Banking is in dire need of transformation. Some banks get it, others are destined to be left behind. For innovation in banking, look to challengers like Apple with its new Apple Card and “neobanks” like Monzo. Although the threats are real, “traditional” and “large” banks are *not* sitting ducks.
Everest Group has developed a report, “Handbook on Building SUPER Banking Experiences: Case Study and Examples from 40 Global Banks.” The report is based on an analysis of the investments made by 40 of the world’s largest banks and more than 430 use cases in creating superior customer experiences, and it confirms there’s hope for incumbents to thrive amid digital disruption.
Finance TnT Executive Editor Loren Moss was able to speak with Everest Group’s Ronak Doshi to understand the reports origins and what the research findings mean for both FinTech disruptors…and the potentially disrupted.
Finance TnT: Why did Everest Group see a need for such a report?
Doshi: Banking is increasingly being embedded in customer activities vis-à-vis being an enabler. This transition is morphing the role of banks to become a lifestyle experience orchestrator. Banks are competing on the experience quotient with not just FinTechs but the wider ecosystem of BigTechs as well. This report was created to analyze the experience-focused initiatives by the 40 large banks to create a guidebook for banks undergoing their experience transformation and to provide best-in class examples.
Finance TnT: What are the primary threats and changes that threaten banks resistant to Digital Transformation?
Doshi: The threat is t that he war for talent is the single largest challenge for banks in their digital transformation journey. The change that threatens banks is the low focus on change management and process reimagination/redesign of processes (leading to lower realization of value from digital initiatives).
Finance TnT: How much of an impact are Fintech disintermediators having on banks?
Doshi: FinTech disintermediators are trying to remove the friction in customer experiences when there is a hand-off between different financial services enterprises (e.g., correspondent banking, trade finance, international payments, and others). Banks are now more open to consortiums and open data sharing standards to remove these friction elements and work with ecosystem partners (FinTechs, other banks, BigTechs, and other ecosystem players).
Finance TnT: The report focuses on consumer banking relationships. How is digital transformation affecting the relationships between banks and commercial and corporate clients?
Doshi: The need for hyper-personalization and self-service enabled through digital self-service platforms and robo-advisors (virtual agents/advisors) are the top two experience-focused investments areas in the space of commercial banking. Also, banks are looking to ingest unstructured data from their corporate client’s ERP systems to provide contextualized banking services.