Reimagining financial services: Banking on the Future

Attributed to Elson Chia, VP and Head of Delivery, at Fujitsu Asia Pte Ltd | 8 February 2022

Elson Chia

VP and Head of Delivery, at Fujitsu Asia Pte Ltd

A new era dawned in Singapore’s financial sector when the Monetary Authority of Singapore awarded four digital bank licences in late 2020.  With technology transforming the way we interact when it comes to banking, and the changes we have witnessed in the last two years, customers’ expectations of change have ratcheted even further.

To respond to these changes, banks and insurance companies need to understand how customers have been affected and how their needs have changed as a result.

Fujitsu’s research on customers’ banking experience confirms they are fully aware of just how much change has happened and – thankfully – most say it’s been for the better. Nevertheless, a wide gap remains. Almost two-thirds of consumers expect their banking experience to be even better in five years. Nearly half want their bank to be more innovative with technology, yet a quarter thinks their bank simply lacks the technology and innovation to give them the services they wanted.

Striking the right balance

Customers are willing to embrace change, yet traditional banking norms still matter. The research showed this clearly with six in ten still preferring to deal with a person, rather than technology, when resolving an issue with their bank; a clear majority more likely to deal with a bank if it has a local branch; and nearly three-fifths concerned that they won’t be able to easily access cash if banks were to remove ATMs.

This desire for improvement plus familiarity makes transformation complex. It requires a balance between maintaining fundamentals and new ways of delivering products and services by creating customer experiences that are innovative and flexible and secure, both in terms of money and personal safety.

What’s needed is a reimagination of the financial services business and how it interacts with both customers and employees, leading to a robust, agile, sustainable, and resilient business.

How has the pandemic changed attitudes?

Today the pandemic has retrained us to stay away from branches and town centers, convincing retailers to accept digital payments even for cents rather than dollars, and to seek help and information online as much as possible.

Digitally-enabled enterprises proved to be better able to quickly adapt their operations and workforces to maintain the integrity of their brand and deliver secure, high-quality customer engagement. Digital transformation in financial services is the key to providing a great digital banking customer experience through great employees who can engage directly with your customers. It drives internal efficiencies by targeting automation to cut costs and eliminate errors, as well as ensuring that the business is more resilient.

Beyond the technology, trust has always been critical to customers’ relationships with their banks. Banks’ digital competency is a relatively new, but growing, element of consumer trust. Although technology has created many opportunities for consumers, there is now increasing awareness of the potential security – and privacy – implications of new technology being in place.

Based on the LexisNexis Risk Solutions Cybercrime H1 2021 Report, automated bot attacks targeting financial services have increased significantly globally, particularly in the Asia Pacific (APAC) and Latin America regions.

The public’s misgivings about the security of new technologies may stop them benefitting from further innovations. Customers are concerned about the privacy of their data, the security of their money and how and why certain technologies are used.

What are the key technologies?

Successfully enhancing customer experience in financial services relies on data. The banking and insurance sector has always been a data-rich business because customers and their transactions generate vast volumes of information.

When it comes to leveraging data, AI is an endlessly adaptable framework, capable of molding to any application. Predictive maintenance is a front-runner use case, and in banking, AI is already being applied to ATM data to detect the early warning signs of mechanical or software failure.

According to a Fujitsu White Paper, insurance is still at an early stage of AI maturity, but it is set to see AI-supercharged savings in process automation. While RPA (Robotic Process Automation) yields roughly 20%, machine learning-based hyper-automation results in approximately 60% savings — improving over time as the algorithm becomes adept at more complex processes. AI’s aptitude for pattern recognition excels at identifying suspicious transaction sequences, playing a role in helping the industry manage and eliminate fraud.

Optimize every aspect of business at lightning speed

Another new technology finding new applications in financial services is quantum-inspired computing. Until now, real-time optimization has usually been impossible because the number of options is beyond the capacity of conventional digital computers to answer quickly enough to be commercially useful. Quantum computing, which has potential to take IT to a totally new level, might offer a solution in the long term. However, it remains at an experimental level for the immediate future, with the associated high costs and risks.

Services such as Fujitsu’s Quantum-Inspired Optimization Services (QIOS) however are based on today’s ultra-reliable digital platforms, meaning they are available today, rather than needing to wait for true quantum computing to arrive. Going far beyond the power of ordinary computing enables a critical edge in a challenging environment where change can be sudden and disruptive.

Using the latest technology in the right way Technology on its own, of course, is not the answer. More so than ever, lessons learnt from the pandemic has put the spotlight on businesses unable to offer a truly personalized, context-specific digital banking customer experience. To survive, banks will need to recognize that banking needs to become a part of consumers’ lifestyles. Leveraging data to enhance the customer experience at every touchpoint, and continuing to act in ways that build trust will help companies get ahead of disruption, build on their brand legacy, and thrive through the new age of banking.