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06. 19. 2018

The best way to become a digital bank – W.UP Digital Banking Weekly


What is the best approach to become digital? Should a financial institution simply create a new bank, let it grow, cannibalize the business and eventually become this new bank?

Bank reincarnation: rising from the ashes?

Does a bank need to die and reincarnate itself to survive digital revolution? Chris Skinner says the difficulty with launching a new bank is commitment to let it grow without interfering and giving it time, without cutting costs halfway through as the returns are not showing. Another question is how existing margin and profit can be maintained at the old bank.

He says a bank must change its core systems, fabric and foundations to become digital and can also launch a new bank to cater for the digital world, but it will dilute resources and capital. After all, the easiest path may well be to launch a new, clean start rather than trying to resuscitate the old broken bank, Skinner reckons.

Real-world AI: the impact on banking sales

The application of artificial intelligence (AI) could unblock the biggest potential value in sales and marketing activities, where AI’s actual impact is estimated at up to $2.6 trillion in 19 global sectors, McKinsey says.

The potential AI value is estimated to reach $300 billion in banking, with up to $200 billion in sales and marketing. McKinsey highlighted the examples of channel management and customer service, where AI value could total $100 billion each.

Open banking can help fend off tech giants

Open APIs come at an opportune moment for big tech companies, but an approach towards API-enabled open banking would help banks change the game of rules and drive innovation on par with competitors, according to Sridhar Obilisetty, chief executive at mFino.

Banks’ legacy and histories may not come as a rescue when it comes to win the next generation of consumers. However, unlocking the value of customer data will be more conducive for banks to increase revenue and serve the customers in a better way, Obilisetty says.

4 questions to explore loan origination tools

As more vendors build software as a servie (SaaS) offerings, the discussion is moving from whether SaaS is viable to which features and capabilities of the solution make a good SaaS offer, Moody’s Analytics said.

Organizations exploring a SaaS solution for loan origination should ask if there are deployment options, whether they can easily extract data, how does the solution integrate with existing software and how closely does it meet origination needs.

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