By Fenergo CEO Marc Murphy
The pandemic forced financial institutions to make great strides with their digital transformations; changes we didn’t expect to see for the next five or ten years. Prior to the pandemic, financial institutions had been falling behind when it came to digital transformation, only increasing resources when absolutely necessary.
2021 will be an important year for financial institutions to finalize their digital transformation projects, enhance customer service and automate the detection and prevention of financial crime. Here are some of the biggest trends to watch out for:
Digitize Faster than Ever Before
The pandemic has required financial institutions to digitize further and faster than ever before. COVID-19 was a great teacher in many respects, not least how it highlighted the importance of innovation. Expect to see increased budgets and aggressive timelines in order to achieve digitalization goals.
In 2020, many financial institutions were left unable to effectively onboard new customers remotely at the onset of the pandemic, so there is a clear imperative for financial institutions to leverage technology which streamlines onboarding processes. This way, financial institutions will be well-equipped to respond to sudden changes and operate more efficiently while still ticking all the regulatory boxes. Regulators will continue to encourage financial institutions to utilize digital technology to maintain business continuity and more effectively mitigate risk.
The Ideal Client Experience Is No Longer a ‘Nice to Have’
When it comes to the optimal client experience, financial institutions are falling behind. Today’s customer expects to interact with their banks in the same way they interact with the likes of Amazon and Google, or with disruptors such as Revolut, Starling, and N26. The only way to deliver this enhanced customer experience is through automation, human-less workflows, and really accelerating the move to true digital enablement. This is something we expect will become a focus in 2021.
The challenge for financial institutions is to understand how they can digitalize their processes to make client journeys more effective. In order to streamline onboarding and create a frictionless client journey, financial institutions need to invest in the right technology. A range of recent technological advancements – such as natural language processing (NLP), machine learning (ML), optical character recognition (OCR), and Identification and Verification (ID&V) technology – enable financial institutions to automate data collection from scanned documents, which can then be cross-referenced against other data sources internally and externally.
We know that a good client experience is no longer just ‘nice to have’ – it’s business critical. The churn of potential customers due to a poor experience can add up to $10 billion per year in losses when you evaluate the lifetime value of a client. Investment in technology which improves the client experience must be a focus for financial institutions this year.
Fast track regtech and improve the bottom line
Pushing digital acceleration is critical today but so is prioritizing regulatory compliance to ensure that the financial institution is safe. The aim should be to reduce the cost to serve, enabling greater competition with the new disrupters in the market. This can be achieved by using automation to build a leaner operating model and at the same time, bring the customer experience to the fore.
COVID-19 has been a huge wake-up call to the financial industry. And even though the pandemic has “kick-started” the industry in terms of digitalization, there is still more that needs to be done.
Founder and CEO, Marc is responsible for Fernergo’s business and operational strategy and corporate direction. With 18 years’ experience developing, selling and delivering enterprise financial technology to global banks, Marc has developed a proven track record of building successful business-winning and leadership teams. In 2020, Marc led a funding round of $80m with ABN AMRO Ventures and DxC technology, at a post-money valuation of around $800m. In 2015, he led an $85m funding round with Insight Venture partners and Aquilline Capital partners, marking the second fundraising effort for the company. In 2013, Fenergo secured €4m funding from Investec Ventures Ireland Limited.
Marc was recently named a FinTech 100 Most Influential Leader in recognition of the impact that Fenergo’s technology is having on the way financial institutions manage their compliance obligations and operational requirements. Marc is a software engineering and MBA graduate of Dublin City University.