Agility — The new currency for success in Financial Services

It has been an exciting week for the financial markets across the globe and Asia hasn’t been any different. Financial Institutions have not been spared the market volatility, and their digital transformation through adoption of open source innovation was the crux of what I shared in a Bloomberg Asia radio interview earlier this morning.

In this digital age, the meaning of banking has been redefined and the playing field has expanded beyond one’s imagination. Banking services such as payments, money transfers, remittance, and even personal loans are available through peer-to-peer (P2P) apps, QR codes and other innovations. What’s interesting is that the force behind this accelerated industry transformation is not the competition among incumbents and newcomers; instead, it is the fast-evolving consumer lifestyle that calls for more constant innovation in the financial services sector. The secret to winning for financial institutions today no longer lies just in competitive interest rates and promotions offered, but the delivery of exceptional customer experiences.

Banks in Southeast Asia, Hong Kong and Taiwan are responding to this by rolling out mobile banking applications that offer always-on, real-time banking services. Indonesia’s Bank Tabungan Pensiunan Negara (BTPN), for example, is now allowing customers to access their bank accounts and conduct simple banking transactions anytime and anywhere they want through its mobile apps. To further elevate the user experience, one of the apps comes with a fingerprint authentication feature and allows users to customise their user account with their chosen name. 

However, deploying one or two mobile apps isn’t enough to guarantee that a financial institution will continue delivering exceptional customer experience in future as customer demands keep changing and competitors will continue providing new services to differentiate themselves. This calls for financial institutions to anticipate consumer needs and be agile to develop and deploy new applications faster. To do so, financial institutions need to leverage DevOps, microservices, and cloud – all of which have roots in open source.  

In Singapore, we are seeing that DBS Bank has immersed on a digital agenda with the belief that the banks of the future will look fundamentally different from the banks of today. From re-architecting its technology infrastructure to transforming its front end, DBS is seeking to become digital to its core. One of their steps to achieve this is by integrating their legacy infrastructure on one unified cloud platform by leveraging open source. This has enabled the bank to build new solutions and deliver enhancements to existing applications at a faster pace, as well as quickly scale their services when necessary.

The financial services industry in the region is quickly catching on the idea of open innovation too. Regulators in the region are actively encouraging financial institutions to adopt application program interfaces (APIs) as the foundation layer for innovation. Heeding this call, regional banks have opened up access to their data through APIs to enable partners and FinTech startups to integrate the bank’s products and services when building new applications that aim to improve customer experience.

Financial institutions also need to plug into the open source ecosystem, in order to participate in disruptions as soon as new technologies emerge. In a world of innovation, planning is dead. The traditional model of “plan, prescribe and execute” is no longer relevant, because the human ability to predict the future is less reliable as the world becomes faster, more ambiguous and more complex. What is important is to have an agile approach towards the changing business needs and demands. In the ultra competitive financial services marketplace, agility has now become the universal currency for financial services players looking to adapt and thrive.