Change the Bank: banking industry rules are changing
The new normal or post-normal has already started. After the global pandemic that broke the routine of every person, company, and country, we entered a new reality. Nobody knows how everything will unfold and, based on this new configuration, the question becomes:
How to align with the future?
We have no way of answering that question, but we know that the truth is this: the rules of the financial market are changing, and it’s no surprise.
We have already mentioned the importance of the cycle of Run the Bank to Change of Bank and how urgent it is to monitor these transitions to remain competitive.
Open Banking is a game-changer that alters the entire configuration of the banking sector. As with most disruption, those who do not adapt will die. Why then, is there still resistance to Changing the Bank? Let’s explore together! Follow along!
But what is Change the Bank?
The market is increasingly moving towards a breakdown of the company, focusing on relationship niches. Change the Bank is the first step. It consists of improving bank functionality through improvements in IT, operations, customer service, sales, and marketing. After that, we move to the next level: Open Banking.
All the changes we are seeing intend to guarantee the financial market’s improvement in performance.
The need to think about new businesses is increasingly urgent. It is necessary to rethink strategies to operate a whole model of change and become a force that connects companies to customers.
Whats is what Change the Bank is all about?
How to increase business volume?
How to connect the consumer to the service provider?
How to become a means of payment?
How to create mechanisms to help brave this new world?
The Bank must abandon the business as usual and change to fit into this new mold. These changes need to be part of the Bank’s processes.
Change the Bank as Strategic Repositioning
Strategic repositioning is the fastest way to turn uncertainty into opportunities. In this moment of crisis, no doubt realigning strategic planning should be the priority of every company.
Within the banking sector’s ecosystem, this repositioning will be the key turning point for Change the Bank. It is this that will guarantee a resilient, safe, and “anti-break” financial system. All this from a new portfolio of user-centric products and services.
This strategy solves a big challenge that banks have: providing excellence in service and improving processes.
The new normal is a trigger that accelerates the process of transformation and reconfiguration in banks: it is the bridge between Run the Bank to Change the Bank.
Why mess with the winning team?
In the post-normal, it was already clear that it is no longer just “run the bank.” It takes more effort than ever before to turn the key to “change the bank.”
Within the financial ecosystem, Run the Bank functions as a monoblock structure. Change the Bank comes to blow up this monoblock and turns it into several particles. These particles will connect throughout the Open Banking framework.
Change the Bank is the first step in transformation. It consists of improving bank functionality through improvements in IT, operations, customer service, sales, and marketing. After that, it’s on to Open Banking.
Remember: we are talking about a cycle.
It is essential to be clear that we are not leaving Run the Bank behind and going straight to Change the Bank, which isn’t even a proper transition. Run the Bank never dies, even once you start to Change the Bank by incorporating it into your institution’s reality.
It is a change of mindset, which changes the way the processes deploy. This whole transformation, even the operation itself, ends up becoming Run the Bank.
The 4 keys to change
It all starts with understanding the customer’s needs and pains
Fintechs rocked – and continue to rock – the financial market, shaking the structures of traditional institutions and increasingly winning over the hearts of customers.
With increasingly demanding customers, these initiatives are changing the traditional way that banks do business.
These new ways of doing business caused banks to migrate from a vertical structure to a horizontal one.
Vertical banks were not concerned with competition because they knew that the customer was “tied” to their services due to the difficulty of migrating from one institution to another. But this is a thing of the past.
Turning the key to a horizontal structure significantly increases competitiveness, and that competitiveness generates innovation and scalability, which provides higher quality service and reduced costs. Open Banking will bring this to the banking sector—benefitting the consumer above all others.
How to do this?
DT + UX
Design Thinking is the methodology that guides our transformations. Through it, we can rethink, understand, and dive into our customers’ needs and challenges.
Design Thinking is in our DNA provides us with an in-depth understanding of our clients’ businesses, helping us achieve increasingly efficient results.
DT provides an overview of all the components necessary to deeply understand the individual through analysis, which will generate inputs for much more aligned and strategic decisions.
Aligning DT with UX, we can design behavioral studies to map diversity, direct the client approach to the right path, and maximize profits.
The challenge of leaving Run the Bank for Change the Bank lies in the employee. For this transition to happen, they need to be at the center of the business value chain.
The employee must connect to the company’s transformational process. They are the connecting link between the customer and the company, the enabler, the great protagonist.
The difference is in the way the company relates to its employees.
How to do this?
Agile Mindset
Currently, we live in the VUCA – Volatile, Uncertain, Complex, and Ambiguous world. This concept makes more and more sense in our current scenario.
Investing in new and different ways of thinking needs to be at the center of everyone’s strategy to generate greater satisfaction among employees. Agile Methodologies provide a fundamental turning point for this mindset.
This process will directly impact training, productivity, autonomy, determination, and integrity. It will generate more quality in products and services for the customer. And more satisfied customers bring higher profits to the investor.
Companies must connect empathetically throughout the consumer’s journey.
Understanding the stages of the client’s life cycle and their niche market makes it much easier to create a proper solution. And that’s where technology comes in, or rather, the techniques.
UX, DevOps, Blockchain, Data Science, IoT, RPA, Data Lake, and Big Data are just a few examples of technologies that will provide:
Systemic availability
Interoperability
Modularization of services
How to go about this?
Analytics / Devops / APIs / Blockchain
There is no way for a company to be competitive without Data Science and Analytics.
The MJV LAB provides end-to-end solutions, from ideation to IT implementation, through Data Science and Analytics. We operate from the client’s initial understanding of the construction of future scenarios, developing smarter technologies and operations. Data always guide us.
Development x Operations
Development and operations are opposite sides of the same coin in the IT department. The former needs agility to implement continuous improvement in processes. The latter is more conservative and expects minimal changes in the production environment, to avoid agitating process instabilities.
DevOps solves this problem. Using Agile as a framework, the methodology optimizes IT results by integrating development and operations areas.
The market developed and evolved the concept of APIs. And Open Banking came to allow its full integration.
Many companies are digitizing their business with APIs, aiming to create new business ecosystems, add new features, as well as expose and distribute their core business.
Open Banking talks directly with APIs because its premise is that they are open. In other words, the ecosystem is no longer just a business, and it becomes everyones.
Beyond cryptocurrencies
Blockchain’s use fits perfectly with the reality of Open Banking by putting data and cybersecurity in perspective.
Blockchain is a technology-based on a distributed system. It’s an online transaction system where the network itself is the validator, just like the relationship between math and cryptography.
This solution is continuously evolving and should be used more intensely very soon.
The regulation will guarantee accessibility and systemic security and is a vital issue for Open Banking.
From the moment that customer information (the financial portfolio) can be shared, a security protocol must be transmitted.
This exchange can only take place according to the customer’s wishes and authorization. See GDPR.
How to toe the line?
Privacy by Design
Integrate privacy into the creation and operation of new devices, IT systems, network infrastructure, and even corporate policies.
The development and integration of privacy solutions in the early stages of a project identifies possible problems early to avoid encountering them in the long run.
Any action that a company takes that involves the processing of personal data must be carried out with protection and privacy.
In practice, any department that processes personal data must ensure that privacy is incorporated into the system throughout its life cycle.
Privacy by Design: think about data privacy when designing processes, products, and services
Turn the key right now!
Yes, the rules of the banking sector are changing. The entire financial ecosystem is undergoing a profound transformation. Now is the time to take your first steps towards making this change in your institution.
Change the Bank will change several interactions – including how we relate to money. Therefore, the need to think about new business models and new financial products has never been higher.
It is necessary to rethink strategies and change your mindset to operate a change process and become an organization that connects companies to their customers.
Change the Bank is the best strategy for this moment, and its major turning point is the shift in focus on the financial system. The center of the business strategy becomes the customer.
It is time to restructure your strategy – into a more humanized, digital process, that truly connects with its users and collaborators!
