Removing legacy technology and processes & capitalizing on rich transactional data are key imperatives to success through the digital revolution
Temenos (SIX: TEMN), the market-leading provider of mission-critical solutions to the financial services industry, today launched its latest report “Succeeding through the digital revolution – lessons from banking industry disruptors” at the Temenos Community Forum (TCF) 2014.
In line with the theme of TCF, the report focuses on how digitization is changing the dynamics of the banking industry, and how institutions must adapt in order to thrive in this new industry context. The report highlights how digitization is bringing about change, with cloud computing lowering the cost of doing business; improvements in mobile technology rendering banking far more accessible; big data making it possible for firms to draw major insights into customers’ lives; and, social media providing the opportunity to inject a social context into banking services.
Ben Robinson, Chief Marketing / Strategy Officer, Temenos, said: “Digitization is fundamentally changing the dynamics of the banking industry. It is simultaneously giving more power to customers while opening up the industry to new non-traditional competitors. For this report, we interviewed eleven industry disruptors, who are capitalizing on digitization to launch new innovative business models. These firms included Lenddo, which uses social media to inform its credit scoring; a social investment network, eToro, which functions as a social community where users can see the portfolios of all other traders and copy the best-performing ones; Traxpay, a cloud-based B2B payment provider that offers secure, flexible, real-time, 24/7/365 electronic payments, and Simple, which prides itself on its transparency, offering basic tools to its customers, along with some easy-to-understand money managing software.”
Interviews with several new entrants to the industry, demonstrates how they are exploiting digitization to launch disruptive new business models. The report concludes with a set of imperatives that traditional banks need to address if they are to succeed in this digital revolution and withstand the threat from new entrants.
The report demonstrates that banks have the potential to succeed in the digital age, thanks to their existing assets, such as large customer bases, access to rich transactional data and the ability to offer integrated financial services. However, they must find a way to increase the benefits from these assets if they are to remain competitive. In particular, they should concentrate on ridding themselves of legacy (technology and processes), on developing a balanced multichannel delivery model, on deepening their data analysis capabilities and, lastly, on playing a greater role in their customers’ lives.