When you’re a fin-tech with tier one to tier four bank customers across the globe, you have a great vantage point to see how quickly technology is being adopted in different regions.
And there is plenty of variation, Sue Hutchison has discovered.
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That has sent many older banks on a 10-15 year process of replacing giant, complex systems, Ms. Hutchison added. Many opt to change smaller chunks while keeping core functionality intact. By the time they make discernible progress the technology and possibly the staff have changed, leaving current personnel to question the purpose.
Many end up partnering with fin-techs to incorporate software additions so they do not have to develop end-to-end solutions. It’s quicker to market and the bank receives software updates once available.
And that 25 percent of North American institutions not considering a switch? Ms. Hutchison said some are smaller ones who believe their existing systems suffice. Others have privacy and security concerns. Rapid change and uncertainty about the SaaS model are other factors.
Many of the holdouts are more comfortable with cloud-based solutions than their think as they do not realize Salesforce is one, Ms. Hutchison offered.
Another emerging trend is a move away from a singular focus on mobile functionality to multi-device connectivity, Ms. Hutchison said.
“The bank mobile app experience is different than they web banking app, which is different from the call center experience which is different from the walk-in one. Many talked about the omnichannel experience for a decade but I am not sure if they ever got there.
“People want to bank whenever they want wherever they want. Web, tablet and mobile channels are being made more consistent rate than separate channel restricted by real estate.”
While the front end experiences may look consistent, it could be the same old story in the back end where data provided through a twenty-first century experience is entered into technology that is so 1900’s.
The key is technology integration so partners can talk to each other, Ms. Hutchison said. If you’re working with Kabbage for example, the best experience is realized if both core systems can safely transmit data back and forth.
Another key development to watch is PSD2, the revised Payment Services Directive passed by the European Union in 2015. Its goals included the standardization, integration and improvement of payment efficiency, enhanced consumer protection, cost reduction, promotion of innovation, clarification on new technologies, the incorporation of new services under the regulation and the attraction of new competition.
Retailers can now ask shoppers to directly share their bank information, bypassing the bank and possibly several intermediaries. Banks will lose revenue, and spend significant sums on compliance. New players will get access (with permission) to personal data, enabling various cross-selling opportunities.
All happening while many legacy players struggle to keep up with the nimbler technological upstarts
“It will be quite stunning for banks to open their standards,” Ms. Hutchison said. “But it’s an absolute necessity because it does allow for the partnerships and integration needed for total solutions.”
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