Banking on Technology to Transform the Future of Financial Services

By: Tony Leggio, VP of Financial Solutions

As retail banks prepare to operate in a post-pandemic world, they must answer this key question: Are they building based on what was or what will be? One thing’s for certain, they can’t afford to take a “wait and see” approach to transformation.

Find it on Apple News

The ”new normal” in retail banking is nothing like we imagined a year ago. COVID-19 radically changed consumer behavior. Practically overnight, retail banks had to fast-track their digital transformation to accommodate the growing customer demand on mobile, online and call center digital channels. Building for digital agility is more important than ever for retail banking. Banks would benefit to find new ways to optimize the infrastructure of the physical branch given the accelerated digital adoption and shift in customer preferences.

Modernizing Technology for Digital Transformation

The COVID-19 crisis put a spotlight on the legacy infrastructure some banks still use. When the pandemic first set in, many banks struggled with getting their call centers to be fully functional. Call volumes were overwhelming, due in part to less agile technology and manually intensive processes. In the wake of the pandemic, banks are now reassessing their priorities in terms of modernizing their infrastructure for today’s digital world.

At the center of a bank’s digital transformation should be an effective multi-cloudstrategy. Multi-cloud solutions can:

  • Deliver services and applications faster.
  • Enable immersive experiences that engage customers and employees.
  • Facilitate more secure access and protect data from threats.
  • Share, collaborate, and manage content more securely across devices and applications.
  • Support business agility and market responsiveness by using Application Programming Interfaces (APIs).

Colocation services can also help banks take the next step in digital transformation. Colocation of business technology equipment in data centers isn’t just about buying space. Robust data center services combined with options for hybrid cloud connectivity can help a business:

  • Reduce ongoing challenges associated with managing company data centers, such as reducing costs, managing data/storage growth, and reducing the burden of hardware/software maintenance.
  • Minimize downtime in speed data recovery in the event of an outage or disaster.

With users located anywhere and everywhere, the network connecting them – and optimization of its use – should be a key component of a bank’s cloud strategy. Banks need a future-ready architecture with the flexibility to add new networks and services. One that lets them select the right option for each branch and have a network that can assess and use different transport technologies based on their performance. One that is not only easy to deploy but also cost-effective and highly secure. Software-defined Wide Area Network, or SD-WAN, provides that ability.

Using SD-WAN, a business with multiple sites can manage network traffic and applications from one central dashboard in the cloud instead of at each physical location. This dashboard orchestrates to each location, acting as a single network. That in turn provides the customer with more control over application performance, flexibility, and scalability.

Embracing Artificial Intelligence (AI) to Transform the Customer Experience

To meet customers’ rising expectations with digital banking, institutions need to offer experiences that are:

  • Intelligent (that is recommending actions, anticipating, and automating key decisions or tasks).
  • Personalized (that is relevant and timely based on an understanding of the customer’s past behavior).
  • Truly omnichannel (seamlessly spanning the physical and online experience from the first touchpoint to the last).

AI does all of this. AI and data analytics should be key areas of focus for retail banks as they shift from using these not just to monitor transactions but also to assist customers via “conversational banking.” Banks of the future will merge human and digital channels to help customers more quickly and at a lower cost. For example, customers can start a conversation in a banking app with an AI chatbot, which is capable of answering simple questions, but can access an employee for more complex inquiries. 

Enhancing Network Security

With the dramatic rise in remote work and cloud adoption over the past year, security threats have increased as well. Millions of employees are sitting outside the traditional corporate network, using the internet to access resources in the cloud from various locations and devices. This has created a big challenge for IT security managers who suddenly have less visibility of the network. Many companies are now considering the use of Secure Access Service Edge, or SASE. SASE combines SD-WAN with comprehensive security functions into a single architecture. With SASE, users go directly to the cloud without putting sensitive data or applications at risk.

The Future of Retail Banking

So, what will it take to make retail banks future-proof? While no one has a crystal ball, it’s fair to say it will involve ongoing investments in technology, data, and infrastructure. One thing you can bank on: The financial institutions that take the lessons they’ve learned and focus on a customer-centric and future-flexible strategy are in a much better position to succeed in the future. Some would even argue their survival depends on it.