COVID-19 may have slowed down much of the world, but that hasn’t been the case in the financial industry where customers have increasingly moved online. Banks have been forced to throw their original digital transformation timelines out the window, adapting to customers’ new digital demands almost instantaneously.
Moving at speed has always been a challenge for large financial institutions. Given the scale of operations, making changes in a secure way is not an easy task. Meanwhile, pressure is being applied by fintech challengers, who don’t suffer from this same problem of scale, and who attract customers by focusing on the experience they offer.
So how can traditional banks compete?
I believe the key lies in balancing what I call “the golden triangle” – product, experience, and security.
The importance of security to an SME can not be underestimated. With 60% of SMEs failing within 6 months as a result of a cyber-attack, these are businesses that can’t risk operating with a financial services provider that doesn’t make security a priority.
Security – the basis of customer trust – has always been an important part of a bank’s offering but has typically been regarded as a stage in the process rather than a starting point. What I’m talking about here involves a shift of mindset, from risk adverse (“we won’t do this, the risk is too great”) to risk first (“how can we do this in a way that keeps customers safe?”).
By positioning attitude to risk as something central to innovation – rather than a box ticking exercise required for regulation and compliance – products can be marketed as both innovative and secure. Risk becomes a core design principle, and by leveraging their strengths, banks create a critical point of differentiation from their tech first competitors.
This mindset shift doubles down on banks’ existing expertise, but also requires some self-examination to determine whether they can move at the pace required by the market. Where this is not the case, smart partnerships with companies who can deliver security at speed should be sought. In 2022, it will be the financial institution that can demonstrate balancing the golden triangle, while ensuring that they can bring relevant products to market at speed, that will win the overall share of wallet.
by Linda Minassian, Managing Director – APAC at Pollinate