5. How can banks use digital platforms to succeed in our digital age?
Banks must be able to adapt and continuously bring new propositions and new products to market. However, they are often hindered by their legacy systems, prohibiting them from moving quickly. As a result, many institutions have started to take a page from the big technology players’ books around platform-based businesses. It’s essential for banks to invest in reusable, technical assets, such as event-based architecture. The concept of real-time insights is enabled when banks build platforms to be event-driven.
These platforms really need to look at the problems that exist around data and create a taxonomy that allows data to be joined from multiple sources, to make it more powerful. This will help to create more personalized experiences for customers, helping to create new revenue streams. Issues such as data regulation, retention, and access, customer consent, and revocation of consent, need to be deeply embedded platforms when they are being built.
Innovation really starts to arise when institutions show that they understand the changing market, realize the gaps or friction that may exist for their clients and start to think innovatively about how to use data, partners, and technology to create propositions that continuously evolve. Having a very flexible foundational platform such as EY Nexus for Banking offers that ability. Banks also need to decide how to govern and manage the data underpinning these platforms. One bank we're currently working with is very keen to democratize their data and make it available to the whole organization, rather than solely to the different silos it existed in before.
The true value of these platforms lies in making them available at an enterprise-wide level so that these silos are reduced, and institutions begin to realize the significant efficiencies that can be gained across different business lines. The ability to aggregate different insights created through these platforms will result in real value creation for both customers and banks.