The global Covid-19 pandemic has contributed to the need for the retail banking sector to more quickly transform to a customer-centric service that is digitised, personal and convenient.

Data, application programming interfaces (APIs) and automation could be leveraged to satisfy these expectations and invigorate the sector, says management consultancy multinational Kearney partner Hentus Honiball.

Large, traditional banks with complex, cumbersome operating models and legacy technology architecture are being threatened by agile new financial technology entrants.

In contrast with the siloed, product-centric approach of traditional players, responsive new players are looking to build customer-centric value propositions that are easy to access, simple to understand and offer a full suite of products and services from a diverse ecosystem of players.

Ecosystems can be coordinated with novel technology architecture based on secure APIs. These models allow other banks and third-party service providers to integrate into ecosystems at much lower costs and faster speeds.

“Agile financial institutions also digitise and embed their decision-making, governance and risk management controls, as well as compliance protocols in their processes. This results in efficient real-time risk management, as well as far swifter launches of new product offerings,” Honiball explains.

The greater frequency of interactions, with more touch-points, enables the collection of richer data and more reliable customer profiles. This leads to more meaningful personalisation and the advent of highly tailored targeted solutions to give each customer a unique experience.

Financial institutions are increasingly leveraging the power of rich customer data to look after the customer’s health and influence customer behaviour, promoting financial literacy and enabling healthy financial choices.

“This more progressive approach aims to empower the customer and reward positive financial behaviour to the benefit of the customer and the bank, as financially healthier clients invest and transact more.

“Analysis of rich customer data will also be used to guide customers towards healthy financial choices through customised financial education and a better understanding of savings, investment and insurance. Such a strategy is aligned with global shifts towards more ethical financial governance that support equality and financial stability,” Honiball notes.