By Anjna Bhati, Director Data Analytics and AI, BluePi
Significant number of financial institutions are successfully weathering the storm caused by the Covid-19 pandemic, as they forward march towards the next-normal. At the outset, they are quickly replacing legacy systems that operate in silos with new age digital technologies to support the online business models. We all agree, as new operating models emerge and customer expectations evolve, it is necessary for the financial services sector to build technological capabilities to function efficiently in the new reality.
Furthermore, with digital transformation and innovation at the core, few key areas can bring about a big difference in the way the Banking, Financial Services and Insurance industry (BFSI), delivers its services.
The much-needed App Modernisation
The product teams at Financial Institutions can study customer engagement on mobile banking applications and work on aspects that have high business advantage and explore modernising them. This way, clarity in business requirement can also be accomplished. However, it is imperative for regulatory facets regarding banking services, financial frauds and data protection. to be factored in, while modernising applications. Most importantly, cybersecurity aspect has to be introduced right at the outset to ensure the respective financial product is both secure and stable.
Furthermore, app modernisation is one of the key elements in the migration to cloud or cloud-native architecture, which delivers scalability, accessibility and cost advantage. DevOps function should also be considered as an important part during the building and running stages of the app.
App modernisation leads to longer customer engagement and valuable customer experience, providing the much-needed competitive edge to the financial institution.
Leveraging Microservices Architecture
Banks and other financial service providers are now able to carry out transactions online, generate invoices, accept payments, secure signatures and many other related functions with ease. Thanks to the digital transformation which is catching up fast in the sector. However, at the same time, even a slight glitch in any of the digital services can regrettably lead to customer churn. Organisations, therefore have to ensure high availability and performance of the digital systems and consistently develop new apps and solutions for enhancing customer experience to remain competitive. One can rely on the microservices architecture to deliver these advantages where monolithic applications are converted to self-contained services that can be scaled independently without impacting the entire system.
With the microservices model, the DevOps team can build apps in the form of services, where each of them is independent of the other. Different team members can leverage various technology stacks to develop different modules, customise them and upgrade as and when required while applying best DevOps practices throughout the entire process. App modernisation can also be done for a single application function at any given time, without disrupting the entire application stack, by leveraging containers.
Besides ensuring employee efficiency, this can reduce maintenance cost of the infrastructure, provide the agility in development, deliver faster go-to-market, in addition to being resilient. Microservice-based digital banking solutions are no-doubt gaining traction with the support of both business and IT executives at the helm.
Key role of big data and data science
Big data or huge volumes of data tapped from web browsing, social media platforms, e-commerce websites, smart phones and banking apps among other sources are in, structured, unstructured and semi-structured formats. This data is of little use if it is not mined and converted to gain actionable insights. The information instead of just lying there can be leveraged to address the common complaint of customers who, as per recent studies, increasingly feel they are not fully understood by their banks and financial institutions. Studying the customer’s evolving requirements and interests will provide the ingredients for organisations to formulate retention strategies and offer personalised services, besides attracting new customers.
Furthermore, customer segmentation can be achieved for better targeting of marketing campaigns and tailor-made offerings. Feedbacks can be effectively analysed and responded to. Possibilities of upselling and cross-selling will enable banks to increase their profit share.
Unauthorised transactions and frauds, some of the top challenges faced by financial organisations can be easily addressed with big data analytics. By observing spending patterns and history of financial transactions of customers, banks can identify unusual transactions and work at proactively eliminating frauds that will enhance security further. On the other hand, risks also can be minimised with early detection of activities, such as loans that cannot be recovered or an investment with no yields, by suspending lends. Most of these technological processes can be automated for optimising costs and other resources.
New-age technologies and tools acting as the frontiers of innovation, are set to drive the change and bring in measurable growth across the BFSI sector. As we take rapid strides in the evolving digital era, we are certain to embrace more technological advancements on the way that will re-shape the sector to drive operational efficiency to deliver better customer experience
