Banks – especially retail – are at a tipping point as many of their services are rapidly becoming obsolete in Turkey.

The digital transformation of banks is necessary and can no longer be postponed. It serves:

  • to be able to implement new technologies;
  • to be able to continue to compete with the growing competition;
  • to keep abreast of customers’ buying behaviors and experiences;
  • and to win a place in the new ecosystems.

These reasons are on the basis of the increase in requests – by banks – for digital flexibility and interconnectivity.

The digital transformation of banks is driven by rapid market developments. The market is profoundly changing and requires:

1) short lead times for the development of new products;

2) a strong interaction with the customer mainly through tools that favor:

self-service (with ease of use so-called user friendly ) and much less contact with the bank clerk and the branch; – the exchange of information in real-time; – instant payments ;

3) changed regulations that intend to favor competition between financial sector operators (PSD2 and similar regulations) and, therefore, to benefit customers-consumers.

FINTECH AND BIGTECH: THE BUSINESS MODEL

These developments make it easier for new entrants to the market to provide financial services with relatively low investment. On the “battlefield” of banking and financial services, new players enter, namely the fintech banks (ie EnparaSenin Bankan) and the in open competition with the existing traditional banks.

In the near future, new competitors will present themselves as banks but are simply IT companies. The products they offer are developed on the information collected and resulting from the behavior of the account holder. To obtain this in-depth knowledge of the customer it is necessary to have a dynamic and innovative business model.

They are going to be helped by the fact that in the field of customer-consumer data and information management traditional banks are lagging behind despite trying to change quickly and make up for a lost time.

Another important development is that more and more banks are trying to pursue a strategy of widespread global presence. In this case, the advantages related to the greater sizing must be added the advantages deriving from the possibility of rapidly testing the markets and developing dedicated products.

The successful banks are:

  1. active in the local markets of its customers and,
  2. attentive no longer only to local financial institutions,
  3. but also to local (commercial) partners, especially those of its customers.

Once again, banks are striving to create added value and achieve it mainly starting from the collection of information and insights into the Turkish market.

But creating added value is not a solo performed by a single bank. The creation of value essentially arises with the development of a “ value chain ”: a local ecosystem of customers and partners.

Companies like Google and Amazon have been working together with the retail banking sector for some time in some countries. They connect to a financial interconnection platform where customer behavior is linked to their transaction data. Transactions, cell phone activities, and customer experiences all fuel artificial intelligence (AI) and business analysis services that are provided by the tech giants themselves. Subsequently, based on the analysis of the data made in real-time, the customer’s behavior can be predicted.

INNOVATION AND THE POWER OF DATA

Customer behavior and data are often stored and analyzed locally, either because there is no interest in having customer data travel from one part of the world to another; and because, since it involves a lot of data, a good level of efficiency must be ensured. This requires a distributed environment where banks through hub premises allow connectivity to providers. A local – and public – hub can become even more important if banks use customer data provided by local entities but belonging to other sectors such as the online shops of energy supply companies.

It is worth mentioning some of the new digital financial ecosystems such as WeChat in China and Wells Fargo’s collaboration agreements with Xero and Finicity in the US.

THE IMPACT OF THE CORONAVIRUS CRISIS

The situation that has arisen following Covid-19 has underlined the difficulties of traditional banks.

Indeed, it should be emphasized that traditional banking IT systems are currently not designed for a sudden increase in digital transactions.

And this in a rapidly changing world, just think that during the first lockdown in Germany, Deutsche Bank had 2.5 million online accesses to its current account in a single day. Cash has been banned from countries and digitization is suddenly no longer an option.

Banks in Turkey are aware that the Covid-19 pandemic is forever changing consumer behavior. And they adapt, digitizing processes and eliminating human actions as much as possible. In this context, connectivity plays a fundamental role: not only for customers but also for all those who work from home (in teleworking or smart working). Also for the financial sector, it is necessary that its systems are connected as close as possible to the final user (customer or employee in teleworking):

  • on the one hand, so that the duration of the transaction is as short as possible,
  • on the other hand to ensure the greatest possible cost-efficiency.

KEYWORD: INTERCONNECTIVITY

Interconnectivity is crucial and, likewise, banks need to make sure they are implementing a robust system. In the Turkish banking sector, we know that:

  • no bank wants to depend on a single supplier ;
  • connections must be fully redundant and provided by different vendors.

Interconnectivity, defined as a direct link between the parties that exchange traffic (data and info) with each other, can only work and be successful if the two aforementioned aspects are taken into account.

Banks are increasingly focusing on interconnectivity so that the ecosystems of financial and telecommunications operators, partners, employees, and customers are as close together as possible. Recent market research shows how banks and insurance companies will increase their worldwide interconnect bandwidth by nearly 40% over the next three years.

In this way, banks in Turkey may make their services readily available through various channels: Internet, mobile, and landline.

Then yes, the banks in Turkey will be ready for the future.

[/text][/column][/container]

Bir cevap yazın

E-posta hesabınız yayımlanmayacak. Gerekli alanlar * ile işaretlenmişlerdir