The world has transformed into one which is constantly seeking the fastest and most efficient route. Loyalty towards services is not a priority today as customers are willing to switch to a service which caters best to their needs.
OpenGov’s Breakfast Insight on Friday, 23 August 2019 was an insightful discussion on the future of banking. The insight session saw various Australian banks and financial services gathered together to have an exchange of knowledge on the importance of incorporating innovations into processes and services and the disruption caused by technology.
The discussion session focused on the three key areas, but true to the OpenGov style, allowed delegates to explore other relevant issues as well:
- How technologies can fuel innovation in organisations
- The roles of customers and businesses in the industry
- Key action plans to be taken
Think outside of the box
The world shifting is fast into the “mobile boom” was the opening address made by Mohit.
He talked about how the new wave of millennial customers are “born digital” and are demanding simple, fast and convenient digital transactions.
He stressed how it is crucial for financial services to practice “Know Your Customer” (KYC) and to constantly reinvent their services with technology as customers too are constantly reinventing themselves with technology.
He stressed that culture is the hardest part to change a digital ecosystem. Businesses are not fully open to the idea of incorporating technology into their processes and services.
Mohit explained that it is the “small things that matter” when it comes to technology. What may not be considered vital actually plays a huge part.
He touched on areas of concern in the implementation of KYC digital services – privacy and security.
While possession of personal information of customers allows financial services to employ them in real-time, distrust and fear exist among customers on how and where else their information is being used by these organisations.
Mohit concluded with the key message financial institutions need to constantly think outside of the box and to ensure that their “optic is never dry”.
Technology makes better business
Vincent Siow, Head of Business Development and Product Management at OneConnect started off his segment by introducing Ping An – how it transitioned from a financial institution to a tech company and tech solution provider today, over a span of 30 years.
He talked about innovations by Ping An which have been rolled out and are being used by citizens in China.
Ping An has developed an app which employs big data and artificial intelligence (AI) – voice, face and image recognition. Pictures captured on the phone are matched with those on a server to get an accurate assessment of repair costs from an accident and to aid with investigations.
This allows for superfast onsite investigations with 95% of investigators arriving at the scene in less than 5 mins. With the app, claims can be processed incredibly quickly; 98% being paid within a day.
Vincent also spoke about Ping An’s use of facial and micro-expression technology deployed in an online-credit approval process to determine the honesty of a loan applicant.
The app’s anti-fraud system is incredibly accurate and has a fraud identification ratio of over 80%.
OneConnect is one of the 5 eco-systems which Ping An has created to ensure that they sustain growth and continue to serve their customers well in the face of a slowing down Chinese economy.
OneConnect spearheads new technologies and drives Ping An’s various platforms.
Ultimately, Ping An’s focuses on advancing technology has allowed processes to be cost-efficient and to be done at a much faster rate, raising productivity and giving better services to customers.
OneConnect is a FinTech SaaS provider of advanced technology-enabled business solutions to small and medium-sized financial institutions, covering all areas of office functions.
A leading solutions provider, they are experts in technologies such as AI, blockchain, cloud platform, and biometrics identification.
They have over 100 products under their four main business disciplines:
- Digital bank solutions
- Digital insurance solutions
- Digital investment solutions
- SaaS cloud platform: digital sales, digital product development, digital risk management, digital operations, and technology
OneConnect had previously collaborated and supported OpenGov for the OpenGov Breakfast Insight session in Singapore during which they had shared of the innovations and journey of Ping An over the years.
Customers canon businesses
To understand why the needs of customers have changed, financial institutions must first understand what is disrupting our world.
This was laid out by Sushil Israni, Executive Director and Head of Change and Transformation at the Bank of Singapore.
He shared the following causes for the above-mentioned disruption:
- Internet and Mobile Computing
- Pace of Technological Innovation
- Tectonic Demographic Shifts
- Globalisation and Hyper Connectivity
Sushil gave an insight into the complete digitalisation of banking – Bank 4.0.
He said that there is an ongoing replacement of traditional banking systems by digital ones.
Addressing the speculation of FinTech (financial technology) attempting to take over the role of banks, he clarified that FinTech does not play the role of a bank. Rather such tech is designed to collect data like customer origination and sales.
They also focus on other higher-value points of customer interaction in businesses and own those or trade market share in that area. He emphasised that banks should start focusing on these areas too.
The scene of banking will transition into one where banking is something people do and experience.
The winning of customer’s trust will be gained by a bank focusing on differing their utility from other banks, instead of their products or channels.
He said that reinventing a bank’s system requires First Principle Design Thinking: How can we completely remove the need for annual reviews?
That includes the use of Artificial Intelligence (AI) for the processing of instant claims, the use of facial recognition for consumer lending, cloud platform for healthcare services, and Big Data for all the above processes and services.
Giving a BOS lens view of what the financial industry will be transforming into, Sushil mentioned that channels (eg. mobile phones, iPad), networks (customers, financial partners etc.), platforms (banks will transition into digital platforms), and partners will be working interconnectedly, surrounded by a wall of security.
Consolidating everything that he mentioned above, he listed:
- Focusing on customer journeys for defining business vision
- Attack belief system of all personnel and foster radical re-imagination
- Create an experimentation platform and promoting innovation amongst all staff
- Define product streams and product owners and set deliverables for roadmap development
Sushil concluded his presentation by addressing the question, “So who wins the future of banking?” His answer – the customer.
Polling questions and discussions
The session transitioned to a more interactive polling and discussion session. Delegates answered questions on their issues/concerns/actions taken towards the future of banking.
33% of delegates voted cloud architecture as the technology with the highest level of competency possessed by their organisation. One of the delegates pointed of how his organisation is dabbling in the areas of expertise of all the technologies listed (ie. AI, Big Data, Cloud) and to leverage on all of them at the same time.
“Disruption to the Australian business” received the highest votes of 42.1% as the main motivation behind technology development.
A delegate said that it is more of looking at it as “change” than “disruption”: A change for the good and a change of customer experience. Pushing the barriers of change to provide a different and better customer-centric experience of services.
More than half of the delegates (56%) envisioned the future of the banking landscape to be revamped into one with FinTech and banks carving their niche areas each while competing in others.
Delegates walked away feeling enriched with knowledge on the technologies and principles that are to be incorporated into their business plans for achieving the best results. There was a consensus that the new wave of customers expects efficiency and immediate provision of services. Hence, it is imperative that the financial sector understands its customers’ needs and incorporates innovation in their processes and services.