The bank of the future looks significantly different than it does today. The changing landscape of B2B banking and payments is presenting an opportunity for banks to become strong infrastructure providers. With a concentration on transactional services, capital financing, regulation, and compliance, banks can become the solid backbone for consumer-focused companies.
By relinquishing consumer-facing architecture — including websites, apps, sales teams, and branches — banks can pivot resources to boost their expertise without trying to compete with companies that are experts at customer experience. Banks would essentially become solely B2B, eliminating the interaction with end users and the need to create consumer-facing apps, services, and products.
As consumer experience and customer service-focused objectives become essential to companies, banks are poised to be the data resource for information about individuals. With the sophisticated data security the banking industry deploys, it puts these financial institutions in a position of trust.
Using big data, machine learning, and automation, banks can provide information to third parties, such as governments, telecommunications companies, other banks, and consumer-servicing companies. However, there is an ethical consideration in determining what types of data can be shared.
Barclays, a nearly 330-year-old company, has massive amounts of legacy data that, when run through machine learning algorithms, eat up a lot of time, making the data difficult to use. Filtering and making sense of the large amounts of information is a complex process.
While Barclays may not use the data to the fullest extent possible, the company understands that big data can allow banks to dive deep into consumer spending habits and deliver almost anything an enterprise would want to know. Of utmost importance to the financial powerhouse are privacy and safety, as well as determining what works for everyone while looking at the ways in which data is being used.
Emerging Tech in Banking
Machine learning, data science, and big data analytics are transforming the banking industry while also dealing a greater risk, with justification needed for when, where, and how data is being used. As the use of analytics advances, Commonwealth Bank of Australia (CBA) has adopted open source, open standards, and hybrid cloud technologies.
With these strategies, the bank is able to run high-computing, high-storage analytical workloads in a stable manner, while allowing experimentation and growth. Working with Intel, additional partners, and a software-defined infrastructure network, CBA is able to streamline workflows and operational expenses.
With corporate banking projected to see growth through 2020, the greatest opportunity lies in working with fintechs, not against them. To remain relevant, retain customers, and secure new ones, banks need to be seen as players in the marketplace with dynamic solutions for corporate clients.
This includes fintech innovation, digital transformation of heritage systems, and omnichannel platforms. Bringing an integrated offering to clients through connected corporate banking is imperative for future profitability.
As part of its commitment to capitalize on fintech, JPMorgan Chase’s investment in Bill.com will allow the company to better serve its clients. This investment will give JPMorgan Chase’s small business clients access to the more than 2.5 million members of the Bill.com network for faster invoicing and payments.
Not all banks are looking to close the doors of their brick-and-mortar branches, however. Axis Bank, India’s third-largest private lender, continues to push toward its goal of opening 400 new branches in 2017, with the belief it will increase visibility and relevancy worldwide. The company is strategically growing its retail portfolio and looking to invest in education loans.
Flexibility and technology are the key drivers of corporate banking’s future. To ensure strong relationships and viability, banks must be willing to adapt and innovate. To learn more about how Intel is helping transform the financial industry, explore our other finance-related blogs and articles on the Intel IT Peer Network.