BANKING SECTOR
Compiled by Tamara Rebeira
ADAPTIVE TECH SOLUTIONS
Chamalie Serasinghe highlights the need for a future ready banking sector
Q: In your view, what strategies should banks employ to handle operational risks and ensure business continuity in the digital age?
A: Risk management is essential for a bank’s business continuity. Banks design risk management strategies to mitigate the various types of risks they face.
A robust risk management framework ensures a bank’s ability to continue operations to safeguard its reputation and stakeholder confidence.
Technological developments are driving traditional banking towards digitalisation. Along with this trend, new risks – such as information security, cybersecurity, data protection and third party risks – have evolved.
Traditional risk management strategies may not consider these risks – and in such instances, they may fail to safeguard banks against such threats. A holistic view of the risks that banks face is important to design a robust risk management strategy for business continuity.
Q: How should banks measure the success of their operational strategies?
A: The operating landscape for banks is changing rapidly and inherent risks are evolving. An operational strategy outlines the tactical plan for banking operations. A robust strategy identifies these dimensions clearly and develops indicators to measure progress.
Customer satisfaction, risk events, digitalisation, employee satisfaction and financial performance are critical performance indicators that can be used. Deriving a mechanism to track these key performance indicators (KPIs) is equally important.
Successful execution depends on how closely it is monitored. Continuous monitoring and tracking KPIs will help a bank measure the success of its operations strategy effectively. And continuous monitoring will enable informed adjustments as and when they’re needed to stay on course.
Q: In your assessment, how crucial is it for banks to stay up-to-date with tech advancements to enhance the customer experience? And what role does technology play in this equation?
A: As technology continues to evolve, customer expectations grow. Convenient and speedy digital banking solutions rather than traditional practices have become essential.
The rise of digital technologies has transformed the payments sector, leading to the emergence of fintech companies that are challenging traditional banking models. To deal with these emerging challenges, keeping abreast of the latest tech trends is vital for banks.
Over the last two decades, the banking sector has undergone a remarkable transformation driven by rapid technological advancements. These revolutions have profoundly changed how banks interact with customers by digitalising banking services.
E-banking – which includes internet and mobile banking, and other digital platforms – has emerged as a critical pillar in enhancing the customer experience. These channels enable clients to access their accounts, and conduct transactions anytime and anywhere without visiting a bank.
Beyond transactional capabilities, banks can also leverage technologies like big data, AI, machine learning and cloud computing, to gain better cost advantages and control, and deeper customer insights – and customise customer services.
AI powered solutions enable round-the-clock assistance, faster response times and consistent service, greatly improving the overall customer experience.
Q: So how can banks build strong relationships with their corporate clients?
A: The banking sector is often characterised by a high degree of homogeneity. Various financial institutions offer similar products and services, offering clients greater flexibility in selecting their financial service providers.
Establishing and sustaining strong relationships with corporate clients is crucial for success in this competitive landscape. A bank’s ability to recognise a client’s needs and respond promptly plays a pivotal role. Banks that can react quickly and customise their services may establish a stronger position in the market.
Moreover, a bank’s ability to provide seamless digitalised solutions, add value to clients, simplify processes and maintain regular interaction is a crucial part of this equation.
Q: And finally, what trends are you observing in client needs – and how should the banking sector adapt to them, in your opinion?
A: With the rapid development of technology, client needs and expectations are shifting. The surge in internet and smartphone use coupled with the growth of e-commerce has greatly accelerated the trend towards digital banking.
Clients expect seamless anytime, anywhere access to financial accounts, and the ability to transact through e-banking, mobile banking and similar platforms. The shift to digitalisation has led to a paradigm shift in how banks operate, from customer relationship management (CRM) to risk monitoring.
While automation has streamlined many processes, it has also introduced new risks such as those arising from third party vendors, model errors, cybersecurity and data privacy, emphasising the need to strike a balance between convenience and safety.
As banks look to capitalise on the benefits of digitalisation, they must also prioritise safeguarding customers from related risks. Accordingly, banks need to focus on robust digital infrastructure, accurate data models and ensuring that employees are equipped with the right skill sets to navigate the digital landscape.
Collaboration with third party vendors and regulators is also needed to manage risks associated with digitalisation.
