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Pullen Daniel, Managing Director, Europe, nCino

The financial services industry enters 2018 with a heightened focus on enterprise-wide digitisation. This effort, coupled with changing technological advances and escalating market competition, provides an opportunity for financial institutions throughout Europe to approach banking differently. In 2018, leading banks will meet change head-on with reimagined processes that will embrace the need for the continuous evolution that this industry now requires.

The Autumn 2017 Budget, released just a few months ago, revealed that the productivity rate dropped from 2 percent to 1.5 percent in 2017. This decrease will prompt a focus on increasing productivity across all sectors in the UK, including banking. Major decisions and investments in technology will follow in 2018 to help correct this gap and boost process efficiency.Savvy banks will make greater use of its time and resources by adopting more nimble, agile solutions across business models.

Financial institutions should be encouraged that although significant technology replacements are typically met with angst and hesitation, the type of shift needed today is more about enabling change over time –equipping banks to scale and respond regardless of the market cycle, available technology or variable economic influences.Specifically, investments in solutions like the cloud can provide enterprise-wide digital automation while creating an IT infrastructure that is flexible, transparent and secure. The cloud is a great equalizer – its benefits are not determined by an entity’s size and scope. What this means relative to what was revealed in the Autumn 2017 Budget is that the degree of automation provided by cloud-based systems can sharply improve productivity rates in financial services, particularly in previously manual and cumbersome areas such as SME lending.

As new competitors such as alternative lenders continue to enter the landscape, banks must optimize the efficiency of their SME lending process in order to capture customers at the point of application, and then keep them engaged and well-informed through to funding. Banks that remain on paper-based processes will continue to experience internal siloes that never truly “talk” with one another. This forces redundant data entry, toggling between screens, and inefficient manual paper shuffling and filing. It also requires returning to the customer asking for the same information, time and again, and typically providing little convenience or option to how the borrower can deliver that information back to the bank. There is no visibility into the status of the loan at any point in time, and customers feel in the dark.

People will pay a premium for speed and convenience, but they shouldn’t have to.

The regulatory uncertainty circling the newly enforced PSD2 will further level the playing field for financial institutions and non-bank vendors. As the likes of Amazon, Apple and Google gain access to customers’ data, banks must equip themselves with the proper tools for best knowing their customers and establishing a digital connection with them to stay relevant. There isn’t the time to build out digital channels on their own, so more financial institutions will embrace fintech partnerships in 2018. Such collaborations can be successful when the solution provider complements the bank’s goals and objectives, quickly bringing a more efficient underlying technology to the table along with specialised expertise and support. Financial institutions will feel empowered through these newly forged relationships, finding a partner that’s open to and capable of vast integration – particularly with their core – as well as culturally aligned with the bank.

Financial institutions can no longer purchase plug-and-play solutions and update it maybe once every few years. A ‘set it and forget it’ approach must be left in the past. Instead, banks are succeeding by investing in comprehensive digital strategies that require continuous attention and innovation, and that also allow for them to flexibly evolve as business needs and customer preferences change.

Consideration around the adoption and implementation of new technology, specifically the cloud, is no longer an option – it is a strategic imperative. Nothing compares to the cloud’s ability to deliver both back-office efficiency gains and an improved means to digitally engage.The cloud’s nimble technology also welcomes an enhanced customer experience and interaction, while maintaining pace with the continuous innovation of today’s financial industry.Savvy banks are already reaping the many benefits of cloud banking, and are, as a result, gaining a competitive advantage for 2018 and beyond.

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