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How Asian FIs can survive digital disruption

Nurdianah Md Nur | June 7, 2016
"The FI that is able to ensure the continuous delivery of microservices will be the one that comes out ahead," says Sean Lee, Head of Business Development, Pivotal Asia Pacific and Japan.

Sean Lee, Head of Business Development, Pivotal Asia Pacific and Japan.
Sean Lee, Head of Business Development, Pivotal Asia Pacific and Japan

As customers increasingly expect digital financial services to be a norm, financial institutions (FIs) need to transform their operations and services with digital solutions. Moreover, FIs need to compete with financial tech (fintech) companies which have huge backers - just last year, US$4.5 billion was invested in fintech in Asia Pacific - and are able to skirt around the strict regulations imposed on FIs. We talk to Sean Lee, Head of Business Development, Pivotal Asia Pacific and Japan, find out what FIs need to do to overcome digital disruption and meet the evolving customer demands.

It's a tough time to be a financial institution (FI) today. Besides traditional competitors (ie. other banks), telcos, IT companies and FinTech companies are eager to eat into FIs' revenue, especially in the areas of peer-to-peer (P2P) lending and mobile payments. How can FIs keep up with the competition and ensure their relevance in future?

As the wave of digital transformation sweeps across Asia, businesses and financial institutions are finding themselves at the crossroads of transformation. The rapid improvements to technological infrastructures and the move to Mobile have become so pervasive in our lives that it has created a massive shift in the way the industry works. FinTechs and startups are disrupting traditional business models and putting pressure on FIs to relook their lending, payments, and infrastructure.

In today's digital economy, FIs need to learn how to fully harness data and analytics to maximise the value they bring to today's modern banker. Without a doubt, big data is at the centre of how banking organisations can transform to deliver more value to customers, while cutting costs and mitigating credit, market, and operational risks. Harnessing data and analytics will also help organisations meet stringent regulatory and reporting requirements, compete with technology disruptors and reduce costs in the face of margin pressure.

Changing market forces of cloud, big data, mobile and social have also driven the need for FIs to create a new class of applications (both online and mobile) that deliver better user experiences. With the number of smartphone users in Asia Pacific reaching over 1 billion , FIs who are able to leverage big data and analytics to tap into today's mobile customers through targeted mobile strategies and deliver an 'always on' multi-channel communications will be the ones that stay ahead. To keep up with the competition and generate greater loyalty, engagement, and profit, FIs will find themselves in a position to be mobile. Key to this will be a complete mastery of data analytics and the development of mobile applications and capabilities.

 

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