March 2018

Possibilities #Reimagined – More Things to Bank on

By 2021, 50% of banking users worldwide will use a smartphone, PC, smartwatch or a tablet to access financial services, a 53% increase from the current figures. In India alone, the number of online banking users is estimated to reach 150 million in 2020 from current 45 million.
Banking inconspicuously integrated the web and mobile channels to the brick and mortar ones, and today omni-channel banking is table stakes. In the future, with more and more connected devices, banking will be consumed on a variety of new channels and form factors. For example, progressive banks have already begun tapping into their digital customers through fitness apps that can monitor a user’s activity and translate fitness level into interest rates, or reward users when they hit a certain goal.
The hyper connected world of tomorrow will have machines transacting on behalf of humans, and not just humans consuming services directly. In 2018, progressive banks will prepare for this future with services designed to talk to smart machines at the consumption end, i.e. at households, customer premises or customer assets. For example, a consumer may authorize a smart refrigerator to order grocery and charge the credit card, or configure a smart car to pay for fuel.
Banks have a sizeable role to play in this connected future. The increase in channels that banking is consumed on directly translates into an increase in data sources, and banks will harness these data sources for new experiences. Take the example of an industrial scenario such as trade finance. An exporter of perishable goods need not worry about the inventory getting damaged due to weather or temperature. The exporter will have the necessary information and insights real-time to make a decision and take appropriate action.
Banks will need to make this journey through the three stages of the IoT information value chain, namely access, insights and action.

Access – Banks will need to ensure they are available for their customers at all times on the channel of their choice, which could be a smart car, a voice assistant or any connected device. Moreover, banks will need to ensure access to data from a bank’s leased equipment or a customer’s mobile phone, and data from external sources.
Insights – Next, banks will need to aggregate and analyze relevant business insight out of the massive amounts of IoT-generated data streams.
Action – These data and insights should also evoke action as appropriate. An example is an autonomous car simply locking itself in case the owner defaults loan payments.

But banks must bear in mind that security is of utmost importance in this connected future. In this future of ‘banking on things’ banks will have access to huge volumes of customer data. They must make security an architectural principle for development and integration of these services.
Read the full report here – #ReimagineBanking – 10 Strategic and Technology Trends to Watch Out for in 2018

Networks #Reimagined – Blockchain for Banking and Beyond

PwC’s 2017 Global Digital IQ Survey says that 9 percent of financial services firms are substantially invested in blockchain. Research from Infosys Finacle and LTP concludes that the industry expects commercial blockchain adoption between 2018 and 2020, while Accenture predicts mainstreaming by 2025.
Although the technology is in its nascent stage, in 2018 we expect banks and financial institutions to adopt blockchain in a variety of use cases given its promising prospects.
In 2017, we saw banks and financial institutions cultivating ecosystems and experimenting with the technology in a multitude of pilot projects. In 2018, a number of new ecosystems will emerge and the existing ecosystems will mature and become richly diverse. These ecosystems will go beyond bank-and-bank partnerships to large networks comprising financial and non-financial entities, such as suppliers, regulators, trade associations, entities that are closely associated with banks, such as clearing and settlement houses and brokerages, and shipping and logistics companies. An IDC study predicts that by 2020, 20 percent of trade finance globally will incorporate blockchain/distributed ledger technology. As ecosystems expand and more and more members are added to the networks, these ecosystems will be extended to a variety of new use cases. For example, an ecosystem such as Finacle Trade Connect, originally set up to carry trade finance transactions, documentary credit etc., could well support syndicated lending or sector-specific commercial banking services in the future.
The second key development will be the shift in regulatory approach towards blockchain. We are witnessing interest from quasi-regulatory entities such as IDRBT (Institute for Development & Research in Banking Technology) and Lanka Clear networks that we have helped establish. Globally, regulators from the Bank of England to the Monetary Authority of Singapore and the Hong Kong Monetary Authority, are evolving standards to help their banks join and benefit from these ecosystems.
While most of the action in the space so far was driven by large and progressive banks, in 2018, leaders, early adopters and fast followers alike will participate in blockchain ecosystems making them more scalable and diverse. And with the necessary push from regulators, blockchain is set to become serious business in 2018.
Read the full report here – #ReimagineBanking – 10 Strategic and Technology Trends to Watch Out for in 2018

Organization #Reimagined – Cultural Readiness fills the gap Between Business and Technology Readiness

2018 promises to be an exciting year. We’re particularly excited because we believe that we will begin to transcend the efficiency and experiential benefits of technology and see tangible benefits of technology in relationship creation and building.
In 2017, we stated that banks in the digital age would do well to transform their culture to one that is in total alignment with the customer. As we can see, organization transformation depends on the idea of embracing change, innovation, customer-centricity, and continuous learning. We believe that in 2018, organizations must embrace this culture of change, innovation, customer-centricity to sustain their businesses.
For a truly customer centric organization banks need to build multidisciplinary teams that cut across functional silos. Progressive banks are introducing programs to train their employees to view customer journeys, to enable them to see realities differently, and to help them connect the dots for creative solutions to deliver value to their customers as well as the end consumer.
To upskill and cross-skill their employees, banks are discarding the traditional class-room training programs in favor of unconventional ways. Axis Bank in India has launched Axis Bank Academies partnering with renowned institutes like INSEAD, CRISIL, ISOFE, encouraging its employees to identify areas of specialization that will help them become future ready as digital bankers. In 2018, banks will also look to train employees on relevant analytical skills to fill the gap between business and technology.
Banks have traditionally been known to avoid risks, but to keep up with the pace of innovation in the age of open APIs, platforms and ‘digital’, banks must move from a risk averse culture to one that values innovation and collaboration. At DBS, with hackathons to encourage greater collaboration with start-ups, digital skilling programs, and workshops for human centered design and agile methodology, the bank is building a culture to enable every employee to contribute to digital innovation without the fear of failure.
Lastly, in 2018 banks will revisit their KPIs to instill the new culture of learning, collaboration and innovation. With KPIs and rewards programs designed to cultivate the desired culture of customer centricity, innovation, change, collaboration, banks can successfully bridge the gap between technology and business readiness for the new world or re-imagined banking.
Read the full report here – #ReimagineBanking – 10 Strategic and Technology Trends to Watch Out for in 2018