DECEMBER - JANUARY 19Will Neobanks Replace Traditional Banks?Recently, I read an article written by Amaury Goguel and Sabrina Chikh at Skema Business School that raises an important question about how incumbent banks will survive in the future. In this article, I will outline the key drivers of digitalisation and explain the major challenges in digital transformation.As we explore the world of digitalisation in traditional banks, it's clear that neobanks, fintech, and big techs are continually stealing the market share NAVIGATING DIGITAL TRANSFORMATION FOR INCUMBENT BANKSBy Ozgur Koc, Head of Digital Banking, Credit Europe Bank N.V.Ozgur Koc that older banks used to enjoy. Research conducted by Cornerstone this year reveals an important fact: nearly half of all newly opened checking accounts in the United States are with neobanks. Neobanks, with a 15 percent market share, have opened 50 percent of the newly created accounts. Then, we need to ask ourselves what the future will be for traditional banks. And it seems many traditional banks will shrink, merge, or disappear in the next decade. Figure 1At the same time, another research shows that customers prefer neobanks. According to research by Bain, neobanks tend to have significantly higher customer advocacy scores than their traditional counterparts. Figure 2In this challenging environment, incumbent banks must take decisive action to ensure their survival in the coming decade. That's why accelerating digital transformation is no longer a choice.CXO INSIGHTSBanking has evolved drastically over the past decade--from brick-and-mortar banks to sophisticated applications that can address every requirement of a user. This advancement in technology has created unprecedented opportunities for bankers and companies in the financial services realm, presenting them with innovative tools that can address the growing requirements of users. Indeed, modern financial institutions must constantly stay abreast of emerging market trends and incorporate them into their products to compete with their contemporaries for new clients. The need to remain agile and adapt to changing consumer expectations is a pervasive concern throughout the banking sector, but it is particularly acute for community banks, which have fewer resources and lower staff counts than their bigger counterparts. Additionally, as the availability of technology drives customer demand for more sophisticated banking experiences, community banks across the United States are under pressure to continue operations in the current era of digitalization.Yodek Services is addressing this dilemma for banking and financial institutions with its portfolio of market-leading compliance, credit risk, fraud detection, and lending products. "We enable banks to seamlessly and cost-effectively address the increasing needs of their customers and the banking sector as a whole," says Daniel Hutto, CEO at Yodek Services. Additionally, the company offers consultancy services to assist clients in ensuring that their operations and services remain compliant with current regulatory requirements and are safeguarded against harmful groups.Yodek Services' objective is to assist all banks in theUnited States in making great things happen. The company'sproducts and services have diverged into software-based products and advisory services. Yodek Services' software suite includes applications for BSA/AML and fraud protection, asset/liability management, lending and credit risk management, and portfolio risk and CECL management. Simultaneously, the company provides advisory services to help clients improve the efficiency of their existing anti-money laundering, change management, credit and lending risk management, and other procedures. "Through our advisory services, we provide sustainable and scalable solutions that help our clients improve their existing workflows and operational efficiencies in detecting potential financial crimes, complying with federal regulations, and maintaining CECL-related documentation," Hutto adds.Linda discusses Yodek Services' primary competencies, including how its lending and credit risk software helps bankers to make data-driven lending decisions and implement a risk-based lending process. The company's lending risk software enables bankers to quickly obtain actionable insights on a loan applicant's risk profile by simply inputting information about the applicant's current and past financial state, including credit data, collateral information, and business profile. Alternatively, Yodek Services' BSA/AML software finds irregularities in the client's data, including OFAC list scanning.Yodek Services has also developed an exceptional data enrichment and analytics platform that models standardized individual personality qualities for 260 million US individuals using millions of behavioral data points for each person. It is particularly of use to many insurance carriers as well. These scores compose the empirically developed Five-Factor Model and are subdivided into dozens of statistical sub-facets. "Due to the speed at which our API returns scores with privacy-protected scores, our web platform gives a wealth of information about human motives and actions, making it a valuable tool," says Leola Harden, VP OF ENGG at Yodek Services. "Yodek Services' multi-functional data enables carriers to maximize the value of their existing investments in people, systems, and machine learning/artificial intelligence capabilities." Such capabilities will certainly play a crucial role in pushing the banking sector toward a more technologically agile future. BCYodek ServicesWired for InnovationYodek Services' multi-functional data enables carriers to maximize the value of their existing investments in people, systems, and machine learning/artificial intelligence capabilitiesDaniel Hutto,CEOMARCH - 20215CONTENTSThe Liberalization of Investment: Putting Wealth Within ReachKevin Martin,Global COO and Head of Digital Transformation,Wealth and Personal Banking,HSBC [LSE: HSBA]3028Pg 10 - 11CXO INSIGHTSLAST WORD08IN FOCUSIN MY OPINIONCOVID-19's Implications for the Banking IndustryFrank Tian,VP Risk Management,Union BankPg 16 - 26Banking Industry to Advance with the Adoption of Real-time PaymentsErin Curry,AVP Payment Solutions,Avidia Bank
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