By Irina Ghose
As organisations across the BSFI sector look ahead to 2022, one aspect that stands out is the realisation that the scale and adoption of digital transformation needs to take a quantum jump to keep pace with myriad factors. New-age customers who are digitally savvy now have a plethora of options to choose from, whether it be fintechs, neobanks, among other ecosystem players who are designed to be agile from the ground up with a modern tech stack.
The ‘phygital’ model will be the most appropriate operating model in the future. This hybrid approach factors in the reassurance of physical interaction at branches along with enhanced customer experiences from digital touchpoints to bolster customer engagement which has become the new competitive battleground. The industry has seen a move to more open and interconnected ecosystems through modernisation of core platforms including open APIs becoming a versatile approach to drive faster value and innovation. Nearly 80% of corporate banks in India are forecast to run their trade finance and treasury workloads on cloud by 2024 according to an IDC report. In 2022, a key priority for BFSI companies will be to further leverage digital capabilities to fortify themselves with business resilience and agility—with the help of AI and cloud.
Ensuring uninterrupted productivity: Banks and financial services companies will increase reliance on remote working tools, enabling employees to access office data and systems from anywhere, all the while ensuring data security. Additionally, ‘touchless or virtual sales’, a result of infusing AI into customer onboarding, will become more important.
Supporting customers seamlessly: AI and cloud will evolve from being enablers of user experience to becoming ‘the user experience’. We will also see an increase in the use of speech, text & image analytics, IVR services, and bots to make customer engagement more seamless.
Co-creating innovative solutions through APIs: The move to open banking and making banks services available to other third-party companies via APIs will continue to accelerate in 2022.These APIs enable partner companies to co-create customer solutions in a frictionless manner and in a fraction of the time taken for such integration, thereby increasing productivity.
Empowering grass-root financial institutions: AI will be the key to empowering small banks and financial institutions in rural areas with branchless services. From artisans to startups to small businesses, AI and cloud will empower BFSI companies to offer loans and credits backed by accurate data. We will also see AI-based cognitive services being used to interpret customer queries in vernacular languages and local dialects extending financial services to the farthest corners of our country.
Innovation with tailored cloud offerings: Tapping into the expertise provided by industry-specific cloud solutions will be the way forward for financial services companies with features that are tailored to the needs, security standards, and compliance coverage demanded by the industry. These industry-focused cloud offerings empower banks to create a 360-degree view of the customer with greater insight and suggested next best action, create real-time visibility, and enhance insights to help reduce fraud.
Banks and financial institutions need to have a clear vision on what they intend to achieve with technology. Those that have digital and artificial intelligence (AI) in place will find it easier to respond to market and customer developments while having a clear competitive advantage with continued agility, innovation, and transformation.
The writer is executive director – Cloud Solutions, Microsoft India