There is also immense pressure on organizations to leverage data to be more competitive. HEXANIKA products have been built on the philosophy of solving business challenges by leveraging data in simple, smart and efficient manner.
Banking & Financial Services
The banking and financial services industry is going through a radical shift driven by the following
Increase in regulatory changes in the developed markets
Pages of regulatory documents will be published by 2020
Paid in fines since 2009
$270 billion a year
On compliance and regulatory obligations
Spent on AML compliance
Spent by analysts on data collection and organization, and only 10% on data analysis
Of Institutions identify data quality issues as key barrier
Compliance Officers feel there is not enough time to manage all their compliance needs
Challenges & Solutions
The Fin-Techs are typically targeting some of the most profitable areas in financial services by leveraging most advanced technologies. These new industry entrants are forcing many financial institutions to efficiently utilize technology to automate and consolidate it’s processes. It is also forcing institutions to leverage data wisely.
The objective to do this is to:
- Be competitive
- Leverage new technologies efficiently
- Increase revenue and decrease costs by adopting new technologies and by leveraging data
Business models are rapidly changing to keep pace with competitive pressures. Some of the changes include:
- Reduction in traditional banking products by millennial
- Reduction in customer base
- Big banks and financial institutions leveraging digital tech to start branchless banking
- Mobile Banking: growth comfort of users to do branchless banking
- 100% digital branches: Technology enabling operations from account opening to account maintenance and closing
- Data Driven Banking / Banking on Big Data: Advanced use of data by levering data science technologies enabled by AI and Big Data
Regulatory compliance has emerged as a significant concern for financial institutions, as regulatory fees have increased dramatically relative to earnings and credit losses since the financial crisis.
Ranging from Basel’s risk-weighted capital requirements, Dodd-Frank’s, FASB’s current expected credit loss (CECL), and the allowance for loan and lease losses (ALLL), maintaining strict compliance places significant strains on resources
Heavy Penalties & Fees
Faced with severe consequences for non-compliance, keeping abreast of regulatory changes and implementing the controls necessary to satisfy requirements have resulted in increased cost and risk. Overcoming regulatory compliance challenges requires fostering a culture of compliance within the organization while also implementing formal compliance processes and systems.
Cost of Compliance
Additionally, costs associated with compliance management are also a major factor that is forcing financial institutions to change the way they do business. This combination of factors has led many institutions to create seek efficient data technology and reporting to assist in rationalizing business lines.
Regulations and compliance today are heavily dependent on the ability to correlate data from disparate data sources.
Customers expect personalized and meaningful experiences through simple and intuitive interfaces on any device, anywhere and at any time. By optimizing data, institutions can design solutions that result in increased customer satisfaction and wallet share. The objective of doing this is:
- Customer acquisition
- Customer Retention
- Cross-sale and up-sale of financial products
- Improving Customer Experience
A majority of banks and financial institutions CIOs believe that a greater portion of business will come through digital channels. However, organizations using inefficient, clunky and expensive technologies will not be able to keep up with this increasingly digital-first world. Without a solid, forward-thinking technological foundation, organizations will miss out on critical business evolution.
Technologies like cloud computing, artificial intelligence (AI), machine learning (MI) and Big Data all offer significant advantages for institutions looking to reduce costs while improving customer satisfaction and growing wallet share. They enable firms previously burdened with disparate legacy systems to make thing simple, smart and efficient.
Please see our solution section and reach out to see how we can make life for you:
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US Community Bank
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Community Banking Association
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