Covid-19 has accelerated financial services' digital transformation initiatives

"The pandemic has highlighted just how vital digital transformation initiatives are to the present and future of business, said Hans Tesselaar, Executive Director of BIAN.  

"If we look at the financial services sector, for example, we saw just how quickly the use of cash declined. Stats showed that the use of cash halved because of fears over cash potential harbouring the virus. The lack of choice now means the portion of the nation who favour cash will be forced to shop and bank online.  

"Banks will need to play a vital role in ensuring that the demographic of cash-first users can navigate this digital world. They will also need to ensure that their systems can withstand the additional activity. At such a difficult time, customer experience will be paramount to a bank's success both now and in the future. The coronavirus has forced a lot of changes to our everyday lives. I expect, when we start to recover from this pandemic, that many of these changes will stick, including our continued use of digital services."  

This aligns with the fact that 37% of professionals believe the changing of customer demands will drive the most significant change of the next few years. This is followed by Open Banking (24%), the development and implementation of AI (14%) and the adherence to regulation (5%).  

When we look at Open Banking, it is clear that the initiative and regulation has already had a tremendous impact on the financial services sector. The poll revealed that 72% of those asked are already benefitting from Open Banking. A further 22% are currently investigating the impact it will have on their business.   

The success of Open Banking has also contributed to the growing concept of Open Finance. A term described by KPMG as "the extension of Open Banking data-sharing principles to enable third party providers to access customers' data across a broader range of financial sectors and products, including savings and investments." The research found that over half (53%) of respondents believe there is a demand for Open Finance in their country, based on the success of open banking.  

"Open Banking is transforming the financial services sector for both businesses and consumers. A recent publication by Open Banking UK shows that the users of open banking enabled products in the UK have doubled in just over 6 months and stands at 2 million now", said Arnab Mitra, Programme Manager at BIAN.  

"It has enabled FinTechs and banks to provide enhanced customer experience, increased access to data and services while providing customers with the opportunity to increase their financial wellness. Open Finance attempts to take Open Banking to the next level, with the possibility of broadening the scope to savings, mortgages, pensions, investments and insurance policies and more"  

Tesselaar added "to make the most out of the opportunity presented by Open Finance, banks, technology providers, FinTech players, academics and consultants must collaborate to define a revolutionary banking technology framework that standardises and simplifies the overall banking architecture. Through greater collaboration, we are able to future proof the industry, weather any storm that comes our way, but we need to control the costs".