Several organizations still struggle to implement digital transformation projects in a meaningful way. But while banking institutions continue to embrace digital solutions as a core driver of their businesses over the next decade, they will face challenges in streamlining effective seamless customer experiences. Falk Rieker, Global Vice President, Global Head of IBU Banking at SAP discusses these top concerns while sharing a few thoughts on how SAP is transforming financial services and institutions.
Tell us a little about yourself Falk…
For the last 20 years, I’ve worked with banking professionals all around the globe to help them digitally transform their businesses. In my position at SAP, I’m responsible for the banking solution strategy, our GTM efforts, and our customer success with new, innovative solutions. In a nutshell, I am connecting bankers with the technology they need to succeed in today’s workplace.
How have you seen fintech and especially digital banking solutions evolve over the years? What are some of the current features/ capabilities and innovations that have caught your eye in digital banking?
In recent years there has been a greater push for organizations to run as what we call “an Intelligent Enterprise.” Banks incorporating this strategy embed intelligent technologies to enable the rapid transformation of data into insight to feed process automation, innovation and optimal experiences. As customers become more demanding, the need to make quick, data-driven decisions is crucial to the success of any financial institution. Intelligent technologies such as AI, machine learning and analytics enable organizations to respond faster to evolving consumer demand and swift market changes.
How are you seeing the impact of Covid-19 transform the consumer banking end user need for better end to end digital banking and related solutions? How do you predict the market will shift as a result of this?
COVID-19 has forced a lot of businesses to accelerate their digital journeys. Many banks already had a digital component – an app, online account management, etc. If digital experiences aren’t up to par, banks risk losing business. In fact, according to Qualtrics, 69% of surveyed customers who plan to leave their bank say it was because of poor service. Additionally, 40% of customers say they would be more inclined to stay with their bank if it offered more personalized services. Banks are now taking this time to revamp their approach to customers.
But while many can provide a digital experience – how many can provide a seamless experience? Customers expect seamless, personalized interactions today. The future is end-to-end digitized consumer banking, offering personalized services with a seamless experience.
What are some of the underlying challenges in fintech / digital banking that innovators are still not able to completely meet?
Trying to balance existing legacy systems as an organization while going through a technology transformation can be a challenge, as ensuring each system works seamlessly is a difficult task. With the right technology partner, however, financial institutions can successfully execute their digital transformation journey while continuing to run their businesses. Besides all the excitement around innovation, banks and their partners cannot lose sight of the fact that solutions have to be secure, scalable, reliant, and compliant. And in many cases that is exactly the difference between lab success and going into production.
What according to you will the digital banking landscape look like at the end of the next decade and how will emerging tech like AI/Blockchain impact this new landscape?
The COVID pandemic has pushed many customer interactions to be entirely online, putting greater emphasis on a smooth engagement process. This trend is likely to stick around, even as banks adjust to a post-COVID era.
To help guard against future disruption, banks will prioritize omnichannel banking platforms with a data driven architecture that integrate intelligent technologies. Artificial intelligence (AI) and machine learning (ML) on these platforms can help create more personalized interactions for end users. For example, AI enables chatbot interactions that take the place of human responses for common requests and questions. Likewise, ML allows a platform to process and evaluate data transactions and support new use cases to meet evolving customer requirements.
We’ll also see more banks using open, API-centric platforms that can help support innovation by connecting readily with tools from internal developers, partners, and fintechs. When new channels emerge or new functions become essential, banks will be able to adopt them without delay.
We’d love to hear a few recent examples of how SAP’s banking solutions have helped solve Covid-19 related challenges and pain points of businesses / banking groups.
SAP is working with Valley Bank to digitally transform its financial systems and obtain more meaningful business insights. Getting core processes streamlined and up to date on the latest technology will allow Valley Bank to provide faster, more efficient service to their customers. During a time of crisis where every interaction matters – and ease of use can mean the difference between gaining or losing a customer – Valley Bank’s digital transformation with SAP S/4HANA Cloud will help them thrive during and beyond the pandemic.
With the coronavirus pandemic hitting small businesses, the self-employed and freelancers particularly hard, demand for financial assistance is immense: In Germany, the state of Hamburg alone expected to receive around 100,000 applications in the first week of the program, which came into effect on March 30. The challenge was to process applications quickly, securely and accurately. To slash processing times, SAP developed a cloud application that lets users apply for emergency aid online — rather than having to first download, then fill out and e-mail PDF forms — and thus eliminates a huge amount of manual work. Leveraging SAP Cloud Platform, SAP built a Web-based application form for the IFB Hamburg with the security mechanisms required to comply with data privacy laws and to protect the portal from hackers. The next step involved integrating the back-end processes into the system to provide digital support for checks on data validity and on whether applications meet the funding criteria. Within hours of financial aid coming online, nearly 38,000 users had registered on the portal and 16,500 applications had been filed — with portal traffic reaching as much as 200,000 visits per hour. Thanks to the system SAP developed, the IFB Hamburg was able to approve the first batch of applications within 24 hours and provide financial support to those who need it.
Before we wrap up, would you like to share specific finance management or business tips for Marketing and Sales or Finance teams struggling through this uncertain time due to the Covid-19 pandemic?
Listening to your customers is more important than ever before. A good experience can only be delivered when you understand the needs of your customers. Constant digital interaction and feedback cycles are delivering the data and the insight you need to be successful.
SAP’s strategy is to help every business run as an intelligent enterprise. As the market leader in enterprise application software, SAP helps companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP® system. Their end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference.
Falk Rieker, Global Vice President, Global Head of IBU Banking at SAP