Bank: it’s time to transform | The star of the day

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Despite various challenges, the banking industry is changing faster than ever, and such changes are expected to happen even faster in the years to come. Investments in new technologies and fintech companies are at all time highs and even traditional banking institutions are moving away from existing business models. For example, embedded finance is already widespread whereby non-financial/non-bank business enterprises disrupt traditional norms of financial transactions by providing their own range of financial services and products that were once strictly reserved for banks. and financial institutions. .

Digital disruption is no longer a one-time event, but rather a constant pressure to innovate. New entrants to the financial scene are already well-established, cash-rich names well recognized by the media, technology and entertainment industries. They can create a better user experience and offer personalized products to capture more customers and control customer relationships. Consumer expectations are also constantly changing due to the availability of improved innovations and the creation of new and better business models.

As the banking industry evolves and progresses and becomes more technologically advanced, so too will the sophistication and capabilities of cybercriminals. The banking system of the future will need to adopt even more advanced defensive technologies and use artificial intelligence to detect and prevent cyberattacks.

As the banking industry evolves, progresses and becomes more technologically advanced, so will the sophistication and capabilities of cybercriminals.

The era of technology regulation (TechReg) is already here and its main objective is to mitigate the risks associated with new technologies and new types of market players within existing ecosystems. It is expected that regulators will also continue to update existing regulations and come up with new regulations to ensure consumer and stakeholder protection. Therefore, the financial system must also keep pace with the emergence of TechReg.

The future will require greater access of banking consumer data to third parties, which will have a major impact on retail banking. Therefore, the current data analytics business model also needs to be upgraded to maintain its relevance. Banks must learn to use data to optimize their products and services, and then sell them to customers in the way they want. The goal will be to monetize data through the use of available technology platforms.

While most banks in Bangladesh have already embraced digital existence and digital functionality to some extent, there is still a long way to go. In order to keep up with the banking standards of the future, consistent and sustained bold steps will need to be taken towards intense technology-assisted transformation. A fully integrated digital banking sector is essential for a truly digital Bangladesh, as the banking sector is an essential component of any economy. As Bangladesh and its banking sector continue to become more agile and digitally connected with the rest of the world, the challenges posed by cyber threats will also increase.

Bangladesh is generally slow to keep up with rapidly changing technology. For incumbent Bangladeshi retail banking management teams, now is the time to recognize and embrace the changing trends and prepare for this rapidly changing environment.

The author is an economic analyst

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