By James Walter, CEO and co-founder of Finagraph
It’s widely known that most banks are reliant on technology that is 20 (or even 30) years old. Due to a variety of security concerns and being sluggish to pay for upgrades, financial institutions are usually seen as one of the last adopters in the technology world. However, what if the key issue is not the actual age of a bank’s infrastructure, but rather a question of whether this outdated technology supports the current business model of the bank? If banks aren’t using technology that supports their business model, they may be doing more harm than good, and in the process losing customers. Meaningful technology that meets the needs of customers and merchants can offer real value.
What is meant by ‘meaningful technology’? Firstly, there are customer-facing apps and software that will greatly enhance the customer experience—not just for individuals, but for commercial customers who seem to have been left behind in access to bank products and services that increase ease of use. From digitizing and automating lengthy forms and application processes to providing borrowers with real-time updates with where their company finances stand, big data, the cloud, software-as-a-service (SAAS) applications and similar advancements make it easier for institutions to upgrade without a corresponding hardware overhaul. Business intelligence, forms automation, and industry analysis allow bankers to: 1) have an accurate view of where commercial customers’ accounts stand, and 2) offer customer-focused products and services that were previously unavailable or deemed too costly to implement.
Cloud-based Software-as-a-Service (SAAS) options provide increased transparency and key data points and insights that would be nearly impossible to keep track of manually. This allows banks to remain competitive not only by increasing economies of scale, but providing profitable commercial customers access to online tools and forms. My own company is not the only financial technology provider that is offering cloud-based products – big names like Cisco are getting into the area of cloud financial management, helping customers lower IT costs and increase transparency.
Of course, in implementing any new system or technology, there are barriers to overcome. Privacy and security concerns are top-of-mind for many bankers when thinking about cloud-based software in particular. Fortunately, financial software providers usually offer stringent data encryption as a feature. Encryption essentially makes data unreadable to anyone who doesn’t have permission to unlock it.
In today’s competitive banking industry, it’s imperative that banks implement technology that supports their business model and meets their customers’ needs. Ultimately, the efficiencies and value created by organizing and capturing customer data to better advise customers optimizes engagement and helps banks’ to increase their bottom line.
James Walter is the CEO and co-founder of Finagraph (formerly BBC Easy), an automated financial intelligence tool that provides advanced analytics and data verification to financial institutions and their commercial lending customers.
Read the full article here: http://zone.tmcnet.com/topics/articles/351565-simple-tech-upgrades-improve-bank-profit-margins-market.htm.