The digital age 





























Graham Bright, the Head of Compliance and Operations at Euro Exim Bank, gives his thoughts on the digital challenges facing financial institutions post-crisis The current pandemic-induced crisis is yet to reach its peak and is leaving a trail of personal and economic destruction. What does this mean for the fintech in terms of opportunities and which sectors will emerge? The COVID crisis has had a profound impact on the credit market with many lenders withdrawing mortgage products and tightening risk policy. But with short term removal of stamp duty on house sales, demand for credit is returning and presenting a real opportunity for product diversification and disruption for traditional lenders. Alternative finance providers, underpinned by innovative financial technology, have seen significant increases in client base and ability to make faster lending decisions. Digital services have created channels to marketplaces of financial services that customers can dip in and out of according to their current needs and future plans, whether this be a savings account or car insurance, accessing the most suitable product from an expansive portfolio selection. This enables all players in the financial ecosystem to offer sustainable services which are crucial for customer retention and with opportunities for up and cross-selling. The pandemic has highlighted again that the holy grail for financial services is being able to attract, add value and retain customers in a cohesive way. Core to all of this is technology, the digital savvy consumer and partnerships – with these three ingredients financial services companies can meet client expectations and create enduring long-term strategies for success. The future of payments was already transforming, as new entrants enable the market with new technologies; such as contactless payment, NFC enabled smartphones, cloud-based PoS, and digital wallets. How do you see this trend continuing? Technology is impacting payments in two ways. First, it’s creating demand for a very different type of payment network. But also, it’s creating the toolkit with which banks and payment providers can create a much better payment model globally. In that new world, only the most fast-adapting innovative organisations, whether they’re banks or payment companies, will succeed, leaving slower companies behind. The change in payments has only just begun and those organisations that lack the agility to adapt at speed to the transformation to come, risk being left behind. Dependency on fiat currencies such as USD and Euro will reduce, where more nation-states are interested to launch their own digital currencies to retain control of economic policy. Regulators will step up their powers to police the payments process with harsh penalties forcing international consensus and standardisation on data privacy, greater roll-out of digital ID, improved financial inclusion and more global inter-connected payments networks. As usage of cheques and cash diminish, cross-border transactions facilitating trade, with real-time payments will become the norm, with change coming faster than ever. There is an awareness of the need for financial inclusion in rural and remote areas of countries. Indeed, the World Bank says globally 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services. How do you see digital technology as an enabler to bring people into the financial system? Digital technology is not only the enabler but the vital component to bring financial services finally to the masses at an affordable price point and applications fit for the 21st century. And this is not just about payments, but providing real financial inclusion, with access to cost-effective investment, pensions, deposits, loans, insurance, mortgages, especially in economies where loans are not collateral backed. What is the impact of the US election on fintech and global trade? As the sun sets on Trumps ‘America first’ isolationism and nationalism stance, a Democratic Biden presidency may just be the provider of renewed economic stimulus, trade collaboration and diplomacy that the world needs in these challenging times. We expect more investment, with a desire to eliminate inefficiency, opening new trade opportunities in a collaborative approach with alliances and long-term mutual benefit. Throughout the COVID pandemic, fintechs have shown that they are not just disrupters but robust, dependable and invaluable players in the financial system. Is it time for a re-think in the way we describe technology-led financial services firms? It took an earlier financial crisis to see the emergence of fintech companies. From 2008 it was necessary to improve processes, providing systems which afforded a better view of credit, tighter security, more control over automated dealing systems, and above all oversight, new entrants were able to scope what the financial world should be, even if the incumbent players were playing catch up. However, the finance sector still needs ‘significant events’ to spark firms to review, budget, and implement new technologies. A financial services firm without capacity, cash flow, connectivity, loyal client base and trusted digital apps is not viable in today's dynamic, regulation filled, non-standard world. It is important to consider how the current crisis will impact society for years to come. What are your thoughts on the digital challenges facing financial institutions? Our lives will never be the same. Use of credit cards and on-line access for home-based workers and the public in general has increased, whilst the acceptance of cash has markedly declined. The digital age has opened more opportunities for development and growth than ever before, and this has to be embraced by financial firms and their clients to ensure long term sustainability. As the high street is decimated, large chains going into administration and liquidation, the primary cause of failure seems to be the lack of foresight in assessing the impact of going digital with on-line internet channels, investment in digital delivery and blindness to the changes in consumer buying habits. For banks, branches are in decline, and the momentum to supply fast, trusted mobile and smart phone apps, with the ever-present threat of bad reviews on social media. This makes the role of IT and roll out of digital strategy all the more pertinent, with the necessity to improve speed, access and cost of payment mechanisms to meet burgeoning unprecedented consumer demand. This demand also challenges the banks to adopt a new mindset, business approach and innovative technologies to take their services to the next level. Success in tackling these challenges relies on customer trust and loyalty, where key factors to consider include: Constantly changing customer expectations Ability to switch brand, bank, supplier etc in moments Variety of digital platforms transforming consumer choice and spending Major challenges to implementing successful financial projects include adherence to complex regulations which constrain large-scale transformation initiatives, rethinking the workforce of the future, the talent pool, and traditional risk-averse cultures clashing with high-risk pursuit of innovation. Financial institutions are all too aware that digital transformation is no longer a ‘nice to have’ but a critical enabler of a financial institution’s strategy. The ultimate success of digital strategy must be a board-led process designed to achieve both business and organizational transformation. By revisiting business models, focusing on customer needs, experience and preferences, constantly rethinking the brand, and delivering new opportunities through digital channels, linked with evolving the corporate culture, embracing remote and new ways of working, and building capabilities and alliances around ecosystems that are truly suited to our new normal, institutions can safeguard their business and look forward to long term sustainability.
Our lives will never be the same. Use of credit cards and on-line access for home-based workers and the public in general has increased, whilst the acceptance of cash has markedly declined

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