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WAKE-UP CALL FOR THE BANKING INDUSTRY:

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WAKE-UP CALL FOR THE BANKING INDUSTRY: 1

The importance of performance in a customer-centric world

By Michael Allen, Solutions VP, Dynatrace

IT meltdowns have become an all too familiar feature of the banking landscape. Many of the major high-street banking chains have been caught in the crosshairs of the public eye following an ‘IT glitch’ that renders their ATMs, online and mobile banking or payment card services inaccessible to customers. However, these are not isolated incidents, performance problems are strangling the industry as a whole; no one seems to be immune.

I have great sympathy for bank IT departments; they are dealing with creaking legacy systems, soaring volumes of transactions, and pressure to innovate in order to compete. Today’s customers expect 24/7 availability. Failure to meet these expectations results in very public condemnation, as beleaguered customers flock to Twitter to make a public spectacle of their dissatisfaction. Yet to understand why these problems are occurring, you need to look at how the banking industry has been transformed over recent years.

The shift towards customer-centric banking

Michael Allen, Solutions VP, Dynatrace

Michael Allen, Solutions VP, Dynatrace

Times have certainly changed in the world of banking, driven predominantly by new technology and changing customer expectations. Traditionally, people would visit their local branch to conduct transactions, whereas now we expect the bank to come to us. People expect round-the-clock access, no matter where they are, and from whichever device they choose.  Added to this, customer loyalty is continually being weakened. Gone are the days of the ‘bank for life’; switching providers can be completed at the click of a button, as consumers Google their way to a better deal. It is therefore much harder to differentiate on rates; instead, service now holds the key to standing out in a crowded marketplace. As such, banks have to think carefully about the customer experience in a way they have never had to before.

The retail sector has been dealing with these challenges for years, and is in many ways better prepared. The likes of Amazon have blazed a trail in terms of user experience and banks are now running to catch up. As we see more retailers, like Tesco, start to offer loans, mortgages and other traditional banking services, banks need to make sure they close the gap. It is no longer enough to treat mobile as a tick-box exercise, or accept that web services will be periodically unavailable due to maintenance updates; any failures are highly visible to customers and can have a direct impact on revenues, reputation and loyalty. Not only this, but as banks’ internal processes are largely automated, meaning operations can come to a halt if systems are not running as they should be. It is no surprise, therefore, that technology performance is shooting up the agenda.

Technological warfare: legacy vs. innovation

While banks recognise the need for high performance across multiple platforms, delivering this is no mean feat. Given the nature of data that banks store, there are stringent regulations in place and security needs to be a top priority. Added to this is the sheer size of banking institutions and the broad range of specialist applications that are required to operate the business; making changes is a huge undertaking, involving thousands of employees and customers, across a widely dispersed geographical spread. This means many banks are encumbered by legacy technologies, as replacing applications and infrastructure is prohibitively expensive and risky.

Yet this reliance on legacy technology is creating difficulties in itself. For stability and security purposes, most customer data still resides on 30 year old mainframes; yet as IT becomes more consumer-focused, banks have to deploy newer, more agile technology in order to compete. As a result, IT departments are constantly trying to find fixes and bridges to marry old and new world technologies, while also ensuring round the clock availability; no easy task! Added to this, IT departments are siloed into different technology disciplines, with specialists focusing on different parts of the customer journey; this means the introduction of new technologies into the IT infrastructure is often fragmented in approach. As a result, inefficiencies can easily slip through the cracks, and problem resolution can take much longer than is needed.

No more excuses: The need for embedded performance management

As banks increasingly integrate new technologies with legacy systems, it certainly creates an added layer of complexity, but this is no excuse for slow systems or poor end-user experience. Legacy infrastructure is a reality, but that should not stand in the way of innovation. Customers should expect the same high levels of performance whether they are accessing their accounts on the web or on mobile, with browser-based and mobile applications that are designed with performance at their core; not as an after-thought. It is unacceptable for customers to be unable to access their accounts, even for an hour; excuses around high levels of demand and glitches are wearing decidedly thin.

Banks need to start reviewing technology performance from the perspective that counts: the customer’s. In order to gain a true picture of the end-user experience, banks need to stop looking at technology in isolation. What is needed is a holistic approach, with end-to-end visibility from the mainframe through to whichever device the customers is using. Performance monitoring and optimisation needs to be built in at every stage: from development, to implementation, right through to management and customer service. IT cannot keep passing the blame from one department to another when something goes wrong, they need to form a united front, working together to identify and fix problems swiftly and effectively. In order to gain this cross-silo visibility they need to deploy next generation performance management tools.

In short, for customer loyalty and satisfaction to grow, IT must act before business suffers and customers are affected. Banks need to get a handle on this situation; otherwise, we will see more failures and more unhappy customers.

Banking

The future of offshore banking

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The future of offshore banking 2

By Granville Turner, Director at Turner Little.

Despite its misconceptions, the popularity of offshore banking is growing. Not only is it a perfectly legal way of holding your money, but with the right professional advice, it is also reassuringly simple to open an account.

This ease-of-use is prompting many offshore banks to change their offering to compete and make overseas banking even more accessible. No longer is it limited to just the super-rich.

So, what does the future look like for offshore banks? We’ve compiled a list of the top fundamental changes happening in the realm of offshore banking.

Catering to niche markets is the future

Rather than managing account holder’s money in general, offshore banks are tapping into how they can best serve different demographics. Essentially, it is about taking a more bespoke approach to managing money at various stages of life.

But catering to a variety of markets doesn’t just stop there. Many overseas banks are now accepting crypto as a form of currency to appeal to digital, tech-savvy generations.

Cryptocurrency is also attractive for those who see the security benefits it can offer.

Paper chains are fast becoming a thing of the past

As banks move away from paper in favour of digital, security is on everyone’s minds. This is because information is an important asset to many businesses, so protecting it is vital. As such, banks are securing data with the most vigorous encryption security standards.

For account holders, this means digital bank transfers and communication become less of a risk and the smarter thing to do. Paper chains are fast becoming a thing of the past.

Instant access, day or night

In today’s digital world, you don’t need to travel overseas to open an offshore bank account; everything can be done online or over the phone. And like most UK standard current accounts, many offshore accounts now offer online and mobile banking features. So account holders can manage their offshore finances and investments while transferring funds with ease.

Branchless banking

Offshore banks are following the same route of challenging onshore banks by going branchless. This offers substantial benefits for account holders, as branchless offshore banks don’t pass on as much overhead costs to the customer. Ultimately, this means customers can earn better interest rates and other returns on their investments.

Happy to help

At Turner Little, we work closely with offshore banks to provide you with quality service tailored to your needs. With over 20 years of international banking experience and specialist expert knowledge, we will assist you with your enquiries, no matter how complex. And every account we arrange comes with internet banking, card facilities and the ability to transact internationally.

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Banking

Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos

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Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos 3
  • WeLab Bank designed, built and launched using cloud-native Temenos Transact in less than 10 months
  • WeLab offers next generational digital services for the 7.5m people in Hong Kong to access from their mobile phones
  • Customers can open accounts remotely in just 5 minutes with bank reporting 10,000 account openings within 10 days of launch

Temenos (SIX: TEMN), the banking software company, today announced that WeLab Bank, Hong Kong’s first homegrown virtual bank, has publicly launched using cloud-native Temenos Transact to provide a range of next generation digital services for customers to enjoy 24/7 from their mobile phones. Designed, built and launched in less than 10 months, the fully digital bank has seen rapid take up with a reported 10,000 account openings within the first 10 days of launch.

WeLab Bank is powered by cloud agnostic Temenos Transact for core banking along with Temenos Analytics and Financial Crime Mitigation. Implemented on Amazon Web Services and Google Cloud, WeLab is the first multi cloud digital bank in Hong Kong. Operating on multiple clouds at the same time gives WeLab increased operational resilience and disaster recovery capability and is a regulatory requirement of the Hong Kong Monetary Authority for new digital banks. According to the Economist Intelligence Unit 2020 report for Temenos, 81% of global banking executives surveyed believe a multi-cloud strategy will become a regulatory prerequisite.

Developing a cost-effective and scalable core banking solution was paramount for WeLab. Temenos cloud native software is built for the digital age using API-first and DevOps principles and engineered to deploy in containers and microservices. This makes it easy for WeLab to scale for future business growth efficiently and eliminates the need to provision for peak processing volumes so that the bank only pays for its actual usage, yielding significant cost savings.

Critically, with NuoDB the solution delivers a cloud-agnostic, distributed relational database that enables WeLab to deploy an active-active on-demand database across multiple cloud providers with near zero downtime failover.

Temenos Transact is a preconfigured system and so requires very little coding and with Temenos model bank to address local practices and regulations, WeLab was able to bring its service to market faster and extend its innovation with more than 400 out-of-the-box APIs.

With Temenos, WeLab bank is set to transform banking in Hong Kong. In as fast as 5 minutes, customers can remotely open a WeLab Bank account with $0 monthly fees and start enjoying differentiated services such as time deposits with competitive rates, an interest-bearing deposit account with an instant virtual Debit Card, and real-time payments powered by Faster Payment System (FPS). Everything can be done on a mobile phone, simply and effortlessly.

Adrian Tse, CEO at WeLab Bank, commented: “WeLab Bank was born from an initiative to reimagine the banking experience for the 7.5 million people of Hong Kong. From the start, we knew this vision needed the most advanced cloud native technology and a partner that shared our vision for digital transformation. With Temenos we have efficiently built WeLab Bank from scratch, free from any legacies, with innovative features that proactively help customers to take control of their money and their financial journey.”

Max Chuard, Chief Executive Officer, Temenos, said: “Congratulations to WeLab Bank on the launch of their trailblazing new digital bank. Building and launching a licensed bank in such a rapid timeframe is a fantastic achievement and we are proud to have supported them in becoming the first multi-cloud digital bank in Hong Kong. Temenos cloud-native, cloud-agnostic strategy means we can satisfy the needs of the most innovative and ambitious neobanks like WeLab Bank to run on multiple cloud providers. We know this is just the beginning for WeLab and we are excited to be part of their story as they revolutionize banking for people in Hong Kong.”

Bob Walmsley, CEO of NuoDB said: “We are excited to be partnering with Temenos to help WeLab Bank achieve their aggressive launch timelines and deliver innovative banking services to its customers. We were inspired by the technical vision of WeLab and knew that executing an on-demand, multi-cloud strategy was a perfect fit for NuoDB. Our enterprise-class, distributed SQL database combined with Temenos’ cloud-native technology helps banks of all sizes around the globe migrate to the cloud to improve agility and reduce costs.”

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Banking

The Bank is Where the Heart Is

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The Bank is Where the Heart Is 4

By Nick Barnes, Practice Director, Financial Services & Customer Success at JRNI

When unexpected events occur, people turn to their banks to provide a sense of trust, security, and stability. They need to be available anywhere, anytime, and from any device. As it’s a business based on trust, one-on-one communication is key.

With the world still emerging from the COVID-19 crisis and endeavouring to avert a possible second wave, every country, state, and region has their own unique requirements. Plus, every customer or member has their own demands. Experts and pundits have discussed a new normal, but what’s normal for now involves keeping customers and employees safe while also providing the same sense of stability as before.

For banks, building societies and credit unions, the main concerns include how to maintain personal relationships amidst social distancing; how to be available at any time on any device; and how to provide a sense of calm and security amidst the chaos.

Adapt or fall behind

Customers are quickly learning which of their service providers are adapting best to this new world. Are financial services providers like banks and credit unions adapting, or falling behind?

Finances are a highly personal topic, and often, illogical or emotional. Will I have enough? Will it be available when I need it? It is always a hot topic of conversation, but especially during a pandemic when unemployment rates are rising, and the economic landscape is unsettled. In the past, a customer could walk into the bank, have a reassuring conversation with a representative and move on.

So, how can banks help their customers through tough financial times during the current crisis, when in-person communication is nearly impossible? One solution is to provide helpful, personalized customer service through digital channels.

While in-person assistance will remain important after COVID-19, customers are looking for assistance now.   Banks are turning to remote video and voice appointments to boost customer satisfaction and meet customer expectations.

3 reasons to use remote appointments

1. To comply with social distancing

Our Modern Consumer Banking Report​​​​​​​ last year showed that when consumers visit branches, it’s primarily to talk face-to-face and ask questions/get help.  Research from Bain reinforces this, and emphasizes that “many retail banking customers think it’s easier to purchase through a human channel, or prefer to speak with an employee before buying a product.”

Due to social distancing measures, branches cannot be customers’ primary way of managing their finances during this pandemic. However, this doesn’t mean that customers aren’t interested in personalized attention that can be made available via video and voice.

2. To meet new demand 

Although spending habits may have changed, consumers are still making critical financial decisions during the COVID-19 pandemic.

Individuals: The financial effects of coronavirus are drastically different from one customer to the next. While some are counting down the days to receipt of their unemployment check, others may be taking advantage of low-interest rates to buy a house. Ultimately, banks and credit unions need to address each customer segment with a unique message and way of providing assistance.

Small business banking: Countless small businesses around the world have been forced to close their doors. Whether they’re needing loans, payment deferrals, or advice, small businesses are looking to their bank as a guide, and a comfort.

Investment management: A recession is upon us, and with that comes a new approach to investing. Financial advisors are fielding questions, providing recommendations, and staying up to date on the market. Beyond this, many are building entirely new strategies for their clients.

Regardless of customer type, it’s clear that each subset of customer needs help from their financial institution at this time.

3. To boost customer retention

​​​​​​​​​​​​​​Financial institutions cannot afford to lose customers during the pandemic, so customer retention is crucial.  Great customer service boosts customer loyalty, and research from Bain shows that loyalty is key to retention:

  • Customer loyalty increases revenue, and loyal customers are less likely to switch to a competing bank.
  • Customers who are a bank’s “promoters” recommend the bank to others as much as six times more than “detractors.”
  • A bank’s “promoters” spend one-quarter more than detractors on their primary credit card.

Ultimately, being able to connect with a customer in need using video or voice can give customers peace of mind and boost loyalty. Delivering personalized financial services without interruption is crucial.

Initial results from video banking show that consumers consider the service valuable. Phoenix Synergistics’ survey from December 2019 found that 17% of customers polled had used video chat through a website or app with their financial institution. Of those that had used video chat, 89% found video chat valuable.

Some suggestions for banks using remote video or voice appointments would be to: firstly ensure your solution is secure and doesn’t expose personal information outside of the conversation; secondly create a culture of consultation to alleviate outstanding fears; thirdly leverage appointment setting to allow customers to pre-schedule consultations and enquiries; finally include remote appointments as part of a wider suite of ‘touchless’ offerings.

The dos and don’ts for bank branches

Forty-three percent of banking customers have expressed their desire to change the way they bank due to the pandemic. As with retail and hospitality, several key customer segments have doubts about visiting physical locations and are transacting more remotely.

The challenge for banks is to make services available wherever customers want to bank – be it by phone, online, or in branch – and when it comes to any transaction, the key is to make customers feel cared for, heard, and secure.

With social distancing parameters in place along with other health and safety measures, there’s significant focus on the need to retool the branch experience. Here are a few suggestions as we move into that next stage of business and interaction:

DO: Have a plan.

Nick Barnes

Nick Barnes

Think about how customers will enter and exit each location. Plan for increased space between people in line, how to attend to at-risk customers, properly spaced lobbies, and waiting areas. Consider your employees and what they need in order to stay safe including break rooms with increased space between lounging areas, removal of shared snacks, availability of hand sanitizer and masks.

DO: Make sure you can effectively manage footfall.

Overcrowding will create fear and loss of trust. Make sure you have plenty of directional signage, crowd control measures, and staffing. Solutions including people counters, occupancy managers, and pre-booked appointments​​​​​​​ both allow for the throttling of traffic, and the ability to build in cleaning time.

DO: Hire the right team and staff adequately.

Being courteous and in control will be the most important ingredient to success. Have enough staff, you will need the extra hands to ensure that all staff is properly trained and ready to enforce new protocols.

Some customers will be understandably anxious going into branches, and some will want to feel that everything has returned to normal, so staff may need to be very firm and well-versed in a new operating style.

DO: Offer customers the ability to bank when and how they prefer.

We’re not suggesting that you remain open for 24 hours, but the goal is to make it easy for the customer. Adding the ability to set an appointment with a wealth manager or an advisor online will enable customers to bank from home, and will enable banks to provide the personalized service customers have come to expect.

Leverage online appointment confirmations to remind customers to have key documents available if they need them. Virtual solutions position the bank to serve as an advisor rather than just a financial institution.

DO: Demonstrate your commitment to a safe environment.

Use clear signage to convey the measures in place to ensure customer and employee safety. Make hand sanitizer or wipes available throughout the branch, and in all high-touch areas. Ensure cleaning supplies are visible, around doorways and ​​​​​​​near greeters to provide customers with an added sense of security. And make sure that employees are following every measure required of customers.

DON’T: Lose customer confidence.

If you are not prepared, it will show, and it will be very hard to gain back customer confidence once compromised. Social media will not be your friend. Forrester Research reports that 52% of US online adults prefer to buy from companies that demonstrate how they are protecting customers against the threats of COVID-19.

DON’T: Overcrowd or fill your branch to capacity.

Consumers are being trained to avoid crowds, so failure at the branch to comply could result in losing their business. Most physical locations are operating with fewer staff and accommodating 10 – 25% of the traffic once allowed. Keep in mind that you only have one opportunity to make a first impression on customers, and they’re looking to trust you have their best interests in mind.

DON’T: Understaff.

You will need to expect the unexpected and having more hands-on deck will prove to be beneficial in the long run.  Having the wrong staff, or those that don’t take the time to learn new operating procedures or feel comfortable telling that customer who won’t keep a mask on, may not be the best fit.

DON’T: Make it difficult for customers to do business with you.

Social distancing introduces a number of disruptions to the way you’ve traditionally done business. So limiting options to customers – providing no ability to bank online or via phone, not having a live customer service voice or chat option – is not going to help. In addition to making sure the services are available, it is imperative to communicate all options to customers.

DON’T: Assume someone else will do it.

Bank staff need to show that the branch is being tended to, cleaned between visitors, and before opening each day. It is important that staff jump in to help move customers safely through the branch, ensure their questions are answered and overall, take a proactive approach to service without assuming that a sign or another staff member will take care of it.  Customers will come to the branch, but gaining their confidence is everything. Don’t lose it by not being prepared. It will be very hard to win it back.

With the constant threat new restrictions in response to COVID-19 outbreaks, banks will need to take a long view on how they enable the operational flexibility that will be needed to adapt to fast-changing conditions.  As people prepare to live more risk-averse lives, banks will need to go the extra mile to ensure customers feel less wary about visiting in person whilst also offering a seamless experience for those customers who prefer to remain in the safety of their homes.  Those that manage to do so will emerge from the crisis with a sustainable advantage over their competitors.

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