Banks will rethink banking from the ground up as part of Banking 4.0 since customers’ level of expectations has become the new disruptor in the conventional economy. This will have an impact on how banks connect with consumers as well as how they handle conventional bank products, procedures, and finance and risk operations.
To compete in the digital era, new technology and talent must be implemented. This generation of banks will serve as a platform for digital services including a broad variety of banking and nonbanking activities.
Banks will evolve from being safe havens for people’s assets to financial partners capable of making tailored suggestions based on their clients’ financial histories, experiences, and preferences, as well as clearinghouses for a variety of partner services.
The strategic priorities for the banking sectors include;
- Seamless Connectivity
- Data-Driven Intelligence
- Operational Effectiveness
- Financial Insights and Risk Control
In this blog, we’ll look at the strategic importance and benefits obtained by the banking sector through the implementation of Seamless Connectivity,
Let’s start by understanding what is seamless connectivity, and there we get our first question’s answer,
What does “Seamless Connectivity” mean?
Banks will begin to work toward this aim by connecting islands of operational and experience data to establish a single customer picture using various technologies (APIs). Banks will then serve and sell items to customers utilizing virtual views across disparate systems and in-memory and cloud technology.
Banks will then construct products for a single consumer that are unique and particular to that individual customer, with product qualities that are driven by experience and outcome rather than product features.
As customers are increasingly expecting their banking platform to provide integrated, complementary, and partnered services and solutions in addition to banking services. In the experience economy, users are looking to banking as a platform for requirements other than financial services.
Impact of “Seamless Connectivity” in the Banking Sector:
Let’s look into two different scenarios, one following the traditional finance service network and the other following the next-gen practices of the digital era
- Firstly, to comply with bank import rules, files are exported and manually altered.
- File and data mistakes proliferate, and human error enters the picture.
- Manually developed IT databases are being used to arrange data for bulk upload at the bank, creating payment processing delays.
- Cash and treasury management access the bank’s business site to update the details.
- Files are manually uploaded to the bank for processing.
- On uploaded files, little, if any, data verification or validation is performed.
- The file format differs per bank.
- Commercial and treasury managers must manually check into bank portals to view payment results days after submission.
- Payment rejections must be manually resubmitted, or file exports and imports must be repeated.
- The SAP Multi-Bank Connectivity solution provides cloud-based connectivity from cash management and treasury applications to banks.
- Using SAP Multi-Bank Connectivity, all parties use a single common communication format.
- There is no need to prepare data for transmission.
- Data transfer directly from a business customer to SAP Multi-Bank Connectivity
- One integration is provided to hundreds of bank members
- Real-time payment and results at the moment of submission
- Data staging and human mistakes caused by manual data modification are eliminated.
- Instant error and outcome notification
- Payment processing complexity is being reduced.
- Improved transparency of payment processing
- Payment processing instantaneous rectification
- Long payment cycles will be eliminated.
Outcome-Driven Values of Seamless Connectivity:
- Direct connection, standard transmission format, reduced complexity
- Elimination of data staging, reduction of human error, real-time payment results
- Real-time payment reconciliation
Benefits of having Seamless Connectivity in the Banking Industry:
- By creating an integrated, multichannel environment, you can attract, develop, and retain customers.
- Analyze client behavior and perspectives in order to give tailored services.
- With the accessibility of data model and implementation provisioning for integration and channel access via standardized interfaces, traditional banking boundaries are being extended to markets and beyond (APIs)
- Provide highly flexible choices.
- Seamless delivery of new banking services.
Customers want their banks to give an experience comparable to that provided by their retail and social media interactions in the experience economy. Banks are reacting with new goods and services that appear, behave, and feel seamless experiences.
These new goods and services have an influence on all aspects of the company, not just the front office. Banks must address E2E procedures across departments and lines of business (LoBs) in order to provide better customer experiences, goods, and services.
Banks must recruit, develop, and retain consumers by providing an integrated, multichannel environment. In order to flourish in the digital era, they must adapt to evaluate each customer’s behavior and point of view.