While Covid-19 bore a significant impact on financial institutions’ original strategy for the beginning of the decade, Kam notes that “2020 was an unprecedented year, and I think it is quite clear that some of the trends have been accelerated.”

One of these trends, Kam explains, is that of changes in customer behaviour - both from a consumer and corporate perspective - have shown an increased expectation that all services must be digital, instant, and contactless.

Nordea’s corporate customers not only expect digital self-service solutions, but they are also moving their business models from offline to online, meaning that banks like Nordea need to accelerate their digital capabilities to adjust to this new normal.

When it comes to managing this new pressure, Kam adds that transaction banking is also exposed to rapid and disruptive transformation both from industry regulation and technology innovation.

“There are many new entrants not burdened by regulatory requirements and able to challenge the incumbents like banks. Banks must continually spend time and money on making sure we and our infrastructure are compliant, therefore our investment ability is crowded.”

This may mean banks may not all have the funds available to allocate toward customer enhancing capabilities. For incumbents like Nordea, Kam furthers, it is important to continually focus on finding the right strategic partners, such as fintechs, in the industry to accelerate capabilities that leverage fintech’s user experiences, interfaces and data to add value for the customer base.

When it comes to overcoming regulatory barriers, Kam notes that regulators are trying to lower the barriers for third parties to enter to payments, increase competition and lower costs. Examples of this can be seen in the innovation being developed on top of P27 - the Nordic initiative creating cross-border, multi-currency, multi-country, instant payment rails.

“I’m excited that regulation is not only a cost but is also presenting an opportunity for banks.”

Chiefly, this includes new revenue streams and business models around technology and data, tied not only to data insights, but for the delivery of personalise customer experiences.

“Data analytics capabilities is key to the monetisation of our services, so we will utilise it in trying to support our customers. We will also see further innovation around payment initiation - this is moving to non-bank channels, the embedding of payments. Technology is helping us to accelerate this, and we see cloud technology being used not only for reducing costs or becoming more technology agile, but also to facilitate data-driven technology with accelerated roll out via fintechs.”

Opportunities tied to leveraging data and technology for climate action will be explored in depth throughout Finextra upcoming event, Sustainable Finance.Live, from 11th-12th May. You can find out more and register here.