Despite the recent turmoil in the Banking industry, there are some fundamental forward-looking changes that are happening to the Banking, Cards, Payment, and Financial services industry. We recently spoke to the Head of Banking & Financial Services at Coforge Business Process Solutions, Sumit Sood, to get some insights. Sumit has 22+ years of experience in the Banking domain and has led roles in Retail Operations, Payments, Product & Process Governance, Risk Management, Credit Control, and more. Coforge BPS has been servicing the Banking, Mortgage & financial services process transformation for over 20+ years, and drives Business Process Excellence through a digital-first approach, and deep domain expertise, led by experienced consultative practitioners.
Here are some excerpts from the conversation, which we will present in a short series. Here is the first edition. Comments have been edited, and summarized for easier reading.
Q1. What are some of the key emerging trends and areas of opportunity? How do you see areas such as analytics, automation, and Cognitive Intelligence shaping up in the market?
This is an interesting time for the financial services industry in general, as several macroeconomic, regulatory, and technological changes are resulting in interesting trends when it comes to servicing end customers.
a. Customer Experience will be the key: I feel that Customer Service with the need for hyper-personalization and options to provide more frictionless self-serve options will continue to grow. This not only requires multiple technologies, functions and services to converge, but also a cultural shift to provide digitized servicing ecosystem for the customers.
b. Digital Everything Acceleration:
- Growth of digital currency influence will remain strong and will impact the Transaction Banking ecosystem forcing banks to adapt & innovate
- E-commerce led BNPL (Buy Now Pay Later) trend will further intensify especially fueled by a recessionary environment and credit-savvy demographic
- With increasing online transactions and growth in digital currencies, there is a heightened need to prevent online fraud and hence Digital Identity, Risk Mitigation and (Proactive) Fraud Control will emerge as heightened focus areas
- Digital risk management will supplement traditional KYC / AML requirements. With this way of risk management becoming more mainstream, traditional ways of onboarding customers will likely give way to an “on the fly” onboarding experience
c. We will see lending acceleration especially around unsecured credit
- Recessionary forces will lead to higher demand for debt (Personal, Credit Cards Overdrafts, etc.)
- Creative payment solutions will further accelerate (profile-based loan extensions, transactions financing through offerings like Plan It by American Express)
d. Risk Management will become a high priority, especially in backdrop of recent Banking events
- Banks will find it more relevant to modernize risk management practices using predictive, behavioral, and advanced analytics.
- Finding new ways to monitor transactions like AI-powered continuous KYC
e. Governments will be a banking segment in itself
- Stronger push on to digital currency adoption in some countries (e.g. Rupay in India) will continue
- More and more digital schemes for straight-to-consumer benefit will continue to rise especially in BRICS and other Emerging Markets
- This will continue to nudge Banks and Financial Services firms, especially in emerging economies to continue to innovate
f. Middle and Back Office modernization will pace up
- Traditional banks may have modernized the front, but the focus will shift to improving middle and back office operations. Platform-based solutions/Low Code No Code offerings will see accelerated demand
- Data & Analytics will play a critical role in real-time reporting & dashboard services
g. AI/ML will power a lot of traditional banking bastions
- Areas like cash management will see higher usage of AI/ML to predict deposits and potential defaults
- It will be interesting to see innovative solutions around areas that are traditionally highly manual like exceptions handling
Q2. Which areas within Banking have the highest demand for Analytics and AI?
In my opinion, the following areas within Banking are seeing the highest demand for Analytics and AI:
- Deeper Data Led & Proactive Fraud Monitoring/Detection - to avoid potential fraud
- Credit Risk Analysis - to ensure fewer defaulters within the portfolio
- Highly segmented and Personalized Customer Loyalty Management - To retain and increase adoption/customer base
- Remarkable Customer Service/Experience - to aid productivity as well as performance monitoring
- Financial Accounting – Reconciliation of payments and Financial Spreading continues to see high demand for AI-driven solutions
Note: This series will continue with additional insights into the Banking, Financial services industries based on the Coforge BPS consulting and services delivery experience as we go through a volatile phase in the market. For any feedback, comments or suggestions please email CoforgeBPS@coforge.com