As ongoing technological innovation continues to disrupt traditional business models across various industry sectors, this is perhaps having the most profound impact within the financial services sector.
Here the rapidly changing competitive landscape is already having an impact on the profitability and returns of traditional market participants in the banking sector, as Fintech companies and “over-the-top” or non-traditional banking participants continue to bring more innovative, efficient, and cost-effective solutions to specific market segments.
Now more than ever it is essential for players within the banking sector to remain sustainable and respond to these challenges by becoming more strategically focused and technologically advanced.
Leveraging technology to keep abreast of global trends
“South Africa’s Banking Vision 2030: A tale of two realities”, a whitepaper produced by BCX in association with Frost and Sullivan, highlights the fact that prominent global trends – customer centricity, digitalization, reduction in physical footprint, virtualisation of customer channels and data security – are relevant and already having an impact in the South African context.
When it comes to customer-centricity, banks have moved away from product-centric practices to adopt a more holistic and long-term view of each customer’s evolving life-cycle needs.
Through leveraging data and analytics to strengthen customer insights, banks are now able to provide customised products and services supported by enhanced customer engagement through an overarching omni-channel strategy.
Unsurprisingly, this is another key trend where banks are implementing emerging technologies to improve or replace legacy systems and enhance and streamline front and back-office operational efficiencies.
On the front end, banks are automating basic communication and advisory functions through chatbots, using technologies such as Artificial Intelligence (AI). Back-office operations are being automated using Robotic Process Automation (RPA) technologies. The digitalisation roadmap is further supported by capabilities such as Cloud, data analytics, and the Internet of Things (IoT).
Reduced physical footprint
Fintech and digital competitors have entered the banking value chain, and do not have any of the costs associated with maintaining a physical infrastructure. So, in order o remain competitive, traditional banks are reducing their physical footprint, which also means increasing their digital footprint.
Collaboration between banks, to further drive costs out of their operating models, could be on the horizon. Examples of this include sharing branch and ATM infrastructures, and non-differentiating back-office systems. Banks are also virtualising their channels to market, moving from physical to virtual channels such as chatbots and virtual assistants.
As digital banking expands, banks are increasingly exposed to data breaches that could lead to customer data loss, data manipulation, financial losses and loss of customer confidence. The vast amount of customer data and financial assets handled by banks makes them natural targets. Naturally, cybersecurity is top of mind for both banks and regulators to secure, detect, and respond to cyber-attacks.
A future-proof business model requires a right-fit technology partner
To ensure long-term relevance, these key trends mean that traditional banks are having to prioritise ways to accelerate modernisation, automation, and transformation, by partnering with technology providers that can assist with driving innovation and the development of cutting-edge solutions that leverage data, advanced analytics, and digital technologies.
As a leading Information and Communications Technology (ICT) solutions provider to the financial services sector, BCX understands that the boundaries between telecommunications, media, technology, Internet, and Information Technology (IT) are becoming increasingly blurred.
To effectively future-proofing banking business models requires the incorporation of digital technologies to ensure there is a focused approach towards driving operational efficiencies (and therefore business excellence) in delivering greater customer experiences.
In line with the goal of reinventing the customer experience for its clients, BCX has adopted the next generation digital operating model and has prioritised investment in serveral new solutions including:
> Software Define Wide Area Networks (SD-WAN)
> Converged connectivity and communication
> Extensive Managed Services
> Mainframe as a Service
> Cloud enablement and advisory services comprising readiness assessment, design, application transformation, planning, transitioning, management, and operations
> Artificial Intelligence (AI)
> Robotic Process Automation (RPA)
> The Internet of Things (IoT)
> Big Data and Analytics
> Cyber security
> Packaged applications
Although the South African banking industry is by no means facing catastrophic failure, South African retail banks are under enormous pressure to reduce costs and innovate, to remain competitive.
BCX recognises that our success will be measured on how well our solutions meet our customers’ needs and help them to solve their current and future challenges.
So, while technology may change, one thing remains the same. We’ll put your business right where your customers are. Because at BCX our most important customer, is yours.
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