Banking and financial services, a critical pillar of the economy, has seen a major shift from the physical and traditional ways of operations. It has accelerated a never seen before digital push and a wider and larger financial ecosystem
As the work from home regime for everyone amidst the Coronavirus pandemic, providing customer assistance and services is now becoming the norm. The world has witnessed an inescapable reality in the name of COVID-19 and has turned our outlook upside down on perhaps everything we knew.
The infectiousness of Coronavirus is not a ‘normal’ one, and has disrupted value chains, communication, and operations like never. For FinTech and BFSI companies, the pandemic has been a real eye opener. It has drastically impacted business continuity and business models. Banking and financial services, a critical pillar of the economy, has seen a major shift from the physical and traditional ways of operations. It has accelerated a never seen before digital push and a wider and larger financial ecosystem.
A global analysis by Accenture stated that 79% of the banking executives agreed that there is an immediate need to re-engineer the experience that brings people and technology together. At the same time, 17% believe that AI is a critical aspect of their orientations. The findings showcase the belief of BFSI executives in the power of digital transformation. Whether be it front end customer services or the last mile, digital solutions have become the foundation stone for FinTech companies to curate customer experiences, retain and grow their market share.
Even before the pandemic, businesses had already implemented these digital and automation strategies for more efficiency of operations. However, as the crisis unfolded, financial institutions have responded quickly to the new scenarios by designing and launching new digital products to make everything accessible in real-time. The new financial ecosystem has seen emergence of new technologies; for interfaces – application programming human computer interface, workflow automation for internal and external functions, hybrid cloud services, AI and data driven storage and management and blockchain among others to streamline operations. Going forward, the sector will see a massive shift from branch banking, as customers get accustomed to digital processes, and would therefore prefer the enhanced convince and speed of operations. Further, many AI and ML-based applications are enabling companies to streamline credit lending, and processing operations, and customer interactions. From higher returns and operational efficiency, to lesser costs, a digital infrastructure will contribute to every arena of the financial value chain.
But simply being more digital or online is not going to cut it. From core banking, lending, insurance, or wealth management – digital now needs to be a backbone to ensure efficiency and efficacy. As BFSI players calibrate for the future, operations become digital and employees collaborate virtually from remote locations, it will also be important to build strong mechanisms in tackling cyber security concerns and risks. In such a scenario, more standardization and connectivity will be needed to unlock the potential of an all-digital ecosystem, which also necessitates more regulations and policies to drive this transition.
The prevalence of a contactless environment and social distancing has certainly steered a clear path to digitization and for the BFSI industry to move away from conventional and traditional. As financial institutions aspire for more agility in the New Normal, there needs to be a deeper review of practices, and controls to upgrade to ensure business continuity. With business no longer as usual or ‘Normal’, it is time for BFSI 2.0 which thrives on a digital – a futuristic collaborative ecosystem of all services and stakeholders.
The author is CTO & Co-Founder, Stratbeans