Consumers are seeking greater personal control and financial empowerment in their banking activities, and are increasingly using multiple banks to achieve this.
This is according to Finastra experts, who were speaking during a recent webinar held in partnership with ITWeb.
Paula Zuccotti, ethnographer, trends forecaster, visual artist and producer of the study: "Real people and their banks: Journey to financial empowerment", said the study pointed to people trusting traditional banks, but also using challenger banks for their day-to-day transactions. “Many people, when they refer to banks, mean branches,” she noted. She said many survey participants felt frustrated and disempowered by bank branches. In contrast, challenger banks with user-friendly digital channels made consumers feel empowered by offering them information and the ability to control aspects of their banking – such as setting their own transaction limits.
Mary Connor, Retail Banking Product Management at Finastra, said: “What we have seen at Finastra is that you can only deliver this kind of relevant and meaningful experience with modern technologies and digital capabilities. COVID has been an accelerator of demand for digital and open banking capabilities. Because a lot of established banks have legacy systems behind the scenes, they don't have connected processes that enable those meaningful and relevant experiences to their end consumers.”
She noted that challengers were unencumbered by legacy and were able to quickly find niches and deliver the meaningful experiences consumers want. However, traditional banks are upping their game, she said.
“What we're seeing is an upswing in demand for modern technology and digital capabilities and we're doing this with Finastra’s Fusion Essence, providing this sort of meaningful experience by way of our digital engagement layer and also with our open banking capabilities. We complement this on the digital front end with wallet chatbot and Islamic capabilities.”
Mary Connor said an example of the success of using advanced digital platforms to make banking more relevant to consumers was Ethiopia's Awash International Bank. “Less than two months ago, the bank went live with the latest version of Fusion Essence, and within around six weeks after going live, they had doubled their Islamic banking account numbers. This is because they are now providing the kind of capabilities that really appeal to their end consumers, and this is what next-generation banking can deliver for banks. It enables banks to deliver insights to their customers, put them in control and give them freedom. If banks do that, then they remain relevant.”
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