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Connected Banking Decoded: What Is It, And What’s In It For Your Financial Institution?

Connected banking is all about bridging silos to create a synergistic, unified enterprise and implementing networked business models to reach a wider ecosystem.

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The financial services industry is being disrupted by the perfect storm of rapid technological advancement, increasing customer expectations, and fast-changing regulatory dynamics. What’s more, financial institutions are also facing tough competition from modern fintechs and digital-only banks. The question is: How can financial institutions turn this disruption into a business opportunity?

The answer: connected banking!

The Future of Banking is Connected!

According to Forrester, “By 2030, banking will be invisible, connected, insights-driven, and purposeful.”1 

Connected banking is all about bridging silos to create a synergistic, unified enterprise and implementing networked business models to reach a wider ecosystem.

A connected bank allows everyone—customers, partners, and workforce—to transact and engage in an orchestrated, omnichannel, and anytime-anywhere manner. With a connected approach, you can enable the end-to-end customer journey, make your operations more agile, and realize sustainable innovation. By accelerating your connected banking initiatives, you can move towards achieving customer-centricity in today’s hyper-connected environment.

Driving Factors for Connected Banking

A connected bank must cohesively operate to address four key drivers:

1. Customer Experience – A frictionless, omnichannel experience can ensure customer loyalty, cost reduction, and increased profitability, enabling you to set yourself apart from your peers

2. Product Innovation – A high speed of implementation is critical for banks, like yours. As is offering products and services oriented toward your customers’ needs

3. Operational Efficiency – A holistic, customer-centric approach enables you to bring speed and agility to your processes, thereby creating an efficient, future-ready bank

4. Risk and Compliance – The standardization of processes and policies, and the adoption of secure technologies, go a long way in helping your bank maintain compliance without compromising on efficiency

The Key Ingredients of Connected Banking

There are four main ingredients that comprise a truly connected bank.

1. A focus on customer-centricity – Customer-centricity lies at the core of connected banking. Your financial institution requires an “outside-in” approach, wherein all your processes, systems, and people are oriented towards serving customers in a cohesive and coordinated manner

2. The customer journey as the guiding compass – Customer journey-driven banking is:

· Omnichannel: Empower your customers and workforce to engage and transact through any channel and to switch channels without disrupting their journey

· Personalized: Enable each customer journey in a personalized manner by understanding customers’ requirements and accordingly offering customized products and services

· Contextual: Serve your customers, without losing context across the breadth of their interaction, by enabling full, authorized access to your authenticated workforce

· Anytime-anywhere: Your customers and workforce should be able to engage and transact anytime, anywhere—even on the go

3. Integrated banking operations: You must bridge your organizational silos by focusing on your processes, content, and communications—the three pivotal components of a connected banking paradigm

4. A boundaryless and extended banking ecosystem: Banks, like yours, must create a boundaryless experience where all involved stakeholders can operate efficiently and without limitations on time, place, or medium, all by using self-service facilities. You must also create an extended banking ecosystem—bringing together merchants, fintechs, aggregators, and more—to increase your customers’ lifetime value

What Does Connected Banking Bring to the Table?

With connected banking, your financial institution can:

· Enable customers to open a bank account 100% digitally, without requiring human involvement or an in-person visit

· Deliver personal loans within minutes, from initiation of the loan application to disbursal of funds

· Facilitate transactions anytime, anywhere, and through any channel, as well as switch from one channel to another on the fly

· Offer deals through an aggregator within minutes or hours of conceiving a campaign

· Transact with partners in real time through 100% digital channels

· Rapidly respond to emerging business needs and launch new products or services within days, or even hours

· Enable scalability while staying secure and compliant

In a Nutshell

Connected banking sets a strong foundation for your financial institution to effectively meet the demands of a rapidly evolving banking landscape. You can empower your employees with relevant information and deliver omnichannel, anytime-anywhere services to your customers. The connected banking paradigm helps your financial institution prepare for the unexpected and continue achieving business outcomes in an increasingly digital world.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Jayant Tandon

Head of Banking Excellence - Newgen Software

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