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Bring in the automation and innovation to stay ahead of the curve!

As we now operate in an environment which continuously changes every single day, it has become crucial to be ahead of the curve or being left behind says, Vadim Kulik, The deputy President and Chairman, VTB Bank Management Board. As the 2020 was a challenging year to every industry, it was difficult to predict the future and what came with it.  Banks which did not adapt technology instantly lost their competitive edge. And in 2021, we can see the competition stakes raising even more.

As we see the banks all over the world, including Russia, are moving away from being the traditionally defined positions, to tech companies. This might not be the strategy of every bank, but it certainly is showing how far the industry has revolutionized and the direction to which it is heading in the future.

A completion, Covid-29 pandemic that intensified the Russian banking sector was the technological innovations, as it became a battleground. There has been a significant development, for the past 20 years with the global practices and it quick adoption of the upcoming techs. This initiative has certainly been driven by the customers and their increased urge of using their smartphones for every activity and the internet, to which the IT ( information technology ) systems are getting adapted to in an increased digital world. As it is impossible to truly determine when we actually will be post –Covid, so the banks must not be looking this as a solution for everything. The speed of the technological development has increased, and this will continue swiftly throughout 2021. A number of strong technological trends developing in the financial market will form the digital-transformation strategies of the banks in Russia and across the world.

Open banking is changing the game, since it is has the potential to transform the rules of finances and transactions. In 2021, it is expected to have a steady shift of focus from meeting the regulatory supplies to sharpening the ability to utilize existing tools for profitable gains, finding new associates and optimizing these tools to meet the needs. At VTB, importance of developing the API (application programming interface) technology that fast-tracks the outline of new products and services within the bank, as well as abridging and automating the connections of partners from various segments, including insurance and retail, to VTB services, has been thoroughly recognized. Vadim shared that, in the year of 2020 they were able to successfully launch their first comprehensive savings-management service for users of Yandex, Russia’s leading technology company, with clients being able to access a range of premium-quality investment and savings products. This was just an example of how the banks could utilize the power of tech and open banking systems to improve the experience for the customers across many services.

Next up is the embedded finance which will become the key in 2021 as banks look forward in providing financial services on the customer’s terms at any time and any place. By using these embedded-finance tools, customers can incorporate payments, debit cards, loans, insurance and even investment tools into almost any user experience.

To conclude, Vadim said that now, in 2021, we must all move another step forward, take this dexterity and combine it with digital transformation and revolution. By doing this, we will truly modify the banking’s look, for years to come.  

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Tech

AI role in customer experience in banking

The concept of banking first sprung up around 8000 BC. Then, there came various drastic changes to expand their services and innovate their business models. Artificial Intelligence (AI) and Machine Learning (ML) are applied to help banks and financial institutions nowadays. A survey by the Economist Intelligence Unit (EIU) showed that 77% of banking executives believe that the use of AI will ultimately differentiate between winning and losing banks.

This pandemic has triggered a sudden socioeconomic shift from physical to digital. There is a rapid switch to digital channels. Recent research by YouGov was conducted in June 2021. And that revealed that digital services have become the de facto way of conducting business and access services during the pandemic. EIU’s survey showed that enhancing the user experience through better personalisation ranked first in the most valuable uses of AI.

Customer propositions are no longer fit-for-all. It involves both banking and non-banking products and services. To identify the customers’ needs the banks must take an entirely new approach to innovation. They should adopt a customer-centric view. This starts with understanding the customer needs. AI makes it much easier to analyse customer preferences. The redesigning of customer loyalty program gives banks an accurate understanding of customer. Effective personalization offers customers not only better leads but also a more unique experience. The customer experience can be improved by applying AI. Banks must also build out their capabilities to strike new partnerships.

Businesses across all industries are working hard to retain their customers, including banks. AI can become a banking institutions’ superpower. This can take the customer experience to new heights, resulting in happier and more loyal customers. It will also reduce a bank’s operating costs and enable increased revenue per customer. To become AI First, banks must focus on streamlining their technology layer. They also require a strategy to engage customers through channels owned by them and their non-banking partners. Business and technology must work hand in hand, with cross-functional teams breaking up organisational silos.

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Amazon to offer insurance to UK businesses

The technology giant’s first foray into business insurance in the country, broker Superscript said that Amazon is going to start offering insurance to small and medium-sized UK business customers. Members of Amazon’s Business Prime program will be able to buy cover from superscript such as contents insurance, cyber insurance and professional indemnity insurance. Superscript spokesperson said that those would be underwritten by major UK insurers. A discount of 20% will be offered to current rates. This is to entice the businesses over to them.

50% of customers are prepared to buy insurance from non-traditional players. A recent survey of 12,000 people globally by consultants Capgemini showed this. Cameron Shearer, co-founder and CEO of Superscript, said in a statement that the insurance industry needs to bridge the divide between insurers and customers. Amazon’s move into UK business insurance comes after U.S. insurtech Next Insurance said that it was offering cover to U.S. small businesses. And that too via Amazon Business Prime. Molly Dobson, Country Manager for Amazon Business UK & Ireland, said in the statement that as the businesses come out of the pandemic, they want customers to have the best-in-class tools to run their business.

Financial institutions are worried that tech firms will steal their business. But industry sources said that the insurers and tech firms are more likely to forge partnerships. Because of the given difficulties and expense for outsiders in entering the highly regulated finance sector. Amazon also offers warranty insurance and “buy now, pay later” services in Britain.

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In NFT fantasy soccer game, SoftBank leads funding

Blockchain-based fantasy soccer game Sorare has raised $680 million. This is through a funding round, which is led by SoftBank. According to the company, it includes players such as ex-England international Rio Ferdinand and Spain’s Gerard Pique. Paris-based Sorare said that the investment valued the company at $4.3 billion. Sorare is an online game, since 2018. Here players buy officially licensed cards that represents soccer players. They can build teams and play against each other. This is based on the players’ performance in real-life games.

The cards are traded in the form of non-fungible tokens (NFTs). The market for NFTs has seen major growth in 2021. Michel Combes, president of SoftBank Group International, said that they think NFTs represent a new paradigm in the collectability, usability, and engagement with assets. This evolution from physical assets to digital assets is very powerful. This also creates a lot of exciting potential business models. NonFungible.com is a website that tracks NFT market data. According to them, Sorare is the largest sports-based NFT platform by sales volume. They are planning to open an office in the United States. So that they can expand into other games out of Sorare.

Nicolas Julia, CEO and co-founder of Sorare said that they saw the immense potential that blockchain and NFTs brought to unlock a new way for football clubs, footballers, and their fans to experience a deeper connection with each other. They believe that this is a huge opportunity to create the next sports entertainment giant. Since January 2021, there have been $150 million of sales on Sorare. The fundraising round was SoftBank’s first time investing in Sorare. SoftBank’s Latin America fund also contributed. Other investors in Sorare’s raise are such as venture capital firms Accel and Bessemer Ventures, Pique, Ferdinand, Antoine Griezmann and Spain’s Cesar Azpilicueta.

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