• January
  • 2021

Cloud-native Technology: You Can Bank On It!

Using technology to address the challenges of banks is a top priority. In their report, Retail Banking 2020: Evolution or Revolution?, PwC identified six challenges.

These included developing a customer-centric business model, optimising distribution, simplifying the business and operating model, obtaining an information advantage, enabling innovation, and the capabilities required to foster it, and lastly,  proactively managing risk, regulations and capital.

Let’s look at one area of banking: customer journeys in retail (and private) banking. This is an arena where all six challenges can be observed and addressed.  Many customers have multiple relationships with their bank, but these are distributed over different platforms and devices. A customer may go to a website to look at bank accounts, another for their mortgage, an app for investments and a portal for an automotive or business loan. However, there is no tool in which the customer can see his or her total net worth. The disjointed way customers experience their banking journey reflects the legacy systems upon which banks were developed. 

Customer Centricity

Creating a joined-up, customer-centric business model and optimising distribution with a new customer interface would be beneficial. A simple app with a balance sheet simulator and an economic scenario generator would be user-friendly for customers and seamless for a bank to integrate into its existing technology ecosystem. Equally, it allows banks to collect valuable customer data, that can be used to develop new products. In the PwC study, 54% of respondents indicated that enhancing customer data collection was a key priority. Consider Kidbrooke’s OutRank API, fast, scalable and affordable technology used by Skandia Life, one of Sweden’s largest insurance companies. 

Distribution

Acquiring new customers or retaining existing customers can be achieved with lifecycle marketing, by communicating to people according to where they are in the stage of their lives. Offering a simple tool to customers is one way to entice them to use a banking platform; the data collected can be analysed with predictive analytics to indicate what products might be appropriate for their risk and reward profiles. The PwC study found that bank executives were concerned about the decline of people visiting branches and the substitution of online for physical interactions.  With OutRank, you’ll find it easy to make your offering user-friendly and easily adoptable by customers. Extensive user testing conducted together with our partners has enabled us to create a product that suits customers with no financial planning software experience.

Simplify the Model

Simplifying the business and operating model and obtaining an information advantage would be on most COOs and CIOs' strategic agenda. Most banks are committed to adopting the cloud, with varying degrees of success. Cloud migration and digital transformation projects often get stalled due to complexity, cost and moving the goalposts. Yet 69% of those surveyed by PwC believe that simplification will improve service, and 55% think it will lead to increased profitability. For data analytics, creating new capabilities in this area was a priority for 57% of respondents. 

How can bank executives who are committed to change actually get things done? Rather than managing a large scale migration project, implementing a safe, scalable plug-and-play addition of a cloud-native API may be the best way to proceed. With Kidbrooke’s OutRank API, you can achieve the “wow factor” of rapid new product development without the risk of a disruptive change programme. 

Information Advantage

Using an API reduces time-to-market while introducing a comprehensive way of modelling different use cases for financial decision support. A balance sheet simulator that offers support for both assets and liabilities can serve as an aggregator of customer information in a coherent and concise manner. In the case of Kidbrooke’s OutRank, we offer an efficient way for banks to present a variety of scenarios, including savings, credit advice, pension planning, financial planning and liquidity forecasting direct to customers.

Innovation

Enabling innovation and reducing risk are factors driving performance. While 97% of CEOs think innovation is a priority for growth, only 10% view their companies as leaders, while 55% view nontraditional players as threats. Banks will have to move beyond the proof-of-concept stage to fully embrace data analytics and AI. The challenge is to combine building capabilities with buying them. Supporting innovation involves funding R&D in a bank and can involve partnerships with other companies.  Investing in new technology that enables better customer interfaces and understanding of customer needs is important. With Kidbrooke, you will have a partner keen to work together with your teams and innovate faster.

Mitigating Risk

Changing rules around risk, regulatory standards and capital are also areas of concern for banks. Selecting a trusted partner with a stateless operating system, in which all data is kept at the customer, is advisable. Being confident that a technology partner can pass muster with your Vendor Risk Management, Legal, Compliance and Audit teams will put their minds at ease during the procurement-to-contract process. At Kidbrooke, we have extensive experience in meeting cybersecurity, data privacy, GDPR and other regulatory requirements across Europe. Our OutRank product is secure, stable and resilient: a high-value, low-risk option for banks. 

Tying it all together

Many bank CEOs including J.P. Morgan’s Jamie Dimon have said they are worried about FinTechs, as these competitors are quick, agile and customer-centric. Yet these attributes, of speed, agility and customer-centricity, are precisely what banks aspire to be. Using technology in the right way enables banks to balance automation with the human touch, thereby keeping the customer at the forefront of business strategy. At Kidbrooke, we place our customer’s customer at the heart of what we do, to create a product with a functionality that is concise, crystal-clear and compelling.

Get in touch today:  kidbrooke.com

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References:

https://www.pwc.com/gx/en/banking-capital-markets/banking-2020/assets/pwc-retail-banking-2020-evolution-or-revolution.pdf

https://www.finextra.com/newsarticle/37293/dimon-scared-shitless-by-fintechs-calls-out-plaid

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