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Masquerading as a better banking service, these perks are nothing more than small treats

As we usher in a new era of financial services, banks must look no further than the cloud to be able to quickly adapt and at a low cost, with minimum risk, all while rolling out products that customers actually want.

Even though the financial services market is more saturated and competitive than ever before it is still relatively hard to tell one bank from another when it comes to real value-added services. 

For example, every retail bank, offers some form of online and mobile banking; and the majority of private banks have adopted automation and robo advising of some sort to help bring costs down and adapt to their customers’ ever-changing needs. 

The result of these similarities is that rather than creating a unique product that naturally differentiates them from the rest, banks are using marketing ploys to try and stand out – offering perks like free travel insurance for premium customers; zero-fee balance transfers; no interest on overdrafts; low-cost or flexible loans. But this old-school approach is now being challenged. Disguised as providing a better banking service, these perks are nothing more than small treats. 

So how can customers make sense of their options and make the right choice? Technology has already forced change across other industries, putting the customer in the driver seat and giving the financial services industry a guide on how to move forward. Big Tech players like Amazon and Google were among the first to use big data and algorithms to analyse behaviour, allowing them to predict what the customer wanted – oftentimes even before the customer knew it themselves. 

As these types of predictive technologies become more widely adopted, it has had two main effects: customers have come to expect highly personalised and relevant services that enhance their lives; and Big Tech companies are encroaching on the traditional banking space by offering things like loans and payments. To put this shift into perspective, the capital reserves held by Apple today would put it among the top ten banks outside China. And this is just the beginning for Big Tech, I anticipate this move into the world of payments and banking to only become more prevalent. 

Combined, these changes are forcing banking into a new era of differentiation and choice, where customers will expect to get what they want, when they want it, and at a price they’re willing to pay. Banks can no longer hide from this change in customer behavior, and need to jump in head first to embrace the ways in which the industry is being disrupted by technology.

The common thread that will link every successful player together is agility. The ability to be able to quickly adapt to reflect developments within its own market space, as well as change products, services and business strategy, is vital in today’s competitive and changing banking landscape. And to clarify, this agility isn’t just about the technology that is used – it’s a business model. 

While some may think that the agile model shackles the bank to a set of tools, what it actually does is align the bank to choice, thereby maximising the chances of it becoming its best and most optimal version. In other words - they get a toolbox.

Bringing Sunshine on a Cloudy Day

Digital technology in the cloud lets banks quickly reconfigure products and services to take into account new regulations or temporary circumstances. This ability to be able to reconfigure was of particular importance for recent events like the fallout from Covid-19 and the need to waive overdraft fees or provide payment holidays. This is where legacy systems really show their immovable nature, demanding that banks carefully plan and hold their changes to a timeline, which can take months. Meanwhile, banks working with the cloud can carry changes out on the hoof, often within just a few short hours. Being able to turn on a dime is no longer a unique selling point but a requirement. This makes banks more competitive, incurs lower costs and lowers risk. 

Migrating to the cloud also allows banks to align costs to revenues thanks to the nature of billing on a pay-as-you-use basis. Usage can be adjusted according to demand, therefore expensive technology no longer has to lie idle on-premise. This also means that locked-in costs are minimised. You could launch a great new customer-centric bank today and scale up to become a $1bn unicorn in no time. Finally, cloud technology helps reduce risk. By providing the flexibility that the cloud offers, banks can adapt their products and services as the market evolves. They are no longer locked into medium and long-term strategies, which allows them to be nimble. 

It’s important to note that cloud providers invest heavily in their technology. From updating and upgrading constantly and ensuring resilience and security, cloud providers offer an all-in-one service that individual banks simply couldn’t afford in any other way. So banks can rest assured that they will have the VIP treatment working with cloud providers, accessing the most secure, resilient and up-to-date technology.

Make no mistake, competition will be strong. Customers have set the bar high and will expect the best or they will look elsewhere. However, banks using cloud technology will be ready to compete and offer their customers services that they both want and need, at a price they can actually afford. As a result, customers will have real choices for the first time – choices that will add value to their banking experience and most importantly, their lives.




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