SOFIA (Bulgaria), July 5 (SeeNews) - As digitalisation transforms consumer habits and the lines between finance and technology get blurred, the success of digital strategies in banking lies very much in the right IT services integration that is specific to each organisation, says Csaba Izbeki, managing director at Kyndryl Eastern Europe Territory.
“New entrants and new habits among consumers combined with changing economies and regulatory environments are transforming banking services as we know them,” Izbeki told SeeNews in a recent interview.
“Digitalisation is the foundation of these shifts. We see that today every financial services company – no matter if it is an established bank, or a startup challenger - is looking for new IT integration services and solutions that help automate operations, predict outcomes, prevent cyber-attacks and better manage increasingly diverse workloads and platforms on the premises or in the cloud.”
The number of digital banking users has increased significantly in the last years and online banking has become the norm in Europe. In the euro area comprising 19 different economies, over two thirds of the population uses online banking, according to German market and consumer data company Statista.
Besides reduced flow of clients to their branches, banks face growing pressure from new competitors, such as fintech startups or tech platforms, forcing them to communicate even more closely with their clients, directly and digitally using different business models, channels and apps. All this points to a financial services industry that is likely to look very different in the near future, Izbeki noted.
A Kyndryl-sponsored research by SeeNews found that every year more than half a million new clients begin looking for new digital offerings from their bank. In 2020, the top 87 banks in Southeast Europe (SEE) spent approximately 700 million euro ($722 million) on IT with a growing proportion invested in new digital services. However, while almost all SEE banks have undergone at least one digitalisation initiative in the last year, the demand for existing and new digital services is increasing exponentially.
The research shows that SEE banks are heavily investing in IT, yet the return on investment (ROI) in these projects varies. The organisations with the highest ROI are the ones with the holistic approach to banking in the digital era. Merely introducing disparate online services or high-end products is not enough to achieve sustainable ROI.
“As an IT services integrator, Kyndryl is managing the services and underlying infrastructure in an integrated and unified way,” Izbeki explained. “We are modernising our clients’ IT environments to help them meet increasingly complex customer demands, improve business processes and profitability. Such integration brings order to the modern multi-cloud, multi-platform and multi-vendor IT environment, helping banks consolidate IT management more efficiently, and providing greater visibility across discrete servers, networks, and applications.”
The right technology and the industry expertise to put that technology to its best use are instrumental in keeping up with a rapidly changing financial services landscape, he went on to say.
In Southeast Europe, Kyndryl has helped several banks integrate digitalisation through multiple layers of their operations – from modernising core processes in back-office systems through developing front-office digital platforms and client-facing online systems.
In Bulgaria, Kyndryl designed and implemented an automated online loan processing system at First Investment Bank (Fibank).
Ljubljana-based NLB Group with operations across SEE works with Kyndryl to transform its data eco-system and leverage new growth opportunities. A new platform, powered with machine learning and artificial intelligence capabilities, allows the bank to improve its data insights, leverage data for better customer experience and optimise banking processes and personalisation of services, leading to data driven decisions.
In Bulgaria, Raiffeisen Bank works with Kyndryl under a five-year IT services contract to design, develop, implement, integrate and optimise main applications running on the bank’s business processes platform. Key point for this engagement was Raiffeisen Bank’s decision to run a platform for digital business processes leveraging Kyndryl Bulgaria’s industry knowledge.
Currently, Kyndryl Bulgaria and Raiffeisen Bank Bulgaria are partnering for digitising retail and corporate banking, automating credit and loan origination processes, card and loan logistics. As a result, Raiffeisen Bank now manages more processes in automated paperless form, significantly speeding up banking operations and optimizing cost per loan. Digitalising loan processing services has helped Raiffeisen to reduce its loan processing cycle gradually from five days to 15 minutes in an E-loan process. This innovation results also in 30% fully end-to-end digital credit processes for the bank and high customer satisfaction.