Digital Banking: Market shifts towards AI, cloud and secure banking

By
ITVibes
-
Image courtesy: Paul Fielder | Unsplash

Highlights

  • Banks under pressure to deliver exceptional customer service across all digital channels
  • Market moving towards cloud-based platforms with qualitative differentiation of services
  • Demand for elements of AI in banking solutions
  • The digital channel platform market has been shifting from channel-specific solutions toward single omnichannel, digital-first platforms.
  • Thanks to open APIs, smart digital banking platforms will increasingly help banks connect with fintech for superior customer experiences

Excellent customer experience on digital channels is becoming a differentiator for the banks, says Ovum in its Decision Matrix: Selecting a Banking Platform. So a bank’s choice of digital banking platform will have a significant impact on its competitive capability for the next five to ten years.

In the background of banks searching for greater client insights while reducing costs, Digital Banking platforms sales are expected to grow as banks replace outdated systems, adapt to new regulations while addressing client expectations.

 Also read: Westpac blames compliances troubles on technology failings and human error

Market Leaders

Backbase, Temenos and Oracle have been rated market leaders by Ovum. Backbase continues to occupy the market leadership position. The Ovum Decision Matrix lists Backbase as the Ultimate Digital Banking Platform Market Leader.

In 2014, Backbase was rated a market leader for the Ovum Decision Matrix for Digital Banking Platforms where Backbase scored exceptionally highly, on market impact, business functionality, and product execution.

Hyper-personalization at scale through mobile experiences is also key as the fight to be a super app intensifies

Counting Barclays, Citibank, Lloyds Banking Group, Societe Generale and Westpac as clients, the digital banking leader was rated as the most visionary in the Visionary quadrant of Gartner’s Magic Quadrant for horizontal portals and as a leader on Forrester Wave.

Quoting the Backbase and IDC report on Fintech and Digital Banking 2025, Backbase informed ITVibes: “There are significant opportunities for banks in the ANZ region. We can expect 80% of banking assets in Australia to still be dominated by the Big 4 by 2025.

Small and mid-tier banks will be challenged by a combination of legacy systems, lack of digital talent, and lack of experience in executing large-scale digital transformation. 35% of IT budgets among Tier 1 and Tier 2 banks will be spent on ― new technologies such as AI and machine learning.”

Banks must create memorable and composable omni-channel capabilities that are smartphone-friendly, but can easily be used across other customer touchpoints including online banking, or even face-to-face channels.

Backbase

Backbase recently announced a strategic partnership with Berlin-based cloud banking platform Mambu to jointly deliver an end-to-end integrated SaaS banking solution. Backbase revealed they have been working separately with a number of banks in Australia and New Zealand.

Also read: ANZ Bank says Data is central to our decision-making

In an industry disrupted by Fintech and Big Tech, the established players are not having it easy. While the big banks enjoy billions of dollars of deposits, the nimble and agile neobanks are challenging the stronghold of the big banks while Big Tech is spreading tentacles across the industry.

Australia’s big banks have responded with adding new and attractive features to retain the customer base.

National Australia Bank launched a range of digital support features aimed at improving customer experience, trying to reduce friction points.

NAB’s customer experience measures include the launch of Whatsapp and iMessage support channels, VoiceID biometrics-based biometric authentication among others. Recently, NAB also offered a digital way to restrict gambling transactions.

Also read: ANZ Group promotes Emma Gray as Group Executive, Data & Automation

Confident open banking would open up new opportunities and benefit the customers, Backbase said: “We expect to commence discussions with more local banks given customers’ growing expectations from their banks and the coming increase in digital competition enabled by open banking”.

Also read:

RELATED ARTICLESMORE FROM AUTHOR