Equinox Consulting

Analysis – Digital transformation challenges in European Private Banking

Fadi Lahoud at 2015-11-04 in Décryptage

Code Halo

Refers to the digital information surrounding a person or an organization. Every digital click or swipe, for example, to buy, leave a comment, search for information or open an application, produces data that creates a unique virtual identity.

For more information : http://www.cognizant.com/code-halos

For more than 5 years, European private banks have been facing margin shrinkage, multiplicity of regulations as well as banking secrecy unravelling, along with increased pressure on offshore sites. The global financial crisis and customer confidence crisis vis-à-vis the banks have driven regulators to demand more transparency and hence, have led to significant investments in bank information systems.

The computerisation and digital wave, considered as the third industrial revolution – which began in the 80s and should spread over the next 20 years, is bringing about major changes in customer behaviour, in particular that of Generation Y (« Millenium »), owing to rapid adoption of digital technologies. This translates into a demand for new services which are met by new competitors, coming from outside the traditional banking sector, who rely on major pillars of current digital technology: Social, Mobile, Analytics and Cloud (known as SMAC).

In order to not miss the boat of transformation and keep in the race, banks shall integrate the SMAC StackTM in their future business model, so as to offer friendly customer experience in line with the promise made. Moreover, interweaving regulatory constraints, as part of financial flow monitoring for anti-money laundering and financial security, are now compelling the banks to acquire as much customer knowledge as possible by levering what Cognizant calls Code HaloTM.

In addition to customer approach transformation, banks will also have to tackle a related and equally important topic … that of information security, since the current – mainly proprietary – infrastructures do not allow to cater to this requirement. The complexity and necessary investment will lead the banks, as well as other industries, to reflect on the question of resource mutualization, in order to build shared infrastructure that guarantees the security of each stakeholder’s information at a limited cost.

To delve deeper into this topic, please go through Cognizant’s « Digital Transformation in European Private Banking » (Cognizant reports 2015).

 

Fadi Lahoud fadi_lahoud

Associate Director

Wealth management

 

Image source : application Oddo Banque Privée – Oddo et Cie

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