Universal Banking: Navigating digital evolution and the future of banking

Written by Siobhan Byron EVP Universal Banking
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As the banking industry continues to evolve, accelerated by the rising need “to be digital”, banks need to redefine their value proposition - appealing to the needs of more digitally savvy and demanding customers who want a better, more integrated and tailored banking experience.

To deliver the future of banking today, banks need to embrace transformative technologies. By doing so, they can leverage advanced, next-gen core capabilities coupled with the ability to seamlessly integrate APIs quickly and easily. This enables them to launch new products and services while growing revenue streams by attracting new customers and creating brand loyalty.

For financial institutions offering retail, commercial and universal banking services, replacing and embracing new core banking technologies will be of utmost importance in order to stay ahead of competitors and provide differentiated customer experiences.

Challenges faced by the banking industry

One of the most pressing challenges is the rapid evolution of customer expectations, driven, in part by the way that big tech companies are constantly moving the needle in terms of how they deliver for customers. As a result, customers’ digital needs are changing. They expect more seamless, more convenient, and more personalized banking experiences - across more touchpoints. Not only will this ensure a core value offering to customers, but it will also keep banks competing among other industry players.

The relationship between a bank and its customers will also be reconfigured, shifting away from traditional client-bank relationship management to be more focused on digitally powered platforms that support greater self-service. This shift allows customers to bank more independently as well as benefit from more bespoke financial services and solutions. At the same time the cost of delivery will be reduced, enabling banks to do more with less.

Another pertinent challenge is the growing limitation of legacy systems. As market demands increase and evolve, traditional banking models built on legacy core banking systems will no longer be able to support new digital demands.

Cumbersome, outdated and legacy core banking systems, will restrict financial institutions’ ability to rapidly develop and deploy new products and tailored experiences. Their inflexible and fragmented nature hinder innovation-driven scalability. Moreover, such legacy systems are hugely expensive to maintain, taking valuable resources away from creating new products, services and targeting new segments to support growth.

Here’s some good news though. Financial institutions have a number of options when considering modernizing their core banking system. They could consider a symbiosis strategy where they can roll out a new core banking system alongside their existing core and migrate their customers over time. This minimizes the risk to the organization whilst providing them with the next-gen core banking capability coupled with the ability to launch new products and services.

How digital transformation is changing the banking industry

The acceleration of digital transformation shows no signs of abating, and banks need to clearly articulate their strategy to understand what opportunities they need to focus on to drive growth and the associated digital platforms that will facilitate this expansion. Inaction, a lack of clear strategic direction, or simply or kicking decisions into the long grass will only result in further delays, increased customer and colleague frustration and an ever-greater risk of competition stealing ever more precious ground.

It has become a business imperative to adopt digital-first service offerings in order to compete against new entrants and market disruptors. Plus, it is core to retaining customers. Banks may find themselves needing to diversify their offerings to a global customer base as the industry moves towards a more interconnected way of doing business.

Such advanced technologies, as well as the growth of open finance and open banking solutions, are democratizing data access and payment services, placing pressure on banks to modernize their solutions while delivering data-driven and value-adding services. As more and more data becomes available, extracting these valuable insights and delivering more personalized customer experiences will become a competitive differentiator.

Another great shift will be the bank and customer relationship, which is becoming more transactional every day and financial institutions need to find a way to become more relevant to customers. Integration of advanced technology is a positive as customers will reap the benefits of automated processes, easier platform integration and functionality, as well as compliance processes. On the service side, banks can leverage their streamlined services to continue building strong customer relationships.

Building stronger relationships enables you to build wider banking relationships and cross-sell services - especially if a more integrated, core banking platform offers real-time execution capabilities. Customers who are already making the shift (if they haven’t done so already) to become more digitally empowered will expect their financial institution to do the same.

Rise of integrated, end-to-end digital banking solutions

As we know, rapid digital evolution and the increasing importance of open finance will be core to the shift toward end-to-end banking platform services and solutions. But how can banks prepare for this transition?

The adoption of integrated, end-to-end digital banking solutions will be integral to supporting a transition to digital-first banking. Such solutions need to be customizable and highly flexible, offering seamless interoperability and scalability across touchpoints. Furthermore, financial institutions need to accelerate their efforts toward fostering collaboration among a network of partners while embracing new avenues of growth that are centered around data-sharing and customer needs.

By participating in open banking ecosystems, banks can access a wider range of products and services, and expand their market reach while also delivering customers with tailored and seamless experiences across digital channels.

To feasibly support this transition, financial institutions need to consider partnership opportunities with fintechs. Engaging the agility and expertise of fintech partners can assist banks in their large-scale transformation as technological deployments that can be implemented as quickly and as efficiently as possible.

For universal banking providers, this collaboration is particularly important. If you’re also wondering how financial institutions offering universal banking products and services benefit from integrated, end-to-end banking platform services and solutions, know that its scale of operations and cross-channel touchpoints alone make it a mammoth task when transitioning to digital-first processes and service offerings. What’s more, the strategic support needed to address the varying expectations and demands of their international market must not be underestimated.

At Finastra, we offer next-gen universal banking solutions that help banks unlock opportunities through an open, cloud-based ecosystem. This is powered by our retail and commercial banking software solution, Finastra Essence.

Key features and advantages of Finastra Universal Banking

Finastra Universal Banking offers integrated, next-gen end-to-end banking platform and software solutions that meet the fast-evolving needs of retail, commercial, universal, and community banks, as well as credit unions.

We understand that universal banking is sophisticated and constantly evolving. Therefore, our end-to-end solution offers broad functionality and advanced technological capabilities. This combination ensures that financial institutions can adapt to rapidly changing market conditions and customer expectations while also leveraging innovative scalability at speed.

Our solution utilizes open APIs to adopt emerging banking systems and tools in order to facilitate growth while ensuring compliance requirements are met, and a unified customer experience is provided.

In the fast evolving digital banking era, data protection is essential to maintaining the trust and integrity of customers, as well as meeting compliance regulations. Ensuring standardization across the business, we assist financial institutions meet their regulatory requirements while seamlessly integrating new systems with existing ones. Our deployment flexibility is a standout feature. Regardless of whether you wish to deploy on Cloud or on-premise, we can support your digital transformation.

In summary we offer solutions that contain rich, broad and deep functionality because banking is sophisticated. And we offer solutions that leverage advanced technology because banking is evolving.

Transform your banking experience. Leverage the advanced capabilities of Finastra Universal Banking today.

At Finastra, we understand the importance of satisfying the demands of digital-savvy customers in a rapidly changing digital world - all while supporting financial institutions growth objectives and supporting a seamless banking experience.

Are you ready to reimagining banking for your customers and ignite business growth with Finastra Universal Banking? Get in touch for more information.

Written by
Siobhan Byron

Siobhan Byron

EVP Universal Banking

Siobhan oversees Finastra’s Universal Banking business, including market leading core banking and digital solutions globally. She has deep technology industry expertise, and more than 25 years of experience in IT and channel management, as well as leading and growing prominent technology companies...

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