How can banks stay relevant as the big-tech giants move in, promising payment and financial management innovation? Nuxeo’s Dave Jones serves up four tips for maintaining digital equity
As open banking continues to make its mark, financial technology innovators – from small fintech startups to the internet giants – are increasingly making their presence felt in financial markets. The upshot is that traditional financial institutions must work harder to stay relevant to current and prospective customers. If Gartner proves to be right, within a little over a decade, 80 per cent of established players could be out of business or suffering other ill effects as more relevant and enticing alternatives enter the market.
Customers are craving change, too, and a financial provider’s digital prowess is assuming growing appeal. So why haven’t traditional banks upped their game? Digital transformation is hardly new to the FinServ agenda, yet to date the established players have largely failed to deliver anything significantly different and exciting.
At a very practical level, major institutions are not set up to be agile. Even today, over three-quarters (76 per cent) of organisations simply can’t find the information they need to deliver digital service innovation, according to recent research by Nuxeo. Nearly the same proportion (75 per cent) want to extract the required data from “locked” legacy systems; and 79 per cent can’t connect different data sources to support more dynamic services.
By contrast, alternative financial service providers, particularly the big-tech brands, are less encumbered by traditional information systems – for instance enterprise content management (ECM) solutions which have failed to evolve with modern priorities.
4 digital next-steps for 2019
As the new year gathers momentum, there are four practical steps banks should consider to bolster their position:
- Accept but move on from legacy constraints
Rather than think in terms of costly rip-and-replace programmes, or complex systems integration projects, there is a way to move forward while still exploiting legacy investments. By introducing a cloud-optimised content services platform alongside existing core business and IT systems, banks can leave departmental or function-specific systems as they are for now, while tapping into their contents in support of additional and new use cases. That could be faster credit approvals, a more consistent experience across different customer touch-points, or creating enticing new products.
One of the immediate problems this approach addresses is the complexity of managing different types of data and content (video content, audio files, images, etc). ECM grew out of document management, yet most businesses today are not managed according to document-centric processes. The flexibility needed to be more customer-centric relies on being able to efficiently and easily unlock information contained within documents, and combine it with other data to build a more complete picture, allowing fast decisions and next actions to happen – aided by intelligent automation, where possible. This in turn could help reduce application approval times, for example.
The fact that content services platforms have been designed from the outset to be run on a cloud-based infrastructure means they are inherently flexible, scalable and future-proof too. They can potentially support any future customer service proposition banks may roll out.
- Achieve a clear line of sight across content silos
Even if information is stored in diverse systems, being able to see it all via one central hub will make it easier to manage everything from security, data protection compliance and customer permissions management, to new service innovation. The more complete the insight, the easier it will be for responsible teams to identify new product opportunities and/or maintain compliance.
- Innovate incrementally and at a faster pace
Once banks are free to do more with information they already have, they can start to press ahead with specific service improvements for customers. That could be something as simple as giving customers real-time insight into their overall financial status, across multiple financial products and reflecting up-to-the-minute payment activity.
- Delivering benefits today, while preparing for the future
After being limited for so long by locked-down data and finite system capacity, it’s important that banks build scalability and future-proofing into their strategies for information management. Avoid and instead keep your options open by leveraging a platform that has the adaptability and scalability option to support future growth.
The author is VP of Product Marketing at Content Services Platforms supplier Nuxeo
A detailed ebook exploring practical ways forward in financial services, 5 Digital Strategies to Overcome the BigTech Threat in Financial Services, is available to download on Nuxeo’s web site