In today’s modern world, banking organizations are under more pressure than ever to increase efficiency and embed innovation within their business in order to remain competitive. The banking industry is undergoing a transformation, which involves new technologies such as the cloud, new customer demands and new challenges. The question is: what digital trends will shape the future of banking and what are the best ways to adopt them?

We spoke with Gregor Bierent, Chief Executive Officer at NF Innova, and discussed new digital business models that are reshaping the financial industry. Mr. Bierent became CEO in November 2020 and has since then been leading the company’s next chapter of growth, which includes building a product portfolio based on the latest trends, such as Embedded Finance, Smart Banking and Digital SME. In this interview, he shares his views on how banking organizations can reinvent themselves for the future by leveraging automation, cloud, SaaS and other emerging trends.

1. Speaking of the future of banking, Bank of America CEO Brian Moynihan said: “We’re clearly a technology company.” How would you describe the relationship between banking and technology? Are banks becoming tech companies ‘with a banking license’?

We see a tremendous engagement of banks towards investing more into technology since this will enable the future of banks and financial institutions. Technology drives cost-efficiency, fast time to market for new initiatives, and convenience for all customer segments. But it is not only about investing in technology, considering that overseeing and analyzing the main activities of banks, compliance and product management, and customer relationships contribute a lot to banking success and customer satisfaction. Taking local and regional regulations into account, we see that it is not easy to transform into tech players. Doing so can double, triple, or multiply the bank’s valuation – so every shareholder and an executive manager would like to do it. Technology will remain the enabler of success and sustainability across all industries. That said, banks that maintain and evolve their leadership by partnering with strong tech players in the market can gain a competitive edge without becoming technology companies themselves.

 2. How does a large traditional bank transform itself into a digital bank? What are the key challenges on this journey?

Banks face many challenges during their transformation to become digital leaders of their industries. Especially when looking at incumbent banks, having history, being compliant with local and regional regulations, and having significant headcount and responsibility, it is not an easy journey to go on. Usually, we see that banks focus on three main areas at the beginning of their journey:

• Enabling digital interaction with their customers across all channels (no matter the size). In today’s world, customers expect interaction, support, and sales across all digital touch-points and the physical world (bank branches) as well, so it is crucial to enable services and sales whenever and whenever. 
• Automation: In the previous decade, the focus has been on automating internal processes without putting end customers and the benefits of automation first. Today, we know that banks can deliver increased value if they focus on the end-to-end automation of their customer-facing processes like account opening, loan origination, and other onboarding processes. These processes can now be completed anytime, 24/7, within minutes – not weeks. 
• Embedding non-banking services, taking care of customers beyond banking:
  The battle for the end customer has just started. Many customer-rich companies are trying to lock in their customer base by providing non-core products and services to meet customer demand, increase retention, and cross and up-sell products or services. Banks are in the driving seat since they have the customer’s trust and deep insights into customer capabilities. So, incumbent banks can start offering value-added services to their existing and new customer base across different verticals – from insurance to telecommunication, IT, or legal and professional services – to simplify daily operations and deliver value to customers by providing compelling offerings at their fingertips. 

3. What is the role of cloud technology in banking transformation? Would you say that SEE banks are accelerating their transition to the cloud in order to meet customer expectations and compete with cloud-native players?

Cloud and Software as a Service (SaaS) models are the backbone of seamless and easy growth of enterprise companies. The ICT world has transitioned from being infrastructure-focused to becoming application and customer value-focused. Cloud computing has been the key driver of this transition. We are all using some form of cloud service in our daily lives, whether it’s Google, Dropbox, Netflix, and Viber. These services are fast, easy, and focused on our demands. The same applies to corporations – why spend a lot of money on hardware, infrastructure setup, educating ICT professionals to run and maintain HW, and partners to provide support for their applications if you can get all of that through your SaaS / Cloud partner? There is also no need to worry about high upfront investments for your projects. You can also scale applications to your needs – based on customer success – and receive all upgrades without touching your hardware. It is an “all-in-one” carefree package which will drive cost-efficient digital business model of the future. Seeing what happened since 2010 in the USA and other high-tech countries, we recognized a strong growth of Cloud and SaaS projects across industries, which had slowed down briefly due to regulations, but is still going strong. We see the same trend within SEE. So it is not a question of IF but WHEN the cloud will be fully adopted in SEE across banking and other industries.

4. Let’s address the elephant in the room: is the cloud safe for banks?

Cloud is safe, and since compliance has always been crucial, regulators have prepared a stringent list of requirements that you must meet if you want to be or become a Cloud Service or Software Provider. Cloud is safe for banks and will be the future!

5. What security challenges does NF Innova solve?

NF Innova works with its own strong security features and the world’s leading security companies in the cloud and non-cloud worlds to enable reliable provisioning of Software Banking applications. From Face-ID to behaviour-based security, where our mobile banking or web applications can recognize the customer’s behavior (e.g. how fast and strong the customer hits the keyboard when logging in to the application and compare it with recent logins) and decide on security measures or limited functionalities (e.g. being allowed to open a bank statement but not to execute payments), which is the reliable way to avoid fraud in today’s world. The perquisite for all of that is iron-clad infrastructure security. To achieve it, we partner with one of the leading cloud providers in the region, Mainstream.

6. Can you explain to us how your Fintense solution empowers digital banking? What are the key benefits for your customers?

Fintense is our Digital Cloud Banking platform, which allows banks of all sizes and in all countries to service their client segments (Retail, SME, Corporate) with state-of-the-art digital banking services. Fintense enables interaction on any digital channel, following the right context (not only content) and strong end-to-end automation of customer facing processes. That way we enable new account opening within minutes (without visiting the branch), provisioning of loans (cash in accounts in minutes, not weeks) or advice on how to deal with personal finances (savings or spendings), just to mention some fundamental features, adding values for banks. Besides the above mentioned, we have a strong focus on innovation. From scanning your private bills/invoices to advice on how to spend or save your money (Personal Finance Management) through Augmented reality to find the closest branch or using Multi-Bank application to see all your different bank accounts in one application, Fintense makes banking fun for customers and not cumbersome, like in the past.

7. What digital banking/cloud trends do you expect to see in the coming years?

Cloud enables further decentralisation of digital banking services, thus we see that the banking world will further gain value and benefit from trends such as Embedded Banking (receive a loan from your bank, when you buy plane tickets from your carrier without asking for it). Immediate fulfilment is supported by the Cloud/SaaS and today’s customer expectations, which are higher than ever. Everyone expects banking to be as seamless as shopping on Alibaba or Amazon is in their private lives.