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HOW TECHNOLOGY IS DISRUPTING THE FINANCIAL INDUSTRY

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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 The MONETA team found that they were being held back by an outdated 15-year-old platform, which meant the bank was unable to support industry standards such as Open APIs.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.

 

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Finance

THREE STEPS TO ENSURE RECOVERY OF COVID LOANS GOES SMOOTHLY

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In the wake of the pandemic, the government acted quickly to provide financial Covid support packages to help struggling businesses. With the economy now recovering, Mike Hampson, CEO at Bishopsgate Financial explores the range of options available for banks to ensure that those loans are repaid.

 

Since the start of the pandemic, businesses have raised over £75bn[1] from banks and financial markets, through interest-free emergency support schemes. But the harsh reality is that not all loans will be honoured as the economy recuperates.

As a result, banking professionals with client relationship management experience and skills in supporting clients to repay loans in a challenging business environment, will be in high demand.

 

Mike Hampson

Setting up training capabilities for client support post-pandemic

Commercial bankers estimate 60% of new coronavirus scheme loans[4] will default or suffer other repayment issues that will drive previously unseen levels of non-performing loans. It’s a tough balancing act and one that demands careful management of the lending transaction lifecycle, from origination through to collection, recovery, and handling bad debts. Banks no doubt already have frameworks in place to manage these elements, but it’s highly important to make customer interactions as easy as possible and ensure their genuine concern for their customers is clear.

Subsequently, hundreds of workers at major banks including HSBC, NatWest and Metro Bank[5] are understood to be receiving training in how to deal with vulnerable customers and “demonstrate empathy” as the first wave of repayments for coronavirus loans fall due. Staff ‘sensitivity[6] training builds on client-support and workout capabilities, such as improving sensitivity to early-warning systems, developing short-term forbearance solutions and loan modifications, and providing guidance on alternative products.

This approach may further avoid the additional pressure on the UK’s mental health crisis as financial institutions prepare to call in loans issued during the pandemic.

HSBC, which now has 400 staff in its debt collection team,[7] said the aim was to ensure staff had a “consistent understanding of vulnerability” and are “aware of the factors that could make an individual vulnerable” when having repayment conversations with customers.

An executive at another bank said its expanded debt collection team was being trained in “empathy, vulnerability and listening skills”. The individual told The Telegraph: “Ultimately, we don’t want to damage the economy by being overly aggressive.”

A peculiarity of a crisis situation is that customers don’t always know what they will need until that need is pressing. Finding that their bank is prepared to help in unexpected ways will go a long way toward reassuring them.

[2] https://www.law360.com/articles/1355897/

[3] https://www.bishopsgate-financial.com/insights/the-change-perspective/the-change-perspective-2021

[4] https://www.grantthornton.co.uk/insights/how-to-manage-upcoming-non-performing-loans/

[5] https://industryslice.com/NewsLetter/8_33

[6] https://www.telegraph.co.uk/global-health/climate-and-people/covid-19-has-amplified-parallel-pandemic-poor-mental-health/

[7] https://www.msn.com/en-gb/money/other/bank-staff-get-sensitivity-training-before-calling-in-covid-debts/ar-BB1fNMte

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FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

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Marieke Saeij, CEO of Visma | Onguard

 

It’s clear that Intelligent Automation (IA) is still very much an emerging technology, with one indication being that is has only been mentioned a handful of times on Twitter since the beginning of 2021. Results from our latest annual FinTech Barometer reveal a mixed picture in terms of awareness, with half of finance professionals having never heard the term before. Whilst this is unsurprising for a technology concept very much in the ‘early adopters’ stage, organisations can stand to gain real benefits from embracing Intelligent Automation now, particular within the finance department. With this in mind, we explore some of these benefits and share a step-by-step best practice to implementing it into business operations.

 

Intelligent Automation ensures a predictable order-to-cash process

Such is the speed of introduction of new technologies that it’s a challenge for businesses to keep pace. As the newest innovation in finance, Intelligent Automation is one that organisations can’t afford to let pass by. It truly takes financial process automation to the next level. In addition to helping maintain a high-quality customer service, it also complements the existing skillset of finance professionals in the industry.

Marieke Saeij

While Robotic Process Automation (RPA) and Big Data are key innovations for the sector, IA can be likened to an additional layer that enhances existing technologies. By combining applications, this layer is capable of independently assessing situations and determining the appropriate process sequence. It can, for example, fully determine the risk of a specific customer, and can also predict at an early stage which invoices will be paid late, or even not at all, ensuring that finance professionals can then plan accordingly. The result is a reliable and predictable order-to-cash process.

 

The four steps to an IA-proof organisation

While the benefits of IA are numerous, implementing the technology can prove complex, although some are already treading the IA path without knowing it. In this instance it’s crucial to become aware and begin the purposeful process to full integration. Below are the four key steps to becoming fully IA-proof.

  1. Exploring the potential: Brainstorm where automation can be applied

Step one is to examine the extent to which automation can help your organisation. Blue sky thinking is the key here. What is the ideal relationship with the customer? What does the ideal order-to-cash process look like? In this phase, involving multiple departments from within the organisation is key, from management to operations. The finance professionals who have the most contact with customers are likely to have the strongest knowledge of which processes they would like to see automated. With no limits to ideas, it’s best to explore all the opportunities in the entire order-to-cash process and describe broadly the potential value to the organisation.

 

  1. Decipher which data and technology is needed

The second step is to map out which data and technology is required. Working with a specialist, either external or from the internal IT department, is beneficial at this stage to see where the opportunities lie. In many cases, off-the-shelf solutions are already readily available to help make the difference, so it pays to do the research and gain advice where possible.

 

  1. Firm up the strategy

With the plan mapped out, it’s time to fit the pieces of the puzzle together. Which technology and accompanying software is proving most valuable? It’s vital at this stage to analyse the results the organisation is achieving from deploying the right technology and software. It’s also important to outline any limitations and emphasising the potential risk of failure. This is the business case and the basis for the elevator pitch that will be presented to internal stakeholders.

 

  1. Draw up the roadmap and start benefitting from agility

The fourth and final step is prioritisation. The roadmap will describe step-by-step how to move from the undesired current situation to the desired end goal. In the first step, choosing a subproject that is relatively easy to achieve will help gain support from other departments within the business, and provide invaluable experience that can be applied to the more complex components that follow later. This agile approach facilitates a learn-by-doing mindset and allows the following steps to be tackled in a smarter and simpler way.

 

Effective preparation is half the battle

Exploring the potential of automation, mapping the required data and technology, establishing the strategy and laying out the roadmap are the four crucial steps to ensure the foundation for Intelligent Automation. Effective preparation and estimating which technology and accompanying software is needed will help to create a streamlined and error-free order-to-cash process. To ultimately save time and costs, empower finance professionals and maintain customer loyalty, the time for Intelligent Automation is now.

 

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