How banks can thrive amid disruptive forces
With an Open API economy and fintech partnerships, banks can accelerate their digital journeys.
The Great Recession of 2008 changed the corporate world, driving regulation and transparency. It also heralded a technology-driven world, which continues to have a massive impact on minds, economies and politics across the globe. It accelerated global convergence, growth of economies and the emergence of the new tech world order.
Then arrived the Great Pandemic of 2020 which ripped through lives, economies and politics, and changed the world permanently. It changed how people interact, how they consume and how and where they work. It also created a small number of winners and a large number of losers. The single factor that segregated the winners and losers: can your product or service be availed of with a click of a button?
Sure enough, most demand was absorbed by players, who were ready; even as they struggled to deal with surge in volumes; the smallest and nimblest of businesses scrambled to create an ecosystem, where they could serve the online-only consumer. The long duration of the pandemic has also ensured that some of these habits (read ‘convenience’) will stay forever.
The financial services industry is no different. While most of the industry had already taken giant steps in driving digital channels and were hence better prepared, they have faced the onslaught of the ‘light-footed’ fintech players as well as aspirations of ‘big tech’ companies to step into their world. Example 1: A consolidation has occurred in the brokerage industry with ‘0-commission’ online trades with the emergence of disruptors such as Robinhood. Example 2: The payments industry segment has witnessed a shake-up with banks losing ground to several emerging tech operators and the threat of the big tech.
A new strategy for banks
The writing on the wall is clear for banks: in order to counter the challenges, operate like a tech firm.The industry is accelerating adoption of financial technology solutions with some of these initiatives:
- Improve experience: Leverage interactive automation; integrate consumption of products and services; enable real-time and seamless movement across entire spectrum of services – banking, brokerage, investment management, payments and mortgage lending.
- Modernize the backend: Modernizing legacy applications, middleware and data is essential to fully leverage the new technologies in order to enable delivery of personalized services to customers.
- Hybrid cloud adoption at scale: Expand the adoption of a hybrid-cloud strategy across core functions and not just peripheral services to enable scale across products and regions.
- Partner with fintech: Participate in an open API economy, allowing banks to use their platforms and leverage best-in-class solutions offered by fintech firms rather than forcing clients to choose between banks and technology-led providers.
We at Iris are well positioned to support our customers in the financial services industry with our laser-sharp focus on ‘change the bank’. For years, we have helped clients adopt new technologies at scale such as interactive technologies, data sciences, automation (AI, ML, NLP, RPA) and cloud.
Our unique ‘top-of-the-pyramid’ business model ensures that clients can lean on a highly experienced, steady team to deliver quality initiatives. We believe in the agility of smaller but highly-experienced teams rather than large ‘pyramid-shaped' teams that put a lot of pressure on clients to manage high attrition while trying to deliver important and time-bound technology initiatives.
Lean on the experts at Iris – ‘when it matters, we deliver’.
- Banks face headwinds from ‘light-footed’ fintech firms and the trend of big tech firms entering the financial services industry.
- Banks must participate in an open API economy that allows them to use their platforms and leverage best-in-class solutions offered by fintech firms.
- Iris is well positioned to support the financial services industry with our laser-sharp focus on ‘change the bank’ and its ‘top of the pyramid’ model.