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Tackling the Obstacles Facing the Banking Industry

about 1 year ago by Luigi Muscat Filletti
Professionals walking in an office

Today’s fast-paced world is seeing individuals worldwide starting to adopt digital banking and payment services to seamlessly complete financial transactions and more, however such services are not necessarily being carried out through the services offered by their bank. In today’s digital age, banks are continuously working to overcome the challenges posed by Fintech companies who possess greater tech-based expertise and thus offer better digital financial solutions to their customers.

That being said, users tend to turn towards financial institutions who provide more diversity in their digital financial services and are able to process their users’ demands in a more efficient manner through digital innovation. Therefore, traditional banks are currently struggling to compete with such financial institutions who are offering cutting-edge services through more user-friendly and customer-centric approaches. Now is the prime time for banks to up their digital presence and adopt strategies which empower the user in their journey when making use of the bank’s online services.

Digital Growth for Relevance

Although remaining relevant is not enough for true success, it is essentially the first step. Banks are under threat from well established as well as new and upcoming Fintech companies, including new branches of the Fintech sector such as Regtech and Insurtech which is bringing technological impacts to the insurance industry. Relevance can therefore be achieved by investing in professionals who can lead an organisation to digital success.

Banks have been witnessing a digital disruption due to the rise of new technologies which are paving the way forward for multiple industries worldwide. The presence of Artificial Intelligence in Fintech enhances data collection and analysis, contributing to more defined approaches in marketing strategies and customer segmentation and relationship management. Big Data in Banking and Finance is also enhancing risk management and compliance, generating more banking and finance opportunities in Malta for organisations who adopt such technology in their operations. In addition, with Cryptocurrency’s Move to Malta, Blockchain technology is being introduced to local banks and financial institutions, meaning that discarding such advancements would lead to irrelevance in the market. Many banks are chasing their competitors by providing similar services, yet it is not enough just to follow suit. Change must be embraced and dealt with in an enthusiastic manner, looking towards disruption with the mindset to tackle all obstacles coming one’s way. Banks should take advantage of such digital innovation by recruiting talent in technology to help bolster their digital strategies and improve user experience.

With a variety of roles in technology, software development job opportunities are becoming more present within sectors of Finance, meaning that the battle for talent in technology is a growing concern for banks and financial institutions. The importance of the Software Developer in Fintech is the result of the race to digital success, as professionals in software development with expertise in various areas are being recruited to fulfil roles in AI and Blockchain Development, Web Development, Data Analytics, UX and UI Design as well as Cybersecurity. As the sectors of Finance and Technology continue to merge, more career opportunities in technology will be generated within the financial services, meaning that banks and financial institutions should keep their eyes wide open to recruit the best talent in these fields of technology.

Fast Follower or Innovator?

Following the top dogs in digital financial services may result in forming a great online banking and payment experience, yet that does not necessarily mean that by doing so a bank will gain higher relevance amongst its competitors. Fintech companies have disrupted traditional banking practices and instead have focused on delivering exceptional financial solutions to their users through processes which empower the user. The abilities to perform online banking, transfer money and complete loans have been complemented by services which provide the user with detailed financial advice, all within a simple-structured interface. This is something which traditional banks have failed to implement, and now find themselves in a situation wherein they are racing to compete.

The key to success perhaps lies in really understanding the user and addressing their financial demands and concerns, and going above and beyond to shape a platform through which they will be able to effortlessly perform and receive all their financial necessities. By listening to frequently asked questions and demands from customers, a bank can tailor their online financial services according to the user. Does a user want to open a new account? Does a user want to pay a bill or dispute a fee? Perhaps a user wishes to apply for a loan to buy their first home? Such scenarios should be treated as new opportunities to create a more defined online platform to satisfy a variety of user demands. It is important to listen to customers to gain more insight on what types of services should be offered. Such a strategy will allow a bank to differentiate themselves from their competitors and innovate in the market.

Enhanced Customer-Centric Strategies and CRM

Fintech companies have been positioning the user in the centre of their operations, providing them with valuable services at the tip of their fingertips. It is important to deliver an outstanding customer service to all users, and financial services are no different. In fact, it is more important now than ever before for banks and financial institutions to display a customer-centric approach in their services. Following what has been mentioned above, banks should focus on listening to what their customers demand, and figure out how to optimise their services to satisfy those demands. Raising the bar in the digital era requires skill, however it is also vital to follow-up on users and ensure that their experience is as smooth as possible. Artificial Intelligence is optimising CRM for companies in various industries, with Financial sectors also benefitting from advanced data analysis in real time to segment users and generate intelligent follow-ups.

To Conclude

Banks may have fallen behind during the last decade - with Blockchain-run Fintech companies innovating the financial services of the world and financial institutions offering more efficient means of carrying out online financial transactions, it may seem that traditional banks will eventually fade out. However, all is not lost, as the possibilities of rising to the occasion and providing customers with improved and tailor-made digital banking services has only begun, meaning that with the right strategies and approach, banks can overturn their faith and get back into the game, with their only real obstacle being that of time.