Weathering turbulence: Flexibility and speed key for banks

David Irecki June 14, 2023 10:38

The Asia Pacific region's financial services market is constantly changing as service providers look to outdo one another in terms of digital customer experience and satisfaction. This hyper-competitive race has led to a rise in the number of digital bank users in Hong Kong. According to Bain, local mobile banking penetration surpassed 70 percent in 2022, with more than 50 percent of consumers having conducted all their banking transactions online during the same period.

Traditional financial service institutions face the daunting task of staying relevant in the face of fluid consumer behaviour and digital-native competitors. While challenging, it is important for banks to have a deeper understanding of their customers' needs. This forms the foundation to leveling the playing field.

Trust, ease of user experience, and personalised offerings comprise the core of any relationship between a consumer and a financial services provider. Upholding these values while excelling in new digital channels is key to ensuring companies can thrive.

In this context, banks are sitting on a gold mine with the amount of data within their systems. If properly managed and utilised, financial institutions can provide value-add through tailored services and personalised offerings.

Data-Centric Strategy

While financial services have been toiling to keep up with a changing regulatory landscape, they should not lose sight of delivering offerings that increase customer value. Leveraging Big Data enables banks to refine workflows by providing a better picture of customer preferences and buying patterns. This in turn places financial services providers in a position to create customised digital products for existing and prospective customers.

To take advantage of this data-driven approach, financial service providers need modern tech stacks to integrate state-of-the-art methodologies and technologies. Institutions can then make their decisions based on the insightful and actionable analytics.

However, there are some challenges for businesses to overcome. While investments in data analytics are high within the industry, EY finds that only eight percent of financial service providers in the Asia Pacific region describe themselves as being truly 'data-centric', as opposed to merely working with data. This shows there is still much to be done when it comes to leveraging all available datasets and gaining deeper insights into their customers’ behavior.

Data As the Foundation for Generating Continuous Value

The concept of Customer Lifetime Value (CLTV) is well established among financial services executives. Customers' needs continually evolve and providers must meet them before their competitors do. However, continually responding to changing needs while maintaining swift response times and high customer satisfaction levels is another challenge altogether.

The first step is understanding that the foundation for generating continuous value through the speedy delivery of services is having an extensive view of an institution's customers. Businesses must then build an ecosystem that enables collaboration between departments, as well as seamless data-sharing throughout the organisation. This is vital when it comes to mapping complex customer processes operationally or analytically.

As part of this process, a review of a bank's technology stack is required. Process management and application integration should be prioritised alongside investments in modern CRM systems. Failure to do so may result in applications being unable to perform at optimal levels due to their disconnect from other parts of the business structure.

This is where an integration platform as a service (iPaaS) comes into play. By allowing companies to enable smoother integrations of the various teams within an organisation - as well as their different systems, applications, and data sources - data sharing becomes seamless, giving decision-makers a complete picture of their customers.

Integration Is the Key to Unlocking Data's Value

iPaaS services are key to ensuring interoperability between cloud applications and legacy environments, giving banks and other financial institutions the boost in flexibility needed to meet even the toughest challenges. Financial services providers can finally unify all their data through a cloud-native integration platform, enabling them to provide outstanding customer service, manage risks, and analyse profitability.

This is especially valuable across the Asia Pacific region where, according to EY, the financial services sector struggles with integrating systems and the migration of apps and data from legacy architecture. Banks and other institutions that can take the lead in leveraging iPaaS stand to gain a significant advantage over the competition by integrating old and new systems at a fraction of the time and cost.

With organisations optimising their business operations to achieve agility, Hong Kong's financial services industry can adapt to meet customers' needs at unprecedented speeds. With the added value this creates, providers in Hong Kong and the rest of the Asia Pacific can thrive by giving what consumers want every step of the way.

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David Irecki

Director of Solution Consulting for Asia Pacific & Japan (APJ) at Boomi