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Why partnering is critical for financial services transformation

BrandPost By Huawei
Oct 15, 2020
Digital TransformationFinancial Services IndustryIT Leadership

The past decade has seen massive leaps in people’s expectations of the experience they will receive from financial services organisations.

This trend has accelerated even faster through the COVID-19 pandemic, as more customers have switched to digital channels.

As a result, opportunities have been created for nimble digital fintech startups, while traditional banks and other financial services organisations have found themselves needing to increase their investments in delivering exceptional digital customer experiences.

The goal for many organisations now is to lock in long-term customer loyalty among a customer base whose expectations are only likely to continue to climb.

A new architecture for financial services

But the future of financial services is about more than just the digitalisation of old processes. It requires a fundamental redesign at the heart of the service offering to provide a flexible platform for future development.

According to the President of the Global Financial Services Business at Huawei Enterprise, Jason Cao, providers need to embrace digital transformation as a core principle, rather than an add-on.

“They need to rethink the customer journey and redesign the customer engagement model and replan for agility,” Cao says.

Cao believes one of the key differentiators for future performance will not be what a provider offers, but the speed at which they can deliver new products and services.

“If they do not move, fin-tech companies will come to this field and take the customers,” Cao says. “So for traditional organisations, how to keep engagement of customers is very important, otherwise they will lose the interface and just become a pipe.”

Furthermore, Cao says these changes will need to be performed in a cost-effective way, as it will not be possible to pass costs along to customers. Hence, he says many organisations are turning to cloud technology as both a platform for innovation and means of reducing costs.

“If you go for a cloud-based architecture, your cost will be dramatically reduced and your agility will be greatly improved,” Cao says.

The Huawei advantage

Cao says Huawei is working with numerous world-leading banking partners to jointly develop digital core solutions for various scenarios, using individual strengths to build a distributed architecture based on micro-services.

This has resulted in the creation of numerous infrastructure, platform, and software solutions that are now offered by Huawei to financial services clients.

One example is Huawei’s work with Shenzhen Sunline Tech. Together they have launched a global contactless financial service solution to help financial institutions overcome the COVID-19 epidemic which has already been effectively applied in several countries and regions.

Cao says this demonstrates Huawei’s ability to bring innovation to the sector quickly, as part of its program of services and technologies for financial customers which has been dubbed ABCDE.

These include the Finance Cloud Architecture (A), built on Huawei’s hybrid cloud, data centres, and service cloudification, as well as its high-availability disaster recovery services and software-defined networking solutions.

‘B’ is for Smart Branches and Services, where new technologies such as 5G, AI, and cloud deliver high-end, convenient, and comprehensive financial service experience for customers.

ABCDE also embraces the idea of a Digital Core (C), based on open and distributed technologies to support the rapid development and deployment of new-generation applications to accelerate customer acquisition.

This concept also supports the implementation of new Data Platforms (D) to help financial institutions acquire customers, control risks in real-time, and reshape operation capabilities, and the ability to engage in Open Ecosystems (E) which enable customers in various industries to collaborate with business partners to offer end-to-end solutions.

Conclusion

Cao says this approach embodies a long-term trend of partnerships between financial services organisations and their technology providers to deliver the most comprehensive and adaptable solutions.

By partnering with experienced global technology providers such as Huawei, he says financial services organisations will be able to design the future financial services models that customers will demand.

“We are moving to a very interesting time where the future is hard to predict, and at times you won’t even know what the solution could be,” Cao says. “And in such a situation, it requires a very strong ecosystem and partnership, working together to solve the problems and trying to find the solutions.

“So we believe we need to build a strong ecosystem to work with customers to make a joint exploration.”

Click here to find out more information on how Huawei can help enable digital transformation for the financial industry.