UK national banks kick off their reporting season for the third quarter this week. As tougher regulations come into force in 2018 in the form of GDPR and PSD2, banks are reconsidering their current position and how to maintain their market share in an increasingly competitive and volatile landscape.
As a result, many financial providers are partnering with digital experts, to give them the operational resilience needed to create new products and services aimed at attracting and retaining digitally savvy consumers.
The market of business process outsourcing in financial services has been forecast to continue growing by 6.4% per year over the next three years. This is being driven largely by the increased adoption of technology and automation through partnerships. The nature of banking has changed significantly, with customers interacting with banks beyond the branch through online banking, chat bots, and a variety of apps.
Farida Gibbs, CEO of technology consultancy Gibbs Hybrid, comments: “As PSD2 requires banks to open their data to other suppliers, banks will soon be in open competition with other financial services providers, who will increasingly set the pace when it comes to innovation.
“Increasingly, banks are having to fight for survival against new Fintech challengers, in a climate of ever-growing regulation to guard the data and security of customers. To stay ahead of these agile competitors and comply with new rules, banks will need to keep up with digital advances more than ever. Many banks are in need of more agile infrastructure to contend with these new challenges, relying on outdated legacy systems that cannot support the pace of change required.
“To modernise and stay competitive, many financial companies are relying on the help of cloud-migration programmes. Uploading existing processes to the cloud increases agility and efficiency, bringing their processes up to speed with innovations in technology. These partnerships provide an opportunity to take advantage of the sophisticated digital expertise needed to survive and grow.
“High-street banks still benefit from broad customer bases and established reputations, an advantage that these challengers are keen to pursue. To stay ahead of their challengers, banks will need to secure that extra piece of the puzzle – digital expertise.
“To future-proof their businesses, banks will be relying on automation and digital processes that free up staff time in order to focus on customer engagement. Successful future banks will offer the best of both worlds, making the most of their personal touch whilst streamlining and automating digital processes.”
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