April 13, 2020 | Dr. Ashima Chopra
Category: Banking, Digital Transformation
In light of current events, recent research has indicated that " ... more than half a trillion real-time payments transactions will be processed over the next five years... [the] project[ed] Compound Annual Growth Rate (CAGR) of 23.4% from 2019 to 2024." ( "Prime Time for Real-Time Payments" report from ACI Worldwide and Global Data, 01 April 2020).
Whilst no introduction is needed to the "Lockdown" faced by economies the world over in the current dire climate, the reality could be different. When the world and its economies grind to a halt, the reality of the limited necessity-based interactions needs to be rethought. Luckily, we do live in a digital age which, by and large, has now matured to include the financial realm. The idea of Fintech, Digital Payments, Open Banking (and emerging Regulatory Standards to protect us all as part of Digital Transformation of the Financial Sector) has been timely, to say the least. Where money can't exchange hands with limited access to cash (with "lockdowns" and cash considered an unsafe option in case of being a carrier to the virus), and the days of bartering relegated to the previous centuries, the transformation of Banking in its Digital form has truly come of age. Even those financial organizations that are not entirely "ditching" old means of doing business are, at the very least, transforming it.
"While brick and mortar outlets are giving way to digital services globally, a large proportion of organizations are changing their branch proposition. A recent survey by Finextra, in association with Virtusa, revealed that while 36% of Financial Institutions (FIs) are decreasing their branch network, an equal number are transforming it." ("Transforming Banking Channels for a Digital World", Finextra, 05 February 2020.)
What does this mean for traditional banks?
While the need for innovation and digitization of channels was a requirement well before the COVID-19 crisis, now more than ever banks need to take Digital Transformation seriously.
The COVID-19 lockdown has disrupted the way banks and financial institutions run their business, how customers engage with the banks as well as how they engage with their workers. Given the current situation, banks need to introduce and escalate digital transformation to keep themselves operational and remain relevant in these times. Banks have no choice but to realign their legacy systems and technology to meet current demands, or go under.
Fiorano is uniquely positioned to enable the above urgently required digital transformations. The new competitive landscape requires Banking infrastructure to be cloud-ready, agile, adaptable while supporting rapid design and development of new products and services. Speed and scalability are required so as to allow traditional banks to leverage the best of AI, automation and edge-computing.