ARMONK, N.Y., April
24, 2017 /PRNewswire/ -- IBM (NYSE: IBM) this month
identified their five essential qualities for banks seeking to
thrive in today's increasingly digital and cloud-first environment.
Like many other industries, the established players in banking are
constantly facing changes and new competition. These challenges
stem primarily from on-the-cloud start-ups and agile FinTechs, a
group of businesses that Moody's Investor
Service estimates as high as 4,000-strong worldwide and
on the receiving end of $19 billion
in venture capital funding.
As banks face this environment, they must adopt a cloud-first
disruptor mindset. Industry players must recognize that cloud
technologies will help transform how they access and understand
their customers. New entrants are causing a massive shift in client
expectations, putting pressure on incumbent banks to innovate and
deliver cost-savings at record speed while meeting each of their
regulatory requirements.
Working with financial services industry clients worldwide to
drive business transformation, cloud and AI strategies, IBM has
detailed five key elements that banks must embrace as they move
towards a cloud-first mentality:
1. Become more agile by delivering cloud-based capabilities.
By migrating to a dynamic hybrid cloud, banks can achieve greater
capacity, efficiency and integration than what is currently
possible with legacy on premise infrastructures.
2. Deliver adaptive, personalized customer experiences. This
is something that FinTechs are doing well and sets a bar for
traditional banks. A recent IBM Institute for Business
Value study shows only 30 percent of customers surveyed
believe they're getting a personalized customer experience, even
though 45 percent of bankers surveyed believe they are delivering
one. We believe that robust predictive analytics based on big data
are a key technology enabler for banks to deliver personalized
customer experiences.
3. Extract more insights by accessing data that is currently invisible.
Financial institutions collect massive volumes of data, but much of
it is unstructured, which makes it invisible to older systems.
Cloud-based cognitive computing not only analyzes all this data,
but understands, reasons and learns from it to continuously
improve. For example, USAA has gained insight into their customers'
needs through predictive analytics that can recognize life events
in time to provide services and offers, while a large Swiss bank
has cut attrition by 66% on customers where analytics has
identified their attrition behaviors in time for the bank to
react.
4. Create a data savvy culture. Banks
have a wealth of digital data that can provide unique insights into
creating value for the individuals and businesses they serve.
Establishing a culture where this digital data is combined with
other sources via cloud based services can be used to better
understand the challenges that clients face and help create the
personalized experiences they expect. Advances in analytic and
cognitive technologies also dramatically simplify and accelerate
the discovery of actionable insights.
5. Embrace cognitive and AI. In
addition to cloud, banks should also be prepared for changes as the
use of cognitive computing and artificial intelligence continues to
grow. Financial institutions have recently turned to these
technologies as a platform for maintaining a competitive edge and
the trend is just beginning. Banks such as Banco Bradesco are
working with IBM to augment existing services by utilizing AI, with
the goal of providing better and faster customer experiences.
Challenged to provide the new experiences clients expect, banks
are competing for relevancy on their own turf. In a world comprised
of FinTechs, the consequences have clearly had a direct impact on
innovation. To thrive, we believe that banks must radically reduce
costs to invest in the business and operating models that can
unlock data and create powerful new experiences for their
customers.
IBM recently announced its IBM Cloud for Financial
Services, which is bringing together essential technologies such as
cognitive and blockchain for developers to create and monetize apps
for the financial services industry. Developers can access new
tools to build in customer insights, security, privacy and support
compliance readiness to help reduce the time needed for development
and testing. APIs from both IBM and partner FinTechs are available
on the platform.
About IBM Watson Financial Services
IBM
is working with organizations across the financial services
industry to use IBM Cloud, cognitive, regtech and blockchain
technology to address their business challenges. Banking, wealth
management and insurance are some of the areas poised for dramatic
change by using cognitive and AI capabilities provided by IBM
Watson Financial Services.
For more information about IBM Watson Financial Services,
visit https://www.ibm.com/watson/financial-services/.
IBM Contact:
Christina Trejo
848-702-4607
Christina.Trejo@ibm.com
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SOURCE IBM