The banking and financial services industry is going through a fast transformation with a rapidly changing regulatory environment and changes that are market-driven. The growing electrification in capital market and traditional channels displacement in banking and insurance add pressure to margins.
THE NORM IN BFSI
Now, mobile devices are increasingly becoming the norm in banking and financial services institution for showcasing presentations and product catalogues. Nevertheless, there is another benefit that could be derived from them, and that of learning and training. Different learning solutions could be developed, and keep in mind the needs of the learners and the strength of the mobile platform as well. The BFSI sector is an extremely dynamic and knowledge-intensive sector. In the last few years, new regulatory bodies, growing competition and a tremendous impact of information technology changed the way the industry does business. There is a growing demand for new services and products from businesses, customers and government as well, all of which brought significant changes in the structure and operations of BFSI organizations. In turn, this has made the need for impactful training extremely evident for the sector, something that now is imperative for sustained progress and growth.
FLEXIBILITY OF BFSI SOLUTIONS
A BFSI organization acquires the flexibility needed to keep up with evolving customer expectations, demand and demographics with software for the industry. BFSI solutions boost profit margins across all channels and could easily overcome challenges like stricter regulations, higher capital requirements and a shift in digital banking with an array of best-in-class bank technology and systems.
Solutions could be deployed on premise, on an array of hardware platforms or shared infrastructure, enabling one to keep the existing infrastructure move to a lower cost stack or need not worry on infrastructure at all. The systems are modular, enabling for progressive renovation, build and migrate strategies that dramatically lower risk and speed up time to value.
THE CHALLENGE IN THE BFSI INDUSTRY
The BFSI industry faces a notable challenge that it could no longer try to downplay, one that could be summed up in one word, and that is FinTech or Financial Technology. It is nothing new but in the past referred to a group of seemingly modest startups that offer limited online lending or retail payment services. In the fields of transferring money, online lending and credit ratings, financial technology companies break the biggest players’ dominance in the financial services in novel ways. Some financial technology organizations for instance are developing next-generation robo-advisors which define savings solutions on goals and risk appetite basis with no bias toward any particular product.
As of the present, most financial institutions responded to the challenge of financial technology in one of three methods. The first adopted a wait-and-see approach that conserve their resources until the emergence of the clear technology winners. They risk getting caught up unprepared when threat to their business grows more imminent. The second group acquired financial technology organizations to have access to new technologies. However, they often have trouble with integration. There are also companies that invest in considerable amount of money and time in fixing their own IT landscape, which typically is fragmented and complicated by legacy systems that are difficult to maintain, update and improve.
FOUR INNOVATIONS FOR BFSI
1. Bitcoin, the currency has undergone numerous boom and bust cycles, served by the Bitcoin exchanges, some which have succumbed recently to connected hacking attacks. The new wave of technology changes would propel it to be a widely used currency.
2. Business API or application programming interface. It has been used for many years by software developers for assembling program components within an app. The new use of APIs is to make available business functionalities as Internet components. The APIs use is to grow volumes from current customers and draw near customers without friction.
3. Social-media based, crowd-sourced identity system. In the present financial system, regulation impose banks and other financial institutions to conduct a KYC or Know Your Customer activities with the aim of confirming people’s identity.
4. Using the open source movement. One good example is Mozilla, which makes it possible to make a community of millions of developers who work on the same project based on meritocracy.
THE FINANCIAL SYSTEM PLATFORM
The financial system should be a platform which federates current players like banks, as well as new players such as other telecommunication organizations and IT companies that would:
1. Be safely and reliably accessible from connected devices, from smart phones, feature phones to other specialized devices.
2. Allow customers to own their accounts and operate them themselves or select freely who to contact in order to operate them.
3. Enable new clients to be seamlessly connected, with the use of crowd-sourced and flexible know-your-customer system.
4. Should be based on open APIs so that customers could choose how to combine the services freely on the platform in new ways that they prefer.
5. Should be based on open APIs, so new service providers, such as insurances, loans, payments and others could be easily connected and discovered.
Technology is controlling almost all aspects of life. Thus, when it comes to BFSI organizations, all the major stakeholders should be around the table to deploy the technology to work safely, reliably and openly.