June 16, 2020

Scalefocus Responds to the Top 4 Digital Banking Trends of 2020 

8 likes

The traditional banking industry is a thing of the past. The digital revolution has transformed the way many of us access financial services, with 21% of US internet users preferring to use neobanks like Moven, Simple Bank, GoBank, MoneyLion, BankMobile and Chime, according to a survey by Finder.com. 57% of the same individuals expressed feeling a greater convenience with digital banking compared to brick and mortar. 

This has forced traditional banks to transform their customer experience into one that appeals to a growing number of digital users. There must be agile decision making and forward-thinking which advocate for a greater sync of online and analog banking service options. We decided to address the top four digital banking trends of 2020 and how Scalefocus is responding to them by keeping our clients in line with the latest industry knowledge and best practices. 

1. A Generational Shift Towards Mobile-First Design 

Mobile banking functionality needs to be paired with the best UX design principles in order to keep customer loyalty in check. A Gallup poll showed that 38% of millennials gave up on any banking activity when the process took too long. That same group of individuals preferred mobile banking apps to the complex non-mobile friendly bank websites. Traditional providers are starting to reconsider their approach to meeting a user’s needs and are looking towards adapting fintech solutions. 

You might be thinking, older generations prefer face-to-face interaction, why should banks be focusing on the needs of some youngsters? UBS (Union Bank of Switzerland), reports that in the year 2020, millennials are worth a net of $24 trillion, making them the most valuable consumers to focus on. In 2015, Harvard Business Review stated that millennials make up half of on-demand consumers, compared to the baby boomers which hold only 22%. That millennial percentage is sure to continue rising, as according to an Accenture report, Baby Boomers in North America are passing over nearly $30 trillion to their children between 2011 and 2050. 

“It is critical that institutions adapt to the needs of these new guardians of capital.” Simon Smiles, Chief Investment Officer, UBS. 

Our Response: 

Since the user experience in modern applications will become the service experience in branches of older applications, we strongly believe in UX-Driven design of products. If one picture is worth a thousand words, a prototype is worth a thousand meetings. 

Number of clicks to accomplish something are directly related to conversion rates, usage and general feeling of UX and ease of use. By using those prototypes, we are able to quickly find the right balance which will lead to maximum customer satisfaction and higher business results. 

Our teams convey the concepts of how the products will be used as early as possible in the process by starting with quantitative and qualitative research to define the intersection of user and business goals. This is a great addition to any documentation. Documentation is essential part of any development that support it till the end of the product cycle. 

Another side effect of using prototypes for end software solutions is a quick turnover of an end product with less iterations and less time spent in clarification of concepts and workflows. 

Through the use of  prototypes, we managed to deliver two complex products for data analysis and demand prediction to one of the largest soft drink beverages manufacturers and distributors in just a few months, not only delivering on the ambitious timeline, but actually beating the deadline by a few weeks. 

One of our leading global clients’ money transfer products suffered a low conversion rate, high customer drop-offs, and a decline of transactions. A Scalefocus team jumped in, analyzed the solution, and the reports showed a complex interface and an outdated transfer procedure. To tackle those challenges, we developed a strategy and implemented a total revamp of front and backend operations. Through an agile-driven delivery approach, we completely redesigned our customer’s iOS, Android, and web applications. 

As a result of our effort, the conversion rate jumped from 1% to 5%, with a record volume increase of 67% in just a month. We simplified the registration process, allowing it from social media profiles, and adding a refer-a-friend feature. In effect, new signups increased by 18%. An external payment provider was integrated, as well as a money transfers comparison platform and new channels for notification alert on exchange rates. The average amount spent per transaction was boosted by 18%. 

Another success story is a greenfield development of the software, infrastructure and user experience of a neobank startup. We created native iOS and Android apps and a scalable microarchitecture backend, processing transactions and giving transparency on business and system levels to the customer organization. 

By leveraging the power of native iOS and Android, and inspired by our UX-First approach, we delivered pixel-perfect tailor-made prototypes of the end products in just a few months. By working closely with the customer before and throughout the whole development process, we fully complied with all of our client’s unique business needs. Our mobile teams rely on scalable open-source frameworks, which have been improved to perfection over the years to provide a fast project kickoff.

2. A Rise in Customer-Centered Modern Technologies 

According to a 2019 report by IHS Markit, the value of AI to the global banking industry will reach $300 billion by 2030, with North America holding the largest market of $79 billion. An intelligent chatbot customer service strategy, will save banks up to $7.3 billion if adopted worldwide by 2023, reports Juniper Research. That astonishing figure compares to a shy $209 million in 2019. 

Voice banking is another key player in the future of digital banking services. As we’ve become more accustomed to using Siri, Cortana and Alexa digital assistants to help us perform tasks throughout the day, banks will tap into that trend to provide customers an easier way to check account balance and process payments by using simple voice commands. A 2018 PwC survey showed that 32% of customers already use their voice to shop online and 80% of them were satisfied with the experience. 

Finally, Robotics Process Automation (RPA) is gaining popularity as an advanced and highly valuable technology in the banking sector. Deutsche Bank uses RPA to automate lending operations, cash payments, and employee training. Bank of America’s RPA executes global payments, handles mortgage disputes and manipulates data.

Our Response:  

In digital banking, RPA is most commonly used for autonomously running tasks in account opening, anti-money laundering, client requests, data input, verification and validation. At Scalefocus we have the RPA know-how that will streamline your business operations, decreasing performance time by 80%, significantly cutting costs and eliminating human error by using software bots to tackle cumbersome, repetitive processes. That will give you more time to focus on nurturing long-term customer loyalty. 

More than just gaining efficiency, we focus on improving business processes, together with the customer, aiming to innovate through redefining long-standing process flows, that make little sense in a digital age, trying our best to automate inefficiencies. 

Scalefocus also emphasizes heavily on chatbot solutions for customer service, support and guiding a customer choice of products and services, leading to upsell, cross sell opportunities beneficial for both sides. The chatbot experience we deliver is in the fields of e-commerce, healthcare and the public sector. 

3. Greater Security Efforts

Nowadays most financial institutions, including banks face multiple challenges on their journey towards a complete digital transformation. Upgrading legacy core banking platforms and systems is a difficult process due to the need of securing those systems and adapting current security monitoring concepts. On the other hand, banks must keep client’s data secure on premise while staying at rest and while in motion. It is also very important to protect corporate secrets that give an organization its competitive edge on the market. 

New emerging technological trends are pushing banks to rethink their security efforts, starting with the transition to a hybrid or full cloud environment. Next, is the dissolution of traditional firewalls. It’s important to implement next-generation firewalls that track all inbound and outbound network traffic by inspecting packages and applying appropriate security measures. Furthermore, endpoint and network DLPs have now become complex platforms covering different security layers. Endpoint management platforms have taken the place of MDM solutions and are covering different business scenarios like remote work, which is expected to increase by 30% by the year 2030 as generation Z enters the workforce.  

Gone are the traditional signature-based antivirus systems, now replaced with advanced threat prevention platforms including machine learning and AI functionalities. Advanced SIEM and SOAR platforms have taken the spotlight pushing aside previous standalone SIEM software, giving organizations a wider set of security features and greater customization that reflects their unique needs. Also, traditional Access Control has evolved into Identity and Access Management, giving stronger protection, visibility and control over the use and movement of sensitive information within an organization. Finally, software development has shifted towards a SDLC (Secure Software Development Life Cycle) that is able to resolve most security vulnerabilities right at the beginning of the software development stage. 

Keeping these technological advances in mind, changing the way how banks work and interact with their systems is not a simple task and has its implications. A series of measures must be addressed in order to keep financial institutions fully secure during their digital transformation. In order to succeed, a reliable and experienced business partner is needed. 

Our Response:  

Our specialized Cybersecurity Team has decades of experience securing data and systems in the banking sector. Our engineers are aware of your security needs and have the expertise to develop the right solutions to meet them. Most importantly, we understand how legacy systems work and how they are secured, and we will help you modernize them in your journey towards digital transformation.  

Using best security policies, threat analysis, models and metrics, conducting both offensive and defensive tests, Scalefocus secures your financial services on all levels. Using a modern, robust and agile cyber security architecture and highly protected infrastructure, we identify security gaps and blinds spots across your entire enterprise and create a remediation plan on how to fill them.

 Stoyan Iliev, Senior Security Officer Engineer at Scalefocus comments:

“A bank’s security is only as strong as its weakest link. Don’t forget that you can have the best tools available, but in the end all security efforts will prove to be worthless if they are implemented carelessly. That is why we can help you put an initial design strategy in place which identifies the security loopholes and how to resolve them. Only then can you start selecting a combination of the right technologies that will strengthen the different communication layers.”

4. Fast Adaptation to a Blockchain Environment

In order to ensure greater security and transparency, eliminating the need for trust in third-party systems for verification of transactions and events, risk and cost management more banks are adopting blockchain technologies. Among the biggest banks who are already on board include JP Morgan Chase, Goldman Sachs and Bank of America.  

Blockchain involves decentralized data ledgers that store cryptographically secured and immutable transaction history among several control-accessed or public nodes and keep a secure and tamper-proof trail of banking information. The process eliminates the need for a single authority to keep track of any hazardous acts. Deloitte reports that 80% of banks will be adapting to blockchain in 2020.

Our Response:  

One of our greatest achievements so far, is the end-to-end development of a blockchain banking ecosystem for a large e-commerce company. Our client’s goal was to offer a smooth transition to blockchain financial products, to their already wide variety of traditional and digital financial services. The company’s intended blockchain products to market included a basket of ETF, loans, credit cards, and deposits services. 

Scalefocus managed to build an ERC-20 ETF token that securely and easily gives its holders access to the 10 most liquid cryptocurrencies, in addition to a proprietary algorithm that tracks their prices comparing them to other cryptocurrencies across several exchanges. Crypto-backed credits cards and loans were created to offer optimal liquidity to customers. Finally, a microservices architecture was developed that provides KYC verification of all users using the website and mobile applications. To minimize risk exposure further, back-end reporting and admin modules were put in place to manage customer profiles. We used Etherium smart contracts as the best fit between breadth of features and technology maturity as the blockchain platform of choice. 

Our company is excited to be developing a consent management system that uses blockchain to speed up the ToS validation processes of a major US client and its 40 million loyal members. Scalefocus is in the production phase of creating a centralized system of privacy terms and conditions, which will allow product owners to easily put forward legal agreements and add collaborators to monitor and make updates to the forms. End Users of this system will be able to give consent for their medical data by a simple QR code scan. The technologies leveraged include IBM-backed Hyperledger Fabric as an enterprise proven permissioned blockchain platform, as well as scalable AWS services like Lambda functions, S3 storage and SNS for notification services. 

To add to our success, last year, Centroida, an ambitious digital optimization company with expertise in blockchain merged with Scalefocus to provide bespoke software solutions to our global clients. We’re excited to roll out new and improved solutions along with their help. You can read more about our joint team efforts here. 

It’s Time to Reap the Benefits 

The proof is in the numbers we achieve. Here is what you get from partnering with Scalefocus as a strategic digital transformation expert 

  • Up to 80% performance time saving using RPA to streamline your business operations. 
  • Over 65% conversion rate increase in a single month through web and mobile app development that’s focused on the customer journey. 
  • 18% boost in transactions spent and 18% registration increase through social media tool add-ons and notification alert systems. 
  • Expertise in the latest banking cybersecurity technologies and support on how to implement them most effectively. 

Prepare for the Digital Future Now 

With eight years of experience as a leader in crafting technology excellence, Scalefocus’ FinTech expertise ranges from all-in mobile wallets, personal finance, InsurTech, remittance and payment solutions, as well as cryptocurrency powered apps.  

We know how to turn great ideas into revenue-focused, reliable solutions that respond to the latest industry trends. Get in touch with our fintech experts to discuss how Scalefocus can take you closer to realizing your goals into real digital products that outshine the competition.