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COVID-19 has brought forth challenges and pushed banks to rethink their strategies to fit the evolving industry landscape. Post–COVID-19, the years ahead will bring in a range of opportunities and trends for banks. Banks will require agility to meet the growing expectations and make the most of the new possibilities in financial services.
Banks can transform traditional lending and basic banking processes using advanced predictive analytics and offer 24/7 service to meet customer expectations.
Possibilities for Digitization in Banks Post COVID-19
There is a rising number of new entrants in the banking landscape, such as a mix of challenger banks, mobile banks, neobanks, and digital banks, redefining banking functions and customers interactions.
The number of write-offs is steadily increasing as the banking markets are bearing the brunt of COVID-19 on their customers. Quite a few banks have also increased their lending limits as the pandemic eases up.
The general trend across the markets has shown a high-risk aversion, and so to mitigate this, banks have made their credit decision processes optimal.
Hyper-personalization will help banks grow their customer base and offer high levels of customer experience. It is one way for banks to stay ahead of the curve and fight competition.
A new range of digital platforms, connected wearables, and biometric channels will soon become the norm. Banks also leverage the existing mobile and internet channels. Banks will adopt an omnichannel approach to ensure customers receive seamless service.
Digital banking has paved the way for speed and instant transactions. Quite a few banks have also included Crypto and exotic payment types as the markets evolve.
Banks remain central in digital platforms because they have an extensive, trusted relationship with customers.
Regulators support innovation, which increases the speed-to-market.
Apart from these, there are three main drivers banking will see in 2021 and beyond. Core banking systems will have a significant impact on the bank’s ability to be agile and adapt. It will help banks to sustain their business in the long run.
There are no more “mass market” segments due to the entire business shifting to customer-centric banking. Banking is now all about individual customers, and bankers are creating one-on-one services. Therefore there is a likely shift in the entire culture of the banks and how they function.
Research studies have estimated that banks will witness a phenomenal increase in change (300–500%) and delivery of new products and services within a short period against the months it took earlier. The priority will be speed-to-market, continuous development and deployment, and governance for IT change.
All banks will soon move to cloud platforms and cloud native-based solutions to survive the coming days. Banking services are looking to shift from cost center to revenue enhancer.
Challenges faced by Banks under 3 Drivers:
Weak data governance
Legacy-based customer data model
Limited configuration model
Separate business & IT
Insufficient technical teams
Complex application platforms
Core banking confined to the datacenter
Most of the features available within the core banking systems have provision for change, but the extent of change and ease of adaptability is what makes the difference. However, banks need to adapt to the changing landscape, and the shift needs to happen top level to the lowest level. The need for modernizing core banking systems is a crucial necessity.
Configuration and Composability!
Composable Banking Platform is the new-age banking system that is gaining popularity. It is about self-service and new banking services by ecosystems inside and outside the bank. To build agility and improve banking services, banks need to know what can be configured or composed.
At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. Some of the features of Neutrinos Solutions are:
We are a company offering low-code banking solutions along with being an omnichannel banking platform. All low-code solutions are customer-centric and ensure you offer the highest level of customer experience.
Read our blog, Digital Transformation in the Financial Services Industry to know more.
To understand how you can achieve digital transformation in the banking sector, reach out to us now.