These Ideas Will Help the FSI Industry Bounce Back

These Ideas Will Help the FSI Industry Bounce Back

The banking and finance sector today is dynamically changing at a fantastic speed never seen before. It begs the question – how would the next generation of financial services look like? It’s true. Transformation does not occur overnight, but in small, incremental phases.

It will be fueled by an explosive combination of rigorous regulations, investor capital, globalisation and futuristic financial technologies.

Nevertheless, it is equally evident that technological innovation is at the centre of this lightning-fast changes we’ve been seeing of late. Still, what fascinating developments will the next decade bring?

Here are some ideas that will help stimulate growth in banking and financial services:

Reach Out to the Unbanked

The World Bank Report states that over 1.7 billion adult individuals across the globe have no account with any financial or mobile money provider. About half of these unbanked individuals live in developing nations such as Indonesia, India, Nigeria, China, Mexico, Bangladesh, and Pakistan. High-income economies, on the other hand, do not have significant numbers of unbanked individuals as nearly everyone owns an account.

However, statistics also show that about 1.1 billion unbanked adults globally have a mobile phone. Therefore, these mobile phones can be used to access mobile money accounts and other financial platforms. This presents an enormous opportunity waiting to be tapped.  Paired with internet access, there is a huge opportunity for banking institutions to drive financial inclusion.

Statistics reveal that about 1.1 billion unbanked adults globally have a mobile phone. These mobile phones can be used to access mobile money accounts and other financial platforms. This presents an enormous opportunity waiting to be tapped.

Still, these financial services should be designed for unbanked users, many of which are poor, disadvantaged or lack adequate literacy and numeracy skills. The technologies created for these groups will help eliminate the obstacles limiting unbanked individuals from using financial services. Furthermore, providing services to the unbanked will no longer require travelling great distances to meet a need. As such, digital technology will help lower the cost of transaction. Most banks and financial institutions have one core objective – to reach the greatest number of customers possible. Given these facts, it is clear that the unbanked market will be actively pursued in the years ahead.

Get Serious About Blockchain Technology

Blockchain is another trend that will grow in the next few years. About 48% of banking executives in a survey by Business Insider Intelligence stated that AI (artificial intelligence) and blockchain will have the most decisive influence in the growth in the financial sector. No doubt, blockchain will shake the industry globally. As Blockchain drives the new ideology of substituting centralised processes for decentralised finance, it will inevitably drive change in financial systems worldwide. Already, it has led to the creation of a diverse online peer-to-peer (P2P) financial system for monetary dialogues in a decentralised manner. This distributed ledger technology, which gave rise to cryptocurrencies, can help transform existing processes and systems remarkably.

Many cryptocurrencies have been created, and many more will be “mined” soon. Already, several countries are creating their own cryptocurrency. Such a move could significantly push the shift from fiat to cryptocurrencies.  The shift will, in turn, boost coin stability, drive the creation of regulatory frameworks, and make people gravitate more towards decentralised transactions. In fact, some financial institutions are already exploring blockchain technology to uncover how it can help cut costs, improve internal processes and increase efficiency.

Speed up Development of RegTech

Technological innovations present tremendous opportunities. However, the finance industry is heavily regulated. It is essential to realise that technological innovation has also given rise to diverse challenges, including data breaches, cyber hacks, and other fraudulent activities. RegTech was created for this purpose. It involves using innovative technologies to manage regulatory processes in the finance sector. Some examples of regtech include real-time tracking of airliners’ locations and automated monitoring of a company’s compliance with sustainability regulations.

However, even as technology companies, legislators and other stakeholders in the finance industry, work closely together to spring regulatory innovations, it will still take some time before everything comes into fruition. One such example is the implementation of biometric authentication for financial transactions, which has met strong opposition after a high profile data theft case that happened in the US. Notwithstanding this incident, recent studies show that the size of biometric authentication market is fast expanding. By 2023, biometric authentication is expected to have over 2.6 billion users.

 

Can Technology Spur Growth in Finance

Can Technology Spur Growth in Finance?

The finance and banking industry is under an increasing pressure to create new strategies and cutting-edge solutions using data, analytics and artificial intelligence. To improve customer experience, it is necessary to implement programs that will contribute to faster and smoother transactions.

There used to be a time when customers were impressed by the prospect of being able to resolve disputes and financial queries in the comfort of their own homes. Today, customers demand lightning-fast response and resolution. They no longer have the patience to wait a minute longer than necessary, which presents a considerable challenge and opportunity. Customer service is mostly driving chatbot development within the financial sector. Backed by AI and Machine Learning technologies, chatbots can help financial institutions reduce costs and meet the ever-changing needs of their customers.

Gartner’s report states that in 2020, chatbots will handle about 85% of customer service-related affairs. This is because it reduces the cost of two-way communication systems,

such as phone and email. Chatbots inspire conversational interactions and can aid financial companies to offer an outstanding experience to their customers. Chatbots can personalise these interactions and present solutions as though they are happening in-person, which help meet and exceed the customer’s expectations.

Some traditional institutions have been using bots for quite some time to deal with simple issues. However, today’s chatbots provide a lot more. They can help detect and mitigate fraudulent actions, offer financial tips to customers and help customers make informed decisions.

Some traditional institutions have been using bots for quite some time to deal with simple issues. However, today’s chatbots provide a lot more. They can help detect and mitigate fraudulent actions, offer financial tips to customers and help customers make informed decisions. For the best part, these bots help financial companies have smart and effective conversations with millions of customers within seconds. Therefore, it drastically reduces the cost of customer service while creating great interactions with their customers.

Another important aspect to look at is the integration of Big Data into core processes. Big Data presents a huge opportunity to harness actionable and relevant insights from increasing piles of data (credit/debit card transactions, money transfers, ATM withdrawals) created daily by the financial sector. These insights can be transformed into strategic opportunities, which can help any financial institution stay competitive and meet future demands.

Big Data helps financial institutions harness deeper insights about, for instance, their customers’ purchasing habits. This, in turn, enables real-time business decisions about better ways to serve their customers. It can also help financial institutions make smarter decisions about their marketing strategies, sales management and fraud detection.

Overall, big data can help banks and other economic sectors keep up with emerging trends, streamline internal processes and mitigate risks more efficiently.

What to Expect in Retail Banking Technology in 2021

What to Expect in Retail Banking Technology in 2021

Many people envisioned that the 2020s will be a decade of ground-breaking digital banking transformation, seamless innovations and technological advancements that greatly improve user experience.

These advancements are geared towards helping banks decrease cost-income ratios, increase return-on-equity ratios and improve their efficiency through and through. For example, Open Banking, which allows third-party applications to access bank accounts, is adding tremendous value to all parties concerned. Such systems have created an opportunity for companies like Apple, Facebook, Google and Amazon to compete favourably by splitting the value chain into manufacturing and distribution.

Due to the effects of COVID-19, consumer demand for more flexibility and control are driving the need for new tools and technologies.

Banks are now tasked to create new strategies and innovative solutions using available data, digital technologies, novel delivery platforms, and transactional and behavioural analytics.

Future retail banking trends are expected to improve customer experience by facilitating faster and smoother transactions. Here are a few trends expected to disrupt and shape the retail banking industry in the year 2021:

Banks will need to be proactive in recognising the changing needs of customers at the exact time they need them, as having the right products and services will no longer be enough.

1. Artificial Intelligence will drive a shift in the business model

Stakeholders in the banking industry believe that Artificial Intelligence (AI) will be the most consequential technology in the sector.

They expect that AI will play a huge role in creating an improved and personalised user experience, supporting new businesses and in strengthening portfolio management through the use of advanced investment algorithms.

Furthermore, banking executives are optimistic about using AI in fraud detection and improving back-office functions to trace anomalies in future business plans.

Business executives all over the world have invested heavily in the development of artificial intelligence. This massive investment was done to strengthen cybersecurity, curb cybercrime and prevent a breach of data.

The viability of AI depends on its expandability. Regulators require that banks must only use explainable AI. EU’s GDPR, for instance, has introduced a “right to explanation” mandate to guide AI algorithms and other new technologies.

If AI denies a customer loan, for instance, it is necessary to explain to the customer what the reason for this decision is, guide them on alternative ways of sourcing for what they need, or help them solve this problem.

2. Banks will overhaul business models to create digital ecosystems

As new banking technologies come into existence, banks have been changing their business models to be in tune with current trends. They have had to extend their most vital services from strictly branch operations to the internet and mobile banking, thereby providing more access and control to customers from any location. Basically, only the mode of access to banking services has changed. The banking services, on the other hand, did not change.

The digital ecosystem model adds more push to these changes. Ecosystem banking model is based on intuitive self-leading software which studies customer needs and integrates them into banking to create offerings that provide solutions to these needs. Just as mobile banking brought banking to customers’ fingertips, ecosystem brings human needs into banking. It is built on cloud, open APIs, explainable AI and other critical elements of modern banking technology.

3. There will be an increased expansion in Open Banking

Open banking is a banking initiative that allows third parties access to a bank’s APIs. While many people think that open banking is a European issue, the reality is that it is a derivation from traditional business practices that allow third parties to access banking data and functionality. Open banking is also called banking-as-a-service, banking-as-a-platform, open APIs, and API banking.

Open banking seeks to help financial institutions ease the burden of providing customers with seamless financial services without the usual hassles. Fintech companies and other retail banking institutions are already taking advantage of the API banking ecosystem to ease financial hassles involved in making and receiving payments, buying homes, and general financial management. This trend is expected to advance in 2021 and beyond.

4. Wider Acceptance of Real-Time Financial Products

As digital banking accelerates, there will be an increased need for real-time financial products. In 2021, real-time payment is expected to be the norm. Creating real-time experience will no longer be a challenge to the banks. The new challenge would be in creating ways to better compete with other banks in real-time payments.

Real-time payments will rely significantly on APIs. As such, the retail banking community can play a central role in putting up robust and innovative real-time transaction services that will attract individual customers as well as fintech companies.

As digital banking accelerates, there will be an increased need for real-time financial products. In 2021, real-time payments is expected to be the norm.

5. Always-on Invisible Banking will become the Norm

Invisible banking refers to the new trend where financial institutions can integrate their financial services into their customer’s everyday life. Direct deposit is an example of invisible banking.

Today’s technology-driven, always-on world is one where business opportunities appear and disappear in just a snap. Experts believe that in the nearest future, banks will need to be proactive in recognising the changing needs of customers at the exact time they need them, as having the right products and services will no longer be enough.

A Unique Opportunity

Banks are struggling to keep up with the effects of the pandemic, the dynamism of the tech world, and the increased operational pressure from customers.

In all of these, however, banks still have their resources and customers’ trust. Hence, if they implement the right strategies, and adapt adequately to the advanced technologies in banking and the digital ecosystems, they will still succeed in the long term. These changes, when implemented, will also help banks cut cost, become more efficient and achieve the required flexibility to weather future storms.

Will Goldman Sachs TxB provide the impetus for transaction banks to embrace digitalization faster?

Will Goldman Sachs TxB provide the impetus for transaction banks to embrace digitalization faster?

With a legacy spanning 150 years in the financial services industry, “our lack of legacy infrastructure in this new undertaking is a crucial advantage for us and a key differentiator relative to the rest of the industry” remarked Mark Smith, Head of Global Liquidity, Transaction Banking at Goldman Sachs. The bank rolled out its comprehensive cash management business to establish itself in the transaction banking industry, thereby introducing new choices for Treasurers

A digital experience from the word go!

Mark Smith, Head of Global Liquidity, Transaction Banking at Goldman Sachs

In an era of digitization, Goldman Sachs Transaction Banking (TxB) – the bank’s transaction services arm – unveiled its cloud-based treasury management solution in June this year. Understanding that the customer today seeks an agnostic approach to banking, GS TxB’s digital proposition is mindful of its clients’ expectations and aims to fill the current treasury gaps. Proof of this is how GS TxB sets up a digital profile for a potential customer at the very first introduction and discussion meetings. This set-up provides potential clients a personalized onboarding experience and establishes a  unique relationship. This further establishes how Goldman Sachs intricately weaves its digital proposition with its customer’s needs.

At the core of GS TxB is its treasury management solution’s unique proposition – ‘Virtual Integrated Account (VIA).’ While virtual accounts  are offered by multiple banks, Mark reiterates how VIA can transform treasury through “instant account opening and closure, flexible account structure creation, liquidity pooling and better reporting. GS TxB’s VIA solution is cloud hosted API driven and real time, thereby further differentiating itself other virtual iaccount offerings. Goldman Sachs built a technology enabled infrastructure combining its platform and products to offer a “single, global, real-time, API driven multicurrency solution suite completely hosted on cloud.” Emphasizing on the need for a consistent customer experience in transaction services, GS TxB’s user-interface empowers treasurers with a seamless banking experience. 

Getting the timing right!

Covid-19 left the world reeling with unprecedented changes.  Mark acknowledged how companies now have to increasingly consult with their treasurers to plan and manage cash and working capital better. A treasurer’s challenges such as visibility into liquidity positions, transparent costs related to transactions, the need for a platforms and interactive user-interface have exponentially grown in the pandemic. In addition to this, Mark emphasizes the need for rich data analytics and actionable insight – a crucial component of TxB’s offering. Reiterating the need for a consumer-centric approach, Mark comments “Goldman Sachs’ has built a consumer-grade experience with powerful features corporate needs. We built our products with a look to the future – we future-proof when we look at our product roadmap. Being on the cloud allows us to be nimble and to innovate quickly.”

Goldman Sachs rolled out its comprehensive cash management business to establish itself in the transaction banking industry, thereby introducing new choices for Treasurers

A clear goal and vision

Rolled out initially to Goldman Sachs’ American MNC clients looking for a differentiated experience, TxB’s team aims to deliver simple yet innovative solutions which span across, liquidity management, global payments and escrow services. With its approach outlined, TxB is poised to achieve its goal of $50 billion in deposit balances and $1 billion in net revenues in 5 years, with Mark commenting “We’ve designed a cutting-edge suite of innovative products that will drive a smarter, leaner treasury.  Finally, we’ve built a cognitively diverse team combining digitally-native talent with subject matter experts to understand Treasurers’ priorities, advise on industry trends and to bring clients solutions that will drive efficiency, transparency and treasury transformation.”

***

>> Read more exclusive features about retail banking innovation and the digital banking landscape. Download the latest issue of The Digital Banker Magazine HERE.

 

Bank of America embraces technological advancements to meet corporate treasury requirements

Bank of America embraces technological advancements to meet corporate treasury requirements

An incumbent in global transaction services, Bank of America has worked towards a simple yet compelling strategy of delivering the best-in-class services amalgamated with rapid digitization efforts. Validating this point further is Mr. Faisal Ameen, Head of Asia Pacific Global Transaction Services, Bank of America who says, “Our approach to innovation revolves around directly addressing clients’ real-life challenges. Our investments over the years have been directed towards developing new solutions, enhancing existing solutions, platforms and associated back office processes, with digitization at the centre of it all.”

Responding to client requests

Mr. Faisal Ameen, Head of Asia Pacific Global Transaction Services, Bank of America

With the global health crisis bringing economic activities to a halt, dialogues ensued between banks and their clients, shedding light on pertinent requirements such as declining working capital and cash reserves underpinned by strained cash flow, varied credit facility requests, and the need for better visibility of treasury operations. With a clear direction, Bank of America is now at the cusp of building its next-generation of virtual account solutions with which it plans to eliminate the need for multiple physical accounts all together thus, achieving higher visibility, reducing cost and improving cash forecasting. 

Further to this, transaction services are time-consuming, requiring heaps of paperwork and approvals which hinders operational efficiencies, slowing down the decision making cycle. Modern transaction banking clients want banks to automate and streamline processes to bring about operational efficiencies to their treasuries. Mr. Ameen delves into process simplification and automation with their Intelligent Receivables® solution, “an invoice matching service which uses advanced scanning techniques, artificial intelligence and machine learning, to match payments to open accounts receivables and has almost 100% data capturing accuracy.” Quick to acknowledge that numerous Fintech companies are also providing similar services, Bank of America differentiates its offering by fully integrating its various automated services with its electronic banking platform – CashPro, a fully integrated multi-channel platform with best-in-class security controls.

Accelerating the move to digital

While digitization has remained a buzzword for the last few years, 2020 saw a multi-fold increase in adoption of digital processes both by banks and its clients. In tandem, the bank also noticed an increased adoption of digital services among clients earlier resistant to digitization. With this, Mr. Ameen also points out that a key area of investment for Bank of America, the CashPro platform, has tremendously paid off this year. In 2019, the CashPro ecosystem geographically expanded, and inducted a multitude of initiatives such as Apple Watch capabilities and a self-service document tool, which ensured a smooth transition for new clients in 2020.

At the forefront of adopting advanced technology,  Bank of America has spent over $30 billion in the last 10 years towards new initiatives.

At the forefront of adopting advanced technology,  Bank of America has spent over $30 billion in the last 10 years towards new initiatives. Embedded in its transaction banking ecosystem across various services lines are the bank’s technological capabilities which deliver payments flexibility, simplification of the operating environment, actionable insights, and management of cyber risks. Mr.  Ameen elaborates on the bank’s technology adoption strategy – “We are actively exploring distributed ledger technology with industry consortiums and other third parties in areas such as global payments and trade finance.” In addition to this, Bank of America is also among the first US bank to join the Marco Polo Network – the largest and fastest growing trade finance network, allowing the bank’s clients access to innovative risk mitigation solutions while improving transparency throughout each transaction lifecycle.

Treading with Caution

With large scale adoption of advance technology and digitization of banking systems, Mr. Faisal Ameen comments – “while the benefits of the digitization are compelling, it brings with it concerns around fraud and cyber security. Increased exposure to these risks especially with the work-from-home arrangement in place, has made our clients far more cognizant of the need for a safe and secure digital ecosystem.”  The pandemic initiated a learning curve in the cyber security space, and also exposed the inefficiencies of the current supply chain financing ecosystem. On a positive note, Mr. Faisal Ameen says, “the pandemic has accelerated coordinated efforts by governments and industry bodies to develop new trade and technology standards. It also provided the momentum for regulators, central banks and governments to reassess legislations and regulations making room for a dynamic and a new banking model that supports end-to-end digitization.”

***

>> Read more exclusive features about retail banking innovation and the digital banking landscape. Download the latest issue of The Digital Banker Magazine HERE.

 

BNP Paribas’s holistic approach

BNP Paribas’s holistic approach to transaction banking unlocks value through innovation and collaboration

Noticeable changes in Asian economies have allowed global transaction banks to  demonstrate significant transformation. In a market as dynamic and fast-growing as Asia, BNP Paribas maintains a strong foothold with presence in over 13 markets. Further as business models transform, BNP Paribas along with its clients  is set to embrace the faster shift favouring e-commerce and online sales. Mahesh Kini, Head of Cash Management, APAC at BNP Paribas noted “transformation has now taken priority and clients are rapidly developing the ability to meet consumer demand using digital channels.” Present across major hubs and emerging ones, BNP Paribas prefers to remain as accessible and close to their clients as possible.

A full-service transaction bank

Mahesh Kini, Head of Cash Management, APAC at BNP Paribas

As a fast-moving and challenging landscape, the barrier to entry remains high in transaction banking as there is a significant technology cost involved to scale the business effectively. BNP Paribas has however made the necessary investments in various platforms over a decade ago and continues to have a strong appetite to further invest in various technologies in order to deliver on its clients’ latest requirements. Today, the bank cash management solutions suite is offered via variety of channels such as internet and mobile banking, host–to-host, SWIFTnet, EBICS and API protocols to further augment the clients’ banking experience.

While efficient measures and systems were put into place to improve and maintain liquidity, a crucial line of transaction banking – Trade Finance was drastically impacted by the pandemic. Largely a paper based business, “documentary credit and collection business in various parts of the world took a hit, including APAC which is an important region for documentary credit transactions, manufacturing and supply chain” noted Stephane Gaboriaud, Head of Trade Solutions, APAC. Subsequently, as transition to digital remains a prominent theme, trade document digitization has gained momentum. Edwin Chan, Head of Transaction Banking Product Management, APAC, noted that “document processing and handling was re-designed to meet Work-from-Home requirements while an accelerated shift towards end-to-end digital documentation is in the works.”

BNP Paribas takes on a collaborative, multi-layered approach to the growing players in the transaction banking space.

Using technology to build effective solutions

Stephane Gaboriaud, Head of Trade Solutions, APAC

Globalization has ramped up value chains and e-commerce activity while creating massive opportunities for technology companies and non-bank players in the global transaction banking space. BNP Paribas takes on a collaborative, multi-layered approach to the growing players in the transaction banking space. As a global bank with proprietary platforms and technology at its disposal, Mr. Kini emphasizes on this further by stating, “BNP Paribas consistently addresses pain point by collaborating with our corporate clients and partnering with Fintechs to find suitable solutions. Nimble FinTech gives us access to the latest technology and innovations, significantly reduce the time to market.”

Prominent themes of most conversation in banking revolve around extensive application of technology and digitalization of process and BNP Paribas sets itself apart by creating an agile and scalable ecosystem for its clients. Significant investment in technology and partnerships allow the bank to offer a dedicated customer service experience. Extensively leveraging APIs across its internal network, the bank is now set to extend its to its broader client base. Approaching one of the most common problems of invoice reconciliation, BNP Paribas is currently developing use cases by leveraging Artificial Intelligence and Natural Language Processing.

Fostering relationships via collaborations

Edwin Chan, Head of Transaction Banking Product Management, APAC

With successful collaborations with FinTechs such as CashForce on cash forecasting, and LianLianPay in China which enables the bank’s clients to access Alipay, WeChatPay, UnionPay networks, while playing an active role in ecosystems such as Contour – a decentralised, digital trade finance platform, and eTradeConnect to guide market practices to move towards digitalization, BNP Paribas has demonstrated exceptional client services by building relationships and going the extra mile to support them and protect their interests in a complex and evolving environment.

***

>> Read more exclusive features about retail banking innovation and the digital banking landscape. Download the latest issue of The Digital Banker Magazine HERE.

Taishin Bank’s evolving transaction services ecosystem

Taishin Bank’s evolving transaction services ecosystem

A one-stop solutions for all transaction services, Taishin Bank (TSB) caters to all customers right from small enterprises to the large corporates. Across all the solutions that it provides, customers primarily look for the services related to cash management and trade finance. A majority of the bank’s clientele consists of large corporates who have operations across the country and the neighboring countries. As a result, TSB launched its state-of-art solution – GB2B, a highly modularized and parameterized corporate internet banking platform and an app which provides a flexible and seamless transaction banking experience to its clients. GB2B is a single platform where both domestic and international conglomerates can access integrated services across liquidity, cash management and trade finance.

A solution-oriented approach

As customers become more tech-savvy and sophisticated, Taishin Bank noted that, customers are far more open to offerings from new entrants and while they expect improved and enhanced services from traditional banks. This served as an impetus for TSB ‘to adopt a solution-oriented marketing approach coupled with their banking experience by integrating the plural financial products and resources’ across their transaction services. The bank stepped up to offer physical and virtual channels to its customers across all lines of the transaction business. However, its diversified clientele enabled the bank to also cater to requests related to trade finance. In trade finance, the bank offers diversified products such as import and export OA loan, letter of credit finance, factoring and so on.

With iHub, the bank’s corporate clients and third-party service providers can seamlessly augment their complementary specialties and offerings to the end customer.

Catering to a diverse clientele via iHub

Staying ahead of the curve, Taishin Bank created a Direct Link API platform – iHub dedicated to help serve its clients’ requirements. With iHub, the bank’s corporate clients and third-party service providers can seamlessly augment their complementary specialties and offerings to the end customer. Keeping in mind diversity of its clients who come from various industries such as insurance, securities firms, e-commerce, Electronic Payment Institutions, manufacturing, food service and leasing, iHub increased the bank’s interoperability through products and services such as interest and FX rate enquiry, account information enquiry, multi-channel payment, multi-channel collection, investment and financial management, SME credit guarantee fund automated application, and so on. Not neglecting the upcoming start-ups and SMEs, the bank created API modules to enable fintechs, ERPs and convenience stores to easily connect to the bank’s ecosystem.

With a first-mover advantage, the iHub platform was quick to create a rich and diverse experience adding great value to the end customer. In addition to its own capabilities, Taishin holds a positive attitude to collaborating with Fintechs/TSPs to drive innovation. TSB partnered with a leading cross-border settlement network in Asia, a start-up which was also accepted in Taiwan’s Regulatory Sandbox, to offer cross-border remittance services for migrant workers in Taiwan. As a key player in the region, Taishin Bank has facilitated interoperability and adapted its operations to encompass the evolving banking ecosystem.

***

>> Read more exclusive features about retail banking innovation and the digital banking landscape. Download the latest issue of The Digital Banker Magazine HERE.

KASIKORNBANK Leading the Way for CX in a Digital Ecosystem 2

KASIKORNBANK: Leading the Way for CX in a Digital Ecosystem

Built on the foundation of ‘Bank of Sustainability’, KASIKORNBANK (referred to as KBank or the bank) delivers products and services to its clients and customers keeping in mind its core values – agility, customer centricity, collaboration and innovation.  To demonstrate their values further, KASIKORN Business-Technology Group (KBTG), an integral part of KBank, provides state-of-art IT infrastructure and services, develops advanced technology and innovation, and designs solutions addressing customer pain-points and requirements. According to Mr. Wirawat Panthawangkun, KBank Senior Executive Vice President, ‘KBank aims at being a smart Data-Driven Cognitive Bank, using data to address the needs of customers in every lifestyle nationwide, with readily available technology for further development.’

KBank’s customer experience won four awards at the Digital CX Awards 2020 by The Digital Banker. The four titles that the bank won are ‘Best Digital Customer Experience in Wealth Management, Loan Offering of the Year, Best Customer Experience – Debit Card and Outstanding Customer Experience – Loans’. In addition to the award wins, KASIKORNBANK was honoured with Highly Acclaimed: Best Digital Customer Experience – Loan Application and Highly Acclaimed: Best Digital Customer Experience in Private Banking. These award wins and acclaims are a testament to KBank’s ability to understand its customer’s requirements and provide the best possible solutions keeping in mind the current digital trends and ecosystems.

The Digital CX Awards 2020 received more than 200 nominations across various awards categories and consisted of a judging panel that included subject-matter experts known for their integrity and unbiased judgment from companies such as Forrester, EY, Fuji Xerox, Bain & Company, Wipro Digital and KPMG.

“Understanding that data is key to remain competitive today, KBank has leveraged smart data and used analytics across various lines of business to improve customer services as well as operational efficiencies.”

Driving customer experience with K PLUS and MADHUB

Guided by principles of customer centricity, KASIKORNBANK products and services resonate with excellent customer experience and agility coupled with innovation. Proof of this is how KBank was quick to respond to the Covid-19 crisis that shook the world.  As a part of its strategy to enhance customer experience, the bank had integrated all its service channels such as K PLUS (mobile banking application), KBank website, branches, LINE official Account, Call Center, and KBank Live (KBank social media). To ensure a seamless customer experience, KBank also linked K PLUS with its partner platforms to help its customer redeem Rewards Points by purchasing products from partner platforms.  An additional feature let K PLUS points be converted into point of other member cards thus demonstrating flexibility in its service.

About a year ago, KBank demonstrated how important all segments of consumers were, when it introduced MADHUB – a hub for online traders to fulfil requirements related to business opportunities and customer needs. The bank’s understanding of the region and current trends led to the development of MADHUB which offered a variety of services to online traders such as tools for inventory management, accounting systems, learning programs, debit card initiatives with offer various discounts, etc.

“KBank aims at being a smart Data-Driven Cognitive Bank, using data to address the needs of customers in every lifestyle nationwide, with readily available technology for further development.”

‘Better Together’ – Leading the way with collaborations

Understanding that data is key to remain competitive today, KBank has leveraged smart data and used analytics across various lines of business to improve customer services as well as operational efficiencies. While using its own data to improve its initiatives and products worked in the favour of the bank, KBank also saw opportunity in partnering with data rich firm to streamline its banking services and potentially carter to a wider customer base. The bank’s collaborative spirit led to it’s partnership with Lazada – one of the largest e-commerce platforms in the world.  An outcome of this partnership was MADFUND (part of MADHUB) – a financing support program designed to carter to needs e-commerce traders, was introduced on the Lazada Sellers Centre app. Sellers who opted for MADFUND could consent to share data and will then be re-directed to K PLUS to complete the loan application in real-time with instant drawdown to their bank accounts. With Lazada, the partnership was a strategic one, where credit scoring and personalised loans where readily available based on each seller’s transaction history and profile on the Lazada Sellers Centre platform.

KBank didn’t stop at one partnership as it understood that customers relied on multiple platforms and the bank was quick to adopt a multi-channel services approach. Mr. Wirawat Panthawangkun, KBank Senior Executive Vice President commented, ‘To meet multiple lifestyle needs of customers, KBank has teamed with leading business partners within ecosystems at both the global and national level.’ KBank’s other partnerships now include Grab, Facebook, LINE, Lazada, Shopee, Central JD FinTech and JD Central – Thai retail giants; and PTTOR – an energy business to name a few. These collaborations and strategic partnerships truly live up to KBank’s commitment ‘Better Together’ which aims to provide an integrated ecosystem of businesses and banks who provide a fulfilling customer experience and journey.

Mr. Wirawat Panthawangkun, Senior Executive Vice President, KBank

Stronger Together

As the pandemic bought economies to a standstill, KBank quickly rolled out a Covid-19 insurance policy.  This policy was available to all its registered K PLUS users free of charge via KBank Live LINE Official Account. The bank’s Covid-19 initiatives continued when its introduced unsecured lending through all its digital channels, ‘Reduction of monthly installment payment, a moratorium on principal payment, suspension of both principal and interest payment, as well as granting of new loans to bolster liquidity for business customers via the soft loan scheme of the Government Savings Bank and the Bank of Thailand,’ said Mr. Wirawat Panthawangkun, KBank Senior Executive Vice President.

Two separate program ‘Generous (Business) Owners – Empathetic Creditor’ – which includes reduced interest rates payable to banks by business owners and splitting the burden of paying salary due to business staffs and ‘Zero Interest-rate Loan to Retain SME Customers’ – with features such as zero interest, 10-year loan term and no fees, were launced to help the bank’s SME clients.  These programs are expected to save up to 56,000 jobs.

Honouring their campaign ‘Stronger Together’, KBank has provided financial support amounting to more than 393,906 million Baht to 80,229 business customers, and 186,850 million Baht to 297,800 retail clients to date.

Image: Quality Stock Arts/ Shutterstock.com

***

>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

US-China Relations Wide Ranging Issues 2

US-China Relations: Wide Ranging Issues, At Risk of Boiling Over

In July this year, the Chinese consulate in Houston had been ordered to close its doors by the US government. This development is just one out of the many conflicts plaguing these two economic giants. Nothing like this has been seen in decades between China and the United States.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly. The most notable ones are as follows:

COVID -19

In some of the interviews granted by Donald Trump, he was heard several times referring to the coronavirus as ‘Chinese Virus’. His reasons lay with his staunch belief that the Chinese government failed to give accurate reports concerning the extent of the damage caused by the disease. He believes that their government simply ignored its duty to report to WHO since the first case of the virus was documented on Wuhan in 2019.

However, China insists that it has been nothing but transparent since the onset of the pandemic. Following Trump’s accusations, the World Health Organization has denied its involvement in supporting the disinformation by the Chinese. In response to this, the United States President Donald Trump formally started the withdrawal process from WHO, making good on his threats to deprive the UN body of its top funding source over its dismal handling of the pandemic.

HONG KONG

Tensions have clocked to a new height between the US and China. Recently, protests arose as a result of Beijing’s imposition of a new security legislation over the previous colony of Britain, which returned to China in 1997.

In response to this imposition, Donald Trump has signed a sanction effectively severing preferential economic treatment for Hong Kong. This move will allow him to place visa restrictions and sanctions over financial institutions and Chinese officials who’d been involved in enacting the new security law.

Predictably, China threatens to counter with a retaliatory move of their own in no distant time.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly.

SOUTH CHINA SEA

Until 2020, the Chinese has always laid claim to ninety percent of the South Sea. Meanwhile, Malaysia, Brunei, Vietnam, Taiwan and the Philippines has actively contested this claim.

Currently, the United States has hardened its stance in the matter, tilting towards the other Asian countries. The US believes that China has plans to build a Maritime Empire in the energy rich sea.

On July 13, 2020, Mike Pompeo, the US secretary of state, issued a statement that accused Beijing of a bully-based campaign and its claim, unlawful.

HUAWEI

The tech company based in China has been added to the US ‘Entity list’ In 2019, the US suspected the company of violating their sanction on Iran and can spy on customers through their devices. This security concern led Washington to add Huawei to its ‘Entity list’

However, Huawei has vehemently denied every one of the allegations and accused Washington of frustrating its growth because no American company can compete with their prices and tech savvy.

Washington has gone ahead to push other countries to drop Huawei, posing the same violations as their reason. The friction between the two has caused a serious decline in their access of Chips and other important parts from their US suppliers.

NORTH KOREA

According to the US, China has breached their sanctions on North Korea. Though Beijing has denied the allegations, tensions continue to rise.

The common goal of both countries is for North Korea to give up its nuclear weapons program and as such, should work together. Yet, that is far from happening. The Chinese government has agreed to lift some of its sanctions over North Korea but the United States does not agree.

Kim Jong Un, the leader of North Korea has met with Donald Trump thrice in an effort to ease the US sanctions but failed to agree every time. While US requires them to give up the nuclear weapons in Pyongyang, North Korea wants all the sanctions, lifted.

Nevertheless, the number-two diplomat, Stephen Beigun remains optimistic. In an interview, he opined that the two countries might still work together in spite of the dispute because of the greater good of ceasing the development of nuclear weapons by North Korea.

UIGHURS

The Uighurs are a minority Muslim group that reside in the western Xinjiang region.

The Chinese government set up complexes in that remote Xinjiang called Vocational training centers. They have been condemned for trying to stamp out what they term as extremism and have the Uighurs acquire new skills within the complexes.

Following the discovery of the violation of Uighur’s human rights, the US has placed sanctions on all the Chinese institutions, officials and companies.

A Better, Safer World

The relationship between the US and China is reaching a dangerous point. The already fragile relationship is on the brink of total collapse and we could only hope that in the coming days, the relationship could improve for the better. People from all over the world are pinning their hopes that the result of the 2020 US presidential elections will provide a pathway for calmer, more collaborative partnership between the two great powers.

As a famous world leader once quipped: “If we cannot now end our differences, at least we can help make the world safe for diversity.”

***

>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

Image: Robert Way/Shutterstock.com

KS thumb

J.P. Morgan Private Bank: The Unique Value of Advice-based Services Model

This year’s Most Influential Female Leader in Asia at the Global Private Banking Innovation Awards is Kam Shing Kwang, Chief Executive Officer of J.P. Morgan Asia Private Bank. In this fascinating interview, Kam Shing shared her most remarkable career achievements thus far, the technologies transforming JP Morgan and the new investment trends that have emerged in the aftermath of the pandemic. Here are the excerpts of our interview.

 

TDB: A sincere congratulations on being named Most Influential Female Leader in Asia at this year’s Global Private Banking Innovation Awards. What is your most memorable achievement in your career thus far?

Kam Shing Kwang

Kam Shing Kwang Chief Executive Officer of J.P. Morgan Asia Private Bank

KS: Thanks for the honour. I am very humbled by the award, this is obviously due to the work from my entire team, who have worked very hard over the past few years. As for my achievements, it’s less about the actual achievements, and more about the journey of working hard and getting something done – this to me is the most memorable and the most rewarding. If there is one particular turning point I can think of, it would be at a very significant stage of my career. When I first joined JP Morgan, I was a portfolio manager focusing on investments for clients. I thought that was going to be my career path, but this job took me from being a portfolio manager to running the investment team and then in 2004, this led me to Singapore to run the investment team for Southeast Asia. Shortly after that, the head of the Singapore office had to relocate, and the opportunities opened up for me to become the head of Singapore office. This was in 2005, and was a very significant milestone and also a turning point in my career, as it opened up all the opportunities for me to broaden my scope beyond investments into business development and strategising for the markets across the region. That was a very significant moment in my career in JP Morgan.

TDB: You seem to be somewhat of a tech enthusiast, which must certainly be helpful given the $11 billion a year JPM spends on technology. Can you talk a bit about specific technologies that are transforming your business and why?

KS: In this current environment, technology facilitates our ability to work anywhere, anytime. It is absolutely remarkable. Mobile devices and different kinds of hardware allow us to access information wherever we are. But, I think it only just dawned on me during this pandemic where, at any one time, we have 97% of JP Morgan staff working from home. So, we’re talking about over two hundred thousand employees completely working from home and processing transactions seamlessly and effectively. This has all been made possible by cloud technology, etc, and I think that is one of the most amazing things I’ve seen.

In this current environment, technology facilitates our ability to work anywhere, anytime. It is absolutely remarkable.

TDB: How has JPM countered the adverse economic impacts of COVID-19, and what advice would you give to businesses navigating these unpredictable waters?

KS: It’s very heartening to hear from our employees and also from our clients. Clearly, our technology and platform have been critical in helping us serve our clients seamlessly and allowing our colleagues to work effectively. The commitment and devotion are simply unparalleled during this period.

One thing that has been extremely helpful and will continue to be particularly important in what we do for our people and our clients is the effort everyone is putting in. So, having empathy is very important for our employees. To think about how they are being impacted by the pandemic, they need to feel safe and secure – this is one of our top priorities. If we prioritise this, we will get there and will allow the entire workforce to work from home.  We put ourselves in our client’s shoes and understand what they need. They need information and require us to truly understand what their needs are. Our ability to listen, and understand this, already goes a very long way. We have a series of digital engagements and as a result, the digital adoption rate has increased a lot and we are now servicing our clients this way.

TDB: What new investment trends would you say have emerged as result of this pandemic?

KS: We see a significant disparity between the winners and the losers during this time. To define that, customers that are able to respond quickly during this period of time have fared well. Technology and healthcare are two sectors that have performed really well. And we’ve been recommending these sectors for a while. More broadly, what we’re sharing with our clients is that innovation is really important. And honestly, the technology that facilitates that. Innovation in this area should look at the way you process and service your clients and any business that is always responsive to new environments will eventually win.

So, we look for companies that have these attributes. We have a strategy about innovation, and it has been doing very well for the majority of our customers in the tech sector. Of course, this goes beyond technology.

Technology and healthcare are two sectors that have performed really well. And we’ve been recommending these sectors for a while. More broadly, what we’re sharing with our clients is that innovation is really important. And honestly, the technology that facilitates that.

TDB: How has business been since the launch of JPMs Trust Company in Singapore?

KS: It has gone well; everything is on track. Especially on the new business side of things. We have started better than we expected, which is great. We’ve been setting up new trusts for many company founders – seeing their companies to IPO. They want to start structuring and planning, so we have set up a significant number of such trusts for founders ahead of their IPOs.

 

TDB: Which products or services help differentiate your firm and what is truly unique to JPM’s Private Wealth offering?

KS: Obviously, it’s easy to talk about product. I’d like to talk about all the products we have – from investment to wealth advisory to credit, and all products that other parts of the bank offer. However, I think the most important thing at the end of the day is advice. And that advice has to be personalised depending on the client needs. I talk about being empathetic. If you have empathy, you can see from the clients’ standpoint on what their needs are. You can give them the right advice and that hopefully comes with the right solutions. So, I’d say, advice is what differentiates JP Morgan and the way we ensure that we give our clients the best advice. Obviously, having the right advisors who are given the right amount of tools is just as crucial too. Most importantly, our global consensus and the innovation mindset will mean that all the advice we give is always timely and holistic.

In the future I think clients will want to pay for advice rather than just products. The force of competitive pressure will drive down prices. So, I think the advice-based services model will be far more valuable.

TDB: What do you think the Private Bank of the future will look like?

KS: I think there are two parts to this, and I’ve probably touched upon both parts. People are going to value advice more and more. What we have seen, especially in Asia, is that certainly, products do play an important role. In the past, clients look at what products you can offer to determine whether you are the right provider. Increasingly, clients are going to see that product can be modified so what differentiates, really, is advice. So, in the future I think clients will want to pay for advice rather than just products. Also, we can see products are being commoditised and being manufactured more efficiently. The force of competitive pressure will drive down prices. So, I think the advice-based services model will be far more valuable.

The other thing is getting digital. Having the most efficient digital platform will be crucial in giving solutions and advice.

***

>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

Images: MOZCO Mateusz Szymanski/Shutterstock.com