Competing in the cloud has never been more important for traditional banks in the face of new digital competition

As digitally-focused challenger banks continue to emerge, it’s clear that more traditional institutions are having to take a fresh look at their technological infrastructure if they are to begin competing on an equal footing, never mind taking a lead.

[easy-tweet tweet=”Digitally-focussed #banks are challenging and disrupting the legacy #financial model ” user=”stevenicsbbox” hashtags=”fintech”]

In order to stave off the increasingly sophisticated threat of the likes of Atom, Mondo, Monese and Starling, the more established retail banking leaders have to start taking a leaf out of their book by rejecting legacy models and making a leap into brave new territory.

Effective, secure and fast mobile banking matched by joined-up service design is proving to be a major disruptor as we continue to see a decline in physical branches and a move towards a fully digital service.

More and more, the bank is becoming a virtual concept rather than a high street or call centre entity – though many still want the peace-of-mind that accompanies talking directly to experienced banking staff.   

More and more, the bank is becoming a virtual concept rather than a high street or call centre entity

The picture is not looking good for the traditional retail institutions with significant underinvestment currently the norm; indeed it’s thought that digital latecomers could see up to 35 per cent of net profit eroded, while those maximising its benefits may realise a profit of 40 per cent or more (McKinsey & Company, 2015).

Essentially, those that are failing to make a meaningful transition are only putting off the inevitable that is required to protect against the risk of revenue loss – the real type of investment that could create a differentiated customer experience featuring truly innovative digital applications.

Regular bad press and sustained pressure from financial services regulators tells us that the old guard is now facing a crossroads; adapt and invest now, or cling to outdated core systems that could eventually prove catastrophic. The latter course risks a situation where banks fade along with their older client base.

Clearly, we’re all going increasingly mobile – we expect to now do everything with immediacy on our smartphone from any remote location – and traditional banks must reflect and offer this agility if they are to keep our cash and custom. In other words, digital banking is the key battle ground, and the new kids on the block are often doing it better, while simultaneously avoiding traditional pain points in the customer experience.

[easy-tweet tweet=”Traditional banks must offer agility if they are to keep our cash and custom” user=”comparethecloud” hashtags=”fintech”]

Nevertheless, while increasing digitisation might mean cost savings, it’s also often accompanied by the double-edged sword of less customer engagement. Analysis suggests that it’s a delicate balancing act, with lack of engagement easily triggered by a less-than-preferred channel, giving rise to a situation where the customer could walk away.

In that sense then, the challenge is on to bridge the gap and ‘humanise’ the digital banking experience; to provide some of the comforts of the physical branch alongside the agility of the virtual bank. Either way, it’s clear that innovation in itself is not enough. Digital convenience must be matched by engaging customer service at every step of the process.

[easy-tweet tweet=”The challenge is on to bridge the gap and humanise the #digital banking experience” user=”comparethecloud” hashtags=”fintech”]

The cloud represents a compelling answer. Through cloud migration and targeted, determined action, banks can handle big data, centralise everything for speedier transitions and realise cost reductions, while still meeting high customer expectations. The ability to add new business functionality quickly is another major asset, while cloud providers’ increasing drive to heighten security and meet compliance demands is making the cloud a natural choice for financial institutions.

However, the ability to maintain service in all circumstances could be the real differentiator. Moving to a cloud solution that is designed to provide a high level of resilience is hugely attractive to the banking sector, and that is where it can excel.

Legacy systems can also work in harmony with the cloud

Legacy systems can also work in harmony with the cloud, so the move from old to new doesn’t have to be so dramatic and daunting.

As a strategic platform for financial institutions looking to improve their services, the cloud is difficult to rival; in fact, it’s more a case of when, rather than if, banks will migrate their systems. Just how easy they want to make it on themselves though could be the real long-term question.

+ posts

Meet Stella


Related articles

How to add AI to your cybersecurity toolkit 

A successful implementation of AI in cyber defense requires a solid data governance system, reimagined incident response frameworks, sufficient talent and expertise to manage the new system, and established documentation practices.

The Metaverse: Virtually a reality?

Metaverses have the potential to enable virtual worlds to expand beyond the gaming genre to encompass all manner of social and commercial activities.

Cybersecurity and Cloud: A Look Back at 2022 and What to Expect in 2023

Businesses are continuously reassessing their resources and options to fill their tech stack. In this competitive digital landscape, the innovative use of technology will be something that would generate a competitive advantage for organisations.

Shopping for Data: Ensuring a seamless user experience 

This combination can drive a business’s data culture and provide a structured approach for businesses to benefit from data intelligence across their operations, with only a few clicks.

Unveiling the Top 10 Cybersecurity Threats to Watch Out for in 2023

As technology advances, so do cybercriminals' methods to gain unauthorised access to sensitive information. With the increasing reliance on technology in both personal and professional settings, it is crucial to stay informed about the top cybersecurity threats to watch out for in 2023.


Comments are closed.

Subscribe to our Newsletter