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Digital transformation in the banking sector has encouraged the emergence of two new business models; contextual and conscious banking, according to Paolo Sironi, global research leader of banking and financial markets at IBM.
“Contextual banking means making the bank invisible inside an ecosystem,” said Sironi at this year’s Money Next’s Banking x Summit. “On the other side, is what I call conscious banking. This means the transformation of the bank as a platform that enable to return to the side banking perspective of services because you need to ask the clients to pay for services, not for products.”
“What I find interesting is the emergence of contextual banking, where some banks are orchestrating the right partnership and they understand that monetization will not be inside financial services but will be outside financial services, because when you play with open banking, and open finance and your value as a bank is to reduce the friction.”
“We’re right in the middle of the disruption cycle in finance at the moment,” said Homa Siddiqui, global head of digital transformation and products lab at Credit Suisse. “Incumbents are having to rethink business models and rethink delivery models.”
“Those four brick and mortar walls we were seeing are not as necessary anymore,” she added. “A lot of the underlying assumptions of what we thought was needed for service is being disrupted at a very accelerated pace.”
Success in customer experience comes down to having the right mindset, said Siddiqui.
“If the organisation has the mindset, the way the mindset is of these entrants, then you will achieve the same outcomes. But, if we have a mindset of protecting the franchise, doing an incremental shift to some lipstick on customer experience, but it’s not a true omni-channel experience, we’re going to have a different outcome.”
Ed Ackerman, director of alliances and partnerships at Onfido said more legacy and incumbent banks should be looking at incorporating omni-channel innovations to improve customer experience.
“Digital teams are often slung outside the core footprints of the bank’s infrastructure as a way of speeding up more quickly because speed is of the essence and without the ability to drive a new digital product you may lose out on customer. What we’re seeing is increasingly, they’ll do it outside of their existing – often legacy – platforms that are available.”
However, it’s about making sure that data is not siloed, and that you can reuse the data about the individual from one product to the next, he added.
“I think you’re seeing banks work out what are those journeys that are so important to not get wrong for customers and let’s make sure we have a really good happy path for those experiences.”
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