Felippe Mantteucci Melo, Vice President of Technology at IBM Brazil, explains, based on the IBM Institute for Business Value 2021 report, the relationship of customers with financial institutions and highlights trends in the digitization of services in this sector.
It was almost in the blink of an eye: Suddenly, customers’ experience with the financial sector reached a level that few people imagined a few years ago, when they were still waiting impatiently in line at an ATM.
The relationship between people and banking institutions continues to evolve exponentially and, for that to happen, the level of investment in technology is voluminous. Naturally, after all, it is this contribution that will accelerate the digitization of services and create new ways of connection between banks and their customers.
Throughout 2020, the financial sector in Brazil confirmed this scenario: Investment in technology grew 8% here, at around R$8.9 billion. More than that, disruptive technologies have gained significant relevance in IT investments, with AI being a priority for 93% of institutions, a 10% point jump in just 12 months.
As a concrete example, more than 618 million calls were answered via chatbot over the past year in the country according to the FEBRABAN 2021 Banking Technology survey.
Associated with such consistent numbers, the banking sector will undergo a new transformation phase with the consolidation of Open Banking, a standardization of the process of sharing data and financial services by institutions through the opening and integration of technology platforms and infrastructures.
Trusted digital relationships, therefore, have become the main asset of financial institutions. IBM recently released the IBM Institute for Business Value 2021 Global Outlook for Banking and Financial Markets Report on trends that will dominate this market in several countries, including Brazil. I have listed some of them for us to observe.
Personalized, transparent and real-time services
With the COVID-19 pandemic, customers quickly migrated to direct service channels such as mobile apps and online banking. The significant increase in the use of these digital experiences has fueled the demand for personalized, transparent, real-time services that are integrated into customers’ lives and businesses. As a result, banks are accelerating the adoption of technologies such as Artificial Intelligence, automation and hybrid cloud, accelerating this process.
New cloud-based business architectures: An inevitable migration
Banking institutions are migrating to new operating models based on an open, hybrid multi-cloud architecture. To achieve the expected return on that investment, financial institutions can target a range of 40-50% of workloads in a specific public cloud, around 20% in a traditional public cloud, and the remaining 30-40% on-premises, based on a modern mainframe infrastructure. Banks are stepping up this migration of business-critical workloads to the cloud.
Increase open and free data to generate leads
The banking industry has access to vast amounts of customer data which is increasingly open. Data environments need to be modernized, leveraging new analytical and Artificial Intelligence (AI) tools, while striking a transparent balance between ownership and sharing across entire ecosystems.
Redefined workforce
Teams of employees, subcontractors and automated systems are working together on new collaboration models for well-defined tasks and areas of expertise – all accelerated by teleworking. The redefining of the workforce, combined with intense competition for digital talent, will transform the way resources are recruited and managed across the industry.
Competition beyond the financial market
Big companies, including big tech, are expanding their business with in-house financial services. They are connecting with customers, enabling and leveraging ecosystems around people’s lives and their businesses. Through this movement, the main financial institutions are also developing new value propositions that address this unprecedented model of consumption of financial services. They are innovating ‘from the inside out’ to connect with customers and engage them in non-banking platforms.
In the same way that people are immersed and, most of them, adapted to the new technologies offered by the financial sector, institutions also need to be prepared and well guided by leaders tuned in to new trends. The technological revolution is inevitable at all ends of the financial business, but it remains to be understood which companies are more prepared for it. The line at the ATM undoubtedly fell behind.
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