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Banking at the Dawn of a New Decade

By Nikos Karelos, Banking Director at Profile Software

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by Profile Software
| 23/04/2021 13:43:12

Digital transformation - from trend to necessity

During 2020, the pandemic accelerated Digital Transformation in Banking, leading banks to faster adopt new digital delivery models. The rise of neo and digital banking became the new normal with emphasis to be in mobile banking services.

Industry analysts predict the obvious for the effect of such changes to the banking domain: the pandemic will only help these new, digital trends become a reality faster.

We summarise below the trends that stand out as to what lies ahead in 2021 for banking.

AI’s major contribution to global economy
Adoption of Artificial Intelligence across many different operational areas in banking is constantly gaining ground. Financial institutions appear to be very active into engaging AI in a spectrum of services, ranging from Sales to Scoring and from end-user behaviour prediction to Fraud detection.

According to Business Insider for 2021 the banking disruption will focus on online/mobile banking, as well as on investment banking. At a time when a number of professionals has a greater disposable income to invest due to lock down, the rise of Robo-Advisors, Artificial Intelligence (AI) and Robotic Process Automation (RPA) infiltrate the money management space.

AI is expected to contribute a staggering $15.7 trillion to the global economy by 2030; 74% of organisations that implemented AI have increased sales of new products and services by at least 10%. One European bank, for example, started contacting customers proactively using predictive modelling and achieved 62% better sales results than with traditional campaigns (Source: WUP).

Optimisation of customer experience
Process automation with the use of RPA, digitalisation of opening and managing customer accounts, enhancement of mobile services (based on client habits) is to receive a greater investment by banking organisations in 2021. (Sources: MoneyThor and UX Design).

The target is that the customer shall never have to visit the branch. Mobile banking will evolve to an intuitive, multi-functional tool at the hands of the end user, enabling access to a full range of financial activities in a fresh, colourful and personalised way.

Open Banking as a Revenue Opportunity
According to Juniper Research, the number of open banking users is expected to double in size from 18 mn in 2019 to more than 40 mn users by 2021. (Source: The Financial Brand). According to Gartner, “The API economy is an enabler for turning a business or an organisation into a platform. Platforms multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services and social currency so that all participants are able to capture value.”

Introduction of Open Finance
With Open Banking unveiling its full potential and being implemented by numerous countries around the world, it is time for the broader financial section to take advantage of the same successful principles. Having moved to the next level, it is now the era of Open Finance as the extension of Open Banking data-sharing principles to enable third-party providers to access customers’ data across a broader range of financial sectors and products, including savings and investments.

Sustainable Finance
Financial institutions are looking to address investment opportunities and provide lending to low-carbon and sustainable sectors. As a result, more and more banks recognize the need to integrate environmental, social and governance (ESG) factors into their investment.

User Experience across the board
User experience in banking platforms becomes important. Investment in Digital Transformation is heavy, and it should span across back-office systems as well, and not focus solely on front end applications. The back-office user experience needs to be reconsidered and redesigned, transforming the comprehensive, data-driven and often complex interaction to a modern, gamified, friendly experience so that speed and ease of use are available to all users, leading to superior service provision. (Source: UX Design).

Move to Cloud technology
The extended use of new technology and digital offerings also increased the vulnerability of clients to online risks and fraudulent activities. Although slower than anticipated, there has been an increase in the use of cloud technology and cyber-security offerings, successfully restoring the sense of safety for both banks and consumers. The use of hybrid cloud infrastructures will escalate significantly in 2021, offering a safe and efficient way of banking.

Updated working models
Across the entire banking ecosystem, financial institutions are rethinking the way work is done, where it is done, and the skills that are required to do the job. What initially was remote collaboration necessitated by a global crisis has recently become the new normal in a post Covid-19 era.

Furthermore, implementation of new technologies, such as AI and RPA, that are applied in banking software allow bank officers to focus on more productive activities rather than carrying out complex operations on the back-office systems.

Banking-as-a-Service (BaaS)
As a result of the extended adoption of Open Banking, BaaS platforms enable fintechs and other third parties to connect with banks' systems via APIs to build banking offerings on top of the providers' regulated infrastructure. The launch of BaaS platforms helps banks benefit from fintechs entering the financial space, as it turns them into customers rather than just competitors.

The list could be endless in terms of technology objectives and banking improvements. FinTech Magazine also presents similar findings on trends these being personalisation, digitalisation, migrating threats and investing in security.

Key takeaways
User experience remains in the spotlight, both for customer and back-office users, with banking platforms evolving to accommodate modern and better design, incorporating use of AI tools to strengthen personalisation of banking offerings and enabling user access to the full range of banking activities. Furthermore, automation and streamlining of processes, combined with the adoption of cloud infrastructure, allow banks to experience continuous, uninterrupted, operations utilising human resources accordingly to increase their market share. Last, but not least, the successful implementation of Open Banking, apart from the apparent flexibility it provides, has created new opportunities and revenue streams for the Banks, as well as it has opened the path towards Open Finance, across the financial domain.

Profile’s banking platform allows traditional, neo and digital banks to achieve their business objectives through automation of tasks throughout the entire spectrum of operations. It is constantly being enriched with functionality and front-end features that offer a better, easier and more complete user experience while ensuring uninterrupted operations at any time.

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About Profile Software:
Founded in 1990, Profile Software ( is a specialised software solutions provider with offices in key financial centers and a presence in 45 countries across Europe, the Middle East, Asia, Africa and America delivering market-proven solutions to the Investment Management and Banking industries. Profile Software is recognised as an established and trusted partner by international industry-specific advisory firms. Profile Software’s solutions enable organisations to align their business and IT strategies, while providing the necessary business agility to proactively respond to the ever-changing market conditions.