Challenges: Fintech and Financial Industry - Forcing a Restart

Everything is going according to plan till 2019; organizations created 5-to-10-year business plans for their enterprises. Unfortunately, due to the pandemic, all programs and strategies failed. A new work environment has been implemented, and the company has suffered dramatically due to the epidemic. We are all impacted both mentally and physically, but everyone understands and accepts the circumstance after a while. With new tactics, the company is expanding once more. The e-commerce business is growing and producing income. Every system has been altered.

Online transactions are becoming more common in the financial sector. Before 2019, the use of Fintech and digital banking will have increased by more than 90%. This sudden growth in utilization will alter the banking industry's tactics. Because of the ongoing epidemic, many banks are evaluating their digital transformation initiatives and strategies. With the impetus for digital transformation resuming, there is a renewed emphasis on customer involvement beyond physical branches and customer call centers – by integrating technology and analytics across the client's financial life. It all comes down to become even more customer-focused and platform-oriented.

The banking industry faces some significant challenges that force them to restart their banks with new planning related to customer demand. Let us discuss the challenges below: 

Redesign Digital Transformation

Banks are rethinking their digital transformation initiatives. Each transformation road map has always been distinct. Still, this is becoming more diverse in the post-pandemic environment, based on the bank's environment and the opportunities it sees in the recovery cycle. In a short amount of time, a complete realignment of customer interaction projects will be done.

Competition Starts

By 2020, 63 percent of Asia Pacific banking clients were willing to move to neo banks or new digital rivals. Customers stayed with conventional incumbents as the economic effect of COVID-19 grew. The number of challengers has shrunk somewhat. The ostensible fintech innovators were themselves disrupted.

New rivals with better post-pandemic proposals will emerge. By 2025, the area will have 100 new competitors, with at least two digital banks in each Asia/Pacific market posing a significant challenge to incumbents.

Quality Matters Most

As I previously stated, because of pandemic consumers, transactions and interactions are increasingly becoming digital rather than physical. Banks are having difficulty delivering excellent service due to the high volume of client demand. Asia Pacific banks scrambled to meet an average of at least a 50% increase in digital transactions. As a result, banks are struggling to deliver a high level of quality in these interactions. Therefore, banks should also prioritize the customer service department.

Increase Your Speed

Sometimes we should take the risk to meet the ongoing demands. Risk-taking is a significant factor in every sector. Banks had to focus on bringing the risk as they had to meet needs rising due to pandemics. There is a temporary slowdown in implementing innovations and setting up better digital platforms. They should speed up their programs to enhance their digital media. Banks have to prioritize risk to respond to the crisis. Governance, risk, and compliance (GRC) expenditures in technology increased by double digits in 2020/2019, at the detriment of other investment sectors.

Hunt for Customer Insights

Banks are struggling to understand the customer data. They are not getting accurate data regarding their customers. As a result, banks could not come up with a view of the actual state of the customer in 2020. With debt moratorium programs in place and historical data utterly different from the new realities of 2020, banks struggled in coming up with a current and accurate view of the customer. Customer data is a significant factor in planning new programs or troubleshooting. Due to the lack of availability of the actual state of customers, banks are facing difficulties.

Summary

The key obstacles faced by the banking sector in restarting their planning and strategy for building a digital platform are listed above. If banks want to be in the market till 2025, they must take significant actions fast. The next five years will be crucial for the banking sector. Customers' objectives and wants have shifted; if we can satisfy their requests in less time, we will remain in the industry.

I hope that this article may contribute to your understanding related to the challenges we are facing today. I'd appreciate it if someone shared their opinions and experiences with us in the comments so that everyone gets the benefit.