open banking is an opportunity to build innovative new products that will improve the customer journey, helping them retain accounts and acquire new ones. By collaborating with third parties, banks can hyper-target customers and build services that address specific user needs, increasing customer satisfaction and in turn brand loyalty.

It’s true there’s been a recent spike in open banking users. According to Juniper Research global, open banking users rose from 18 million in 2018 to 40 million in 2021. But this can be traced to the necessities of a pandemic rather than any sudden clarity in communications.

 

Putting customers at the heart of communication

Mambu’s research shows more than half of consumers (52%) have never heard of open banking. COVID-19 may have increased the uptake of the technology, but it hasn’t increased understanding among users.

So, what can banks do to encourage consumers to embrace open banking? Fundamentally, they must better educate their customers in terms they understand. This means talking to them like human beings, using clear and transparent language to simply explain the personal benefits open banking brings and why it’s really just smart banking.

The understanding gap between technology and terminology shows that consumer demand is there, but better communication is needed. Making sure consumers truly understand the tools they’re using, the control they now have over their finances and how open banking improves the customer experience is vital to dispersing the current fog of confusion. It’s the benefits of this technology that banks need to hone in on: customers ultimately care about what open banking can do for them and how it’s going to make their lives easier.

Centering the customer and their needs in this way will allow banks to fully realise open banking’s potential. The technology has already given them the opportunity to develop valuable services for customers that help build brand loyalty. But the industry has failed to put the customer at the heart of their communications and processes, and show them how much better banking can be.

 

Building trust

Key to reversing this trend is addressing consumer concerns around data privacy and financial safety. Yes, banks need to prioritise simplicity and clarity in messaging, but this isn’t an excuse to shy away from important conversations. Just because there’s an understanding gap around open banking doesn’t mean consumers aren’t switched on about tech and financial issues.

Mambu’s survey found nearly three in five customers have concerns about privacy and security in relation to open banking. So, it’s vital that banks provide reassurance and relevant information about data sharing from the outset if they’re to assuage these fears.

The industry can also encourage greater adoption by developing and improving open banking interfaces. Banks are the gatekeepers to how easily end-users can authorise certain actions, manage third-party access and navigate different open banking functions. If the interface is user-friendly, customers will have a better experience of the technology and be more likely to use and recommend these services.

 

Time to get talking

Customer communication is holding the industry back.. The ability of open banking to transform financial services is a concept that industry players are well-versed in. But the feeling isn’t mutual for customers.

Banks are failing to capitalise on the open banking opportunity by engaging with new and existing customers about what the technology can do for them. Debunking  common myths can open the door to increased growth and trust for banks, as they seek to open up new revenue streams post pandemic..

Make no mistake, open banking isn’t going away. But customers will if banks don’t get talking.

 

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