Pursuing A New Future of Innovation Through Digital Banking Strategy

Aug 31, 2022
BankingFinancial Services Industry
Double exposure of city and rows of coins for finance and banking concept
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How has banking evolved during the rapid digitisation of recent years? The answer lies in changing consumer habits, tech-driven disruptions, and cultural shifts—the very trends that are setting the stage for the industry’s future. Millions of customers are going online, while shaping their expectations for digital experiences. They now seek personalised and seamless online experiences, with such demands persisting even as economic activities return to pre-pandemic levels.

New players, too, are disrupting the landscape in unprecedented ways. Banks are no longer the key players in the market, with fintech companies, digital-first start-ups, and tech giants delivering their own brand of financial services. Then there is the rise of sustainability. Carbon neutral and net-zero commitments are more than just “nice-to-have” now; they are a business imperative that is driving banks to rethink their operations.

At the centre of these changes are disruptive technologies like artificial intelligence, cloud computing, and machine learning, which are paving the way for new business models. One example is Banking-as-a-Service, with the market expected to reach US$3.6 trillion by 2030.

Refining the balancing act of innovation and risk

Financial institutions cannot afford to bank on the status quo. To stay ahead of these trends, CIOs have to first confront and overcome their own set of challenges: steering the business through waves of disruptions while still pursuing innovation. For many in the industry, this is treading on familiar grounds. After all, banking already has a higher tech spend than other sectors, but a substantial amount of this is devoted to maintaining day-to-day operations instead of driving innovation.

To walk this tightrope between performance and risk, CIOs can look towards a scalable and transformative banking framework, while also considering the following: full stack development, agility and resilience.

For many banks, a full stack strategy will offer better innovation, since it provides full, comprehensive control over how they oversee and deliver customer experiences. Coupled with an agile outlook, banks can roll out their services more quickly, giving ample room for continuous service iteration.

However, this is also dependent on institutions meeting their regulatory compliance. Sustaining resilience against rapidly evolving consumer behaviour—that is, the ability to quickly adapt their strategies to overcome new challenges and capture opportunities—will also be crucial. This can be achieved via composable infrastructures that allow institutions to deploy the resources they need on demand.

Preparing for success with digital banking

With these in mind, global IT provider Huawei and banking platform Temenos have forged a partnership—one that is centred on helping legacy banks digitally transform their operations. It’s a two-pronged approach; Huawei provides the cloud-native technology necessary for facilitating digital banking while Temenos delivers the industry-leading apps that offer the rich banking capabilities institutions need.

Together, the two companies are working towards a brand-agnostic vision, where every cloud-compatible program can run on all types of cloud, regardless of the brand or mode of deployment.

To help institutions gain ground on market trends and their competitors, Huawei and Temenos will be providing one-stop-shop services that can support their plans for digital banking. Larger banks, in particular, can accelerate their cloud journey by modernising their legacy systems with the service offerings from Huawei and Temenos.

An example is a digital bank based in Singapore. As one of the first banks in the country to receive a virtual banking license from the Monetary Authority of Singapore (MAS), the bank was successfully launched in nine months through Temenos’ open platform for composable banking, which is hosted on Huawei Cloud. This has demonstrated the speed-to-value of a cloud platform, freeing it to deliver outstanding customer experiences, while still tapping on new growth opportunities whenever they arise.

In the face of fast-moving disruptions and constant reinventions, it’s time for institutions to move to the cloud at speed, so that they can leverage the wealth of benefits that digital banking brings. The future of banking is digital—and institutions need all the tools they can get to reshape the banking experience to their advantage.