Under the light of recent development, it is also easy to understand why banks are reluctant to invest in large-scale modernizations. As both economic and political landscape keep evolving in an unexpected manner, the modular path is the one that most likely leads to long-term success.
On the other hand, the pandemic has increased expectation level customers and users have for digital services. The pressure to modernize outdated systems is enormous – then again, pressure is where true diamonds are created.
Bank systems also must be agile enough to accommodate regulatory compliance while driving efficient business dev-ops. Well-oiled compliance processes can create competitive advantage for the bank.
“Deep down, this is a good time to evaluate the level of digitalization within the finance sector”, says Arto Sorvoja, Senior Partner of Samlink, part of Kyndryl. “Global funds are in virtual streams as transactions and interaction to both customers and other banks are being carried out online. A well-functioning IT forms the basis of success for modern banking.”
Harnessing technology for the right things
In knowledge-intense work such as banking, automation and AI should be utilized to handle mundane, routine tasks, thus enabling people to do what people do best: think, imagine, use their intuition to foresee, analyze and interpret upcoming changes in the operating environment, customer needs, and trends, and so on. To add value to the overall experience and benefit the customers.
“The importance of the digital workplace has surged while outdated systems with clunky user experience put top experts off their jobs”, Sorvoja states. “In the new banking world, the time of experts must be directed to understanding customer needs – rather than operating vintage user interface.”
With justifiable and consistent small steps in developing the operating IT system, more value can be delivered, and profitable growth sustained. At the very best, this development takes place in close collaboration between the solution provider, bank, and the bank’s customers.
Progressive, low-risk modernization is the winning formula
All in all, a significant crisis is an excellent opportunity to take decisive steps to stand out from the rest.
“It’s a careful balance that boils down to cost-to-income ratio”, Sorvoja explains. “Under these circumstances, the best choice is to allocate resources in the areas that return the investment fast, in the short and mid-term.”
Many leading banks are driving decisive transformation programs, focusing on digitalization initiatives aimed at automating processes and improving customer experience. The overall objective is to secure profitability – the initiatives are expected to break even in a 3-to-5-year timeframe.
“In taking banks’ digital systems to the next level, taking low-risk steps is the right approach”, Sorvoja concludes. “The goal should be a true transformation of processes and a better overall digital environment.”