Bank's Performance and 2025

As in the last two articles, I am focused on reforming and reorganizing the financial system since, by 2025, the system will have changed entirely. Banks are currently facing severe problems that must be addressed as quickly as feasible. In my last article, I discussed significant issues and why fitness is so crucial for banks. This article will cover three different regions of the bank’s performance until now and what opportunities are coming by 2025.

Australia Banking

Australian banks are revitalizing their digital-first strategies by laying the groundwork: creating an open, scalable, and efficient infrastructure that allows them to design and manage hyper-personalized consumer experiences.

By 2025, Australia will have achieved 20% of retail transactions through mobile, with 90% of customers open to mobile purchases. The usage of AI for client management is anticipated to enhance revenue by 20% in retail banks and 15% in wealth management. The Big 4 will continue to control 80 percent of Australian banking assets. Moreover, according to reports, half of the Royal Banking Commission’s recommendations would not be implemented by early 2021. Banks will deploy “renewed” consumer engagement methods as quickly as feasible.

Banks are required to be masters of consumer data aggregation by Open Banking and associated rules. Banks may use AI/ML technologies to actively forecast previous behavior, ushering them into the realm of smart and intelligent banking. It entails actively designing client journeys and offering hyper-personalized involvement continually.

The cornerstones of the architecture of client interaction apps include refactoring to microservices, separation from core banking systems, cloud readiness, and an open API-based system. The design will be ideal for the bank’s distinct digital-first approach. Banks should permit a two-speed design that combines the best of the old and modern.

The post-pandemic environment will necessitate new customer-financial-services provider interactions. By competing successfully in time-sensitive sectors, there is a potential to gain new business (e.g., account opening, loan approvals). Banks will also need to collaborate with fintech and other third parties to boost consumer engagement by delivering bundled products and services to strengthen the connection.

Vietnam Banking

The retreat of fintech and prospective disruptors has benefitted incumbent banks, allowing them to establish loyal client bases and long-term businesses before the next generation of fintech emerges.

Mobile transactions in Vietnam are anticipated to rise by 300 percent between 2021 and 2025, driven by increased mobile payments. Banks have re-invested in credit risk and asset-liability management, bolstering lending capacity. Lending will rise by double digits every year beginning in 2021. New digital rivals continue to threaten 30 percent of Vietnamese banks’ operations.

As banks respond to rising loan demand, digital lending is a significant focus. As risk management expenditures are completed, banks will compete in speed in the early stages of the lending lifecycle – sales start and origination. In a digital age, the bank is no longer the exclusive generator of value for its customers. Today, competitive power is derived by establishing solid relationships with other players and adding or sharing value. Vietnam has jumped ahead in the mobile channel.

Any bank’s growth strategy includes a strong emphasis on mobile engagement. They can succeed sooner since they do not have as many legacies’ software and business procedures to maintain as banks in other regions. Vietnam will pioneer new mobile payment, gaming, and customization methods.

Philippines Banking

In 2020, the Philippines will have the highest rate of digital banking adoption in the ASEAN region. In the following years, the tale will strengthen digital connections as banks compete for product share-of-wallet.

Two digital banks have witnessed a significant increase in new clients and are anticipated to boost their customer base by at least 80% every year until 2025. Six of the top ten banks will create their digital banking brands, providing two “faces” for digital in the market. Unbanked and underbanked sectors in the Philippines are anticipated to drop by half to about 20% of the bankable population.

With the BSP’s publication of rules for digital banks, more new entrants will be looking to capitalize on the untapped potential for payments and lending. Banks are anticipated to co-create features with fintech and stronger-than-ever telecoms to increase distribution and availability of financial products. Sixty percent of bankable clients are eager to switch to additional digital players.

Banks should offer one-of-a-kind products designed for a fast urbanizing yet underserved banking sector. New lending and payment solutions (micro-loans, personal loans, buy-now-pay-later, microinsurance) can help to strengthen client relationships. Banks will have the underpinnings for being data-driven companies after investing in new core systems and surrounding engagement channels. Banks will be able to combine new and existing data with improving product offerings. To provide financial services inside an ecosystem, data can be exchanged to and from third parties.

Summary:

In the above article, I focused on three markets only due to limitations of words per article. In the next article, I will conclude three more different markets and summarize which market is ahead or stand out. The main aim is to create awareness about changing the system rapidly; we should start restructuring our system; otherwise, we will no longer be in the race. We should understand that we cannot achieve targets alone; we should collaborate with other tech experts.

I appreciate my followers sharing your point of view related to topics, and you can also suggest to me new subjects in which you’re interested, so I will try my best to share my experience on that topic.