Digital Bank - Beyond App - II

Challenges to becoming a digital bank, according to the Temenos include:

• Data siloes and high IT maintenance costs
• Compliance costs in terms of focus and resources
• Long payback periods for major transformation projects
• Poor ROI on intial investments
• Modest impact of fintech players to date
• Unproven solutions

10 Requirements of a Digital Bank

In the discussion around becoming a digital bank, Temenos provides a list of 10 requirements that need to be met to satisfy the new digital consumer. There are definitely more components to becoming totally digital as an organization, and many of the requirements depend on an updates core system, but these are components that can’t be ignored.

1. A digital-first strategy that extends beyond just mobile and online devices to allow for expansion into emerging channels and communication options. The ability to provide anytime, anywhere, any device banking includes an integration strategy that allows for a seamless transition between devices.
2. An analytics-driven experience for customers that supports real-time contextual and personalized solutions. With insights delivered across the organization and to all customer devices, these analytics will also support product development in the future.
3. A customer-centric perspective that provides a seamless experience and an integrated view of financial affairs.
4. Instant fulfillment made possible by straight-through processing and real-time transaction insight availability.
5. Ability to support open banking, including the offering of products and services developed by outside organizations. A strong API strategy is the key to becoming a customer’s ‘banking concierge’ offering the best available services in the marketplace.
6. Open architecture allowing for the reduction in costs and operational risk. A fully integrated, automated digital solution avoids the duplication and reduces the manual processes that result in sub-optimal end results.
7. Upgradable solutions across the organization that tie back-office and front-office processing into a seamlessly integrated solution. With differing innovation cycles, solutions must be easily upgradable independent of each other.
8. Agile development where products and services can be brought to market almost instantly. This is important as regulatory changes occur and increased personalization is desired.
9. Due to expanding volumes of data, scalability of solutions is imperative. According to Temenos, in the next 10 years, banks will need to plan for 100-fold increase in the number of transactions and enquiries handled by their banking platforms.
10. Cloud-based solutions will be required to provide scalability, to drive down processing costs, and to support increased security standards.