Fintech. It’s been called the financial services version of the industrial revolution. This wave of financial technology startups secured $12.7 billion in venture capital funding in just the first six months of 2015, according to William Garrity Associates of London. The movement has the potential to displace as much as $4.7 trillion in revenue annually from traditional financial services, according to a Goldman Sachs estimate.
Having begun roughly four years ago as a figurative school of guppies, fintech has grown into a shiver of sharks, each intent on taking a bite from the revenue stream of the traditional banking business model. Meanwhile, the incumbents are hampered by layers of regulatory gill nets.
Suffice it to say, commercial banking is in a tough spot. In the more than 30 years that I’ve worked in financial services, it’s difficult to recall when banks faced challenges on as many fronts.
Yet for all the disruption brought about by fintech, the technology I’ve seen since joining Microsoft leaves me optimistic about the future. Technology such as cloud computing, mobile applications and data analytics could help digital banking reach its full potential, and drive growth and efficiencies over the long term.
As a concept, digital banking has been bandied about in breakout sessions and budgetary planning sessions, and it’s well worth the time and investment — just so long as we don’t lose sight of this fact:
Regardless of demographic group, income level or way of typically conducting banking, customers want an omni-channel experience that’s seamless. And they want to speak with someone who can answer all their questions and take action on their behalf.
Sure, I’m stating the obvious. But for all of the efforts across banking, there’s more work to be done.
Along with improving their soft skills, banks need to provide better tools. This means that portfolio managers can base their counsel on the latest performance data of a customer’s investments, tellers can suggest services that are more informed and reflect a customer’s recent transactions or life events, and branch managers can get better insight into their risk profile and cash reserves to remain compliant.
Microsoft offers a solution to help banks continue delivering on that promise. Microsoft Dynamics CRM provides a holistic view of the customer’s activities and interactions, enabling you to better anticipate their needs and up-level your service. And Windows 10 and Office 2016 offer features designed not only for remote access to information in the cloud, but also to more easily and securely share information.
Consider DenizBank. Based in Istanbul, DenizBank created a mobile branch employee solution that enables portfolio managers to serve all of a customer’s needs at their home or office, just as if they were conducting business within a local branch.
For example, managers can complete a contract, acquire a customer signature and take a picture of it with their Windows 10 tablet and automatically archive everything into the bank’s system. Portfolio managers can also optimize their time with the customer by accessing the transaction history stored in their CRM profile and suggest other relevant services.
Since deploying the solution, DenizBank has increased sales eight-fold, largely because of the immediacy and authority that comes from accessing information instantly and securely.
Scenarios such as these epitomize the potential of digital banking, but developing the applications that power it can cost in the millions, not to mention the investment in manpower.
Windows 10 reduces such workplace and development sprawl through the use of Universal apps, which work on one’s phone, tablet and PC, while also offering Windows 10 touch functionality and integration with Office 365, Microsoft’s fastest-growing commercial product ever.
SunGard Financial Systems took advantage of this capability to create a set of five universal financial planning applications that individual investors can use to develop strategies for meeting their financial and retirement savings goals. SunGard’s financial planning apps are available through the Windows Store and Office 365, and SunGard offers white-label versions for institutional clients.
Joining SunGard in its support of Windows 10 is Bloomberg, which recently announced the availability of Bloomberg Professional service on Windows 10 desktops. With the Bloomberg Professional service, portfolio managers and financial executives can stay ahead of the curve on what’s happening across global business markets; they can use Bloomberg’s proprietary analytics tools and algorithms to analyze multiple scenarios simultaneously, check global pricing information and export their data into one of 300 spreadsheet templates via the Bloomberg Excel Add-in. From there they can develop and execute strategies directly from Excel and share their strategies across the company — and with clients — using Microsoft PowerPoint.
These are just a few examples of how the financial services sector is using Microsoft technologies to cut costs, improve the quality of their service and enable new ways to get things done. And regardless of fintech’s final outcome, that’s really at the core of the digital banking revolution.