By Ian Bradbury, CTO Financial Services, Fujitsu UK & Ireland
Banking is one of the oldest industries in the world and, today, includes some of the largest and most established organisations around.
It is perhaps for this reason that banking can sometimes have a reputation for being slightly less agile than other industries.
While the truth is quite black and white, it is an industry that needs to evolve more quickly, but currently is unable to – constrained by years of technology debt and a deeply engrained culture. The challenge the banking industry faces is to drive down costs while delivering shareholder value – all while investing to become more agile.
We live in a world that is continually transforming. We’ve seen political, technological and economic disruption – with the pace of business faster than ever before.At the heart of this change will be digital and cultural transformation.
Wanting to understand people’s and banking industry’s relationship with technology better, we spoke with industry leaders and consumers up and down the country. The result was our recent report, Technology in a Transforming Britain.
It found that while half of business leaders from the financial services are saying banks will not exist in their current form in a decade, an overwhelming 95% believe technology is the key to driving their organisation forward.
It’s clear the future will bring change, but what does this change look like?
A more productive and efficient industry
It may not set pulses racing, but technology will improve the productivity and efficiency of the banking sector.
In fact, improving employee productivity (47%), operational efficiency (38%) and fuelling business growth (37%) were the key internal benefits financial leaders attribute to technology today.
This technology is facilitating a shift in the way that banks are collaborating internally. The traditional approach taken with functional teams is moving into more agile teams. This approach sees colleagues working more collaboratively, changing and improving things faster, with bottom up initiatives aligned with strategic objectives.
It is only with cloud-based services, collaborative tools and suitable accessibility that agile teams can function in a truly productive way. In a world of rapidly changing marketplaces and ecosystems, this is also vital for agile teams who collaborate extensively with external organisations.
Advances in technologies like Artificial Intelligence (AI) and Robotic Process Automation (RPA) will also have a significant impact on efficiency. These are the tools that will see mundane, repetitive tasks automated – improving accuracy, speed and ultimately driving down costs.
Automation will have a huge impact on banking in this respect, as workers will be freed up to be do more creative work and to focus on more valuable work – for example, delivering outstanding and improving customer service.
This will all be key to keeping up with a fast-moving business world where expectations and needs can change in the blink of an eye.
Personalised services and value-based customer relationships
Customer relationships are the foundations of every banking institution. In an increasingly competitive market – where smaller organisations are adding to the traditional mix of established players – getting customer interactions right and building a sense of loyalty is key.
While progress has been made, to-date, people can often feel that they receive a random mix of product and service offers – delivered through a range of channels in a totally incoherent manner. The result? Frustration, confusion, and resentment.
This has to change. And it will.
As banks get to grips with building better strategies around the use of data, we can certainly expect greater customer engagement in the future.
This means banks being better at collecting, processing, analysing and managing data – securely and with privacy and mind, of course.
The result will be better targeted and joined up services delivered over the right channels to customers. No longer will relationships be transactional, but based on the value that banks can offer in convenient and personalised manner.
Artificial Intelligence and customer service
At the same time, we can expect Artificial Intelligence (AI) to take centre stage in the interaction between the bank and its customers. This is something both consumers and the banking industry are ready for.
AI (13%) is the second technology they most want to see implemented to improve their experience in banking over the coming year. Given the potential impact of AI, it’s unsurprising to see that almost half (42%) of banking leaders are also looking to implement it in the next 12 months.
We’re already seeing AI become more and more common in the use of chatbots for customer service. We’re really just at the start here, however, and we’ve all experienced frustrations with automated services that are too simple and not yet ready for the market.
But this will improve hugely in the coming years, and we can expect a far better relationship with our banks in future.
Security will evolve
Cybersecurity is a challenge that won’t go away for organisations in any industries. But, in banking, the threat is an even bigger priority. In fact, more than half of the sector’s leaders (55%) say cybersecurity is their biggest operational challenge today – higher than the average across industries (48%).
At the same time, both consumers (15% – higher than any other sector) and banking industry professionals (35%) want to see biometrics – which is strong and simple to use – rolled out in the next year to keep the industry secure.
It’s no surprise, given that popular services, whether it’s Google Pay or Apple Face ID, for example, have made biometrics accessible for the wider population.
The power of biometrics does not need to stop there, however. Palm vein authentication is offering even stronger authentication than fingerprint or face recognition.
Fujitsu’s PalmSecure technology has a false acceptance rate tested at 0.00008% and false rejections come at just 0.01%, much more reliable than fingerprints. It’s already seen great success in the banking sector.
The service works by comparing the pattern of veins in the palm (which appear as blue lines) of a person being authenticated with a pattern stored in a database. As the palm has a broader and more complicated vascular pattern, which contains a wealth of differentiating features for personal identification, the palm is an ideal part of the body for this technology.
Banco Bradesco S.A., one of the largest banks in Brazil, was inspired by a significant escalation in banking crime and fraud via its ATMs to look at ways to tighten security. Because of its high levels of verification accuracy and hygienic and non-invasive application, the bank found palm vein technology to be more easily accepted by its customers.
A banking sector digitally transformed
Technology will see the banking sector digitally transform. Today, an incredible 95% of financial services leaders agreeing that tech is driving change in their organisation, and almost 9-in-10 (86%) are positive about this change.
While there is undoubted potential, organisations must look at how they can get their investments and technology partnerships right. Only by co-creating the right solutions for their organisation can banking leaders get closer to their customers, find new revenue streams, be more secure and more productive.