[Waleeporn]: From IDC’s research, IDC also ranked the Best Bank. What’s the criteria making them the best? How much they leverage the technology?
[Michael]: It’s very interesting this process of trying to identify who are these best banks in the region. That was a key part of our research in 2020. Although we have been sidetracked because of our research into the best response to the crisis. In the beginning of 2020, we decided to really identify the banks that were able to use and adopt technology very very well. Similar to what I talked about, about how you invest in technology and make sure that there is a right fit in these technologies to your organization. So, these twenty banks and there is also twenty best insurer lists would just really meant to identify how leading institutions in the region are adopting technologies and it has been proven that these technologies, when adopted, have either improved the ability of the institutions to operate better, to ensure stability, scalability of their technologies, but also they have seen some improvements in either business or customer acquisition or customer loyalty. There would be enough proof from these forty best institutions that technology actually helps you create and sustain business despite the challenges of 2020.
We are very pleased that you’ve got three of the top twenty banks coming from Thailand which is just really an indicator that Thailand could be a market where the best use and adoption of technology could actually happen.
[Waleeporn]: Would you like to mention the name of that Thai banks?
[Michael]: Thai banks that we’ve identified obviously would be Kasikorn Bank, thanks to the KBTG Group, Krungsri as well as Government Savings Bank.
[Waleeporn]: We had talked about Fintech, Fintegration and the new form of BFSI. Are there any changes? What kind of strategy do most BFSIs select to be competitive and sustainable?
[Michael]: You really need to understand as well that fintech, the phenomenon of fintech, is just really adopted very well into the banks. Although the fintech startups that we used to track very heavily, they might be finding some issues with regard to funding or finding the right partnerships because no one’s meeting them and without those meetings them, funding and all other partnerships and collaborations are very hard to come by. But I think that there is really a way that banks and these fintech startups can be working together. There was previous approach to work with as many fintech startups as possible, but we are finding out that many of the traditional banks would rather work with a few selected fintechs where these fintechs can really add value. And, so you have an average of maybe about six fintech startups that these banks and insurance companies are working with. And, this could be anything from data or data-as-a-service companies providing them data and, well, decision frameworks for, say, credit risk and so on.
So that’s a very important area of fintech that we are also tracking. But you also are seeing insurance companies investing in fintechs to be able to develop new portals and new customer engagement devices and interfaces, very important tool, whether it is in chatbots as well as in all these productivity tools allow sales agents to sell better. That means that’s an area of growth for the insurance companies as well. But it could be fintechs that are in general able to provide better technologies, better analytics on data but also more, I think, customer friendly, customer focus strategies to improve customer engagement.
And, that’s also an area of growth for fintechs. So, I think in general that fintech phenomenon has been, I think, assimilated well into the financial services institution. And, you are seeing some successes already. And they were quite happy that these things are happening.
[Waleeporn]: It seems like that they have to collaborate more also, right?
[Michael]: Yes, so this is, we see that collaboration has happened over the past two years. There really is no reason why you will stop collaborating. In fact, you need to accelerate your collaborations mainly because you need to be able to build a value in the context of COVID-19, or the unique challenges of 2020. Collaboration needs to intensify.
[Waleeporn]: To ensure the customer’s satisfaction, a lot of companies put priority to the reliability of site and connectivity. Do you agree with this statement? What do you foresee in the future?
[Michael]: I had mentioned scalability and reliability, availability of the service is very important. Let’s remember that everyone, whether you are a bank staff or an insurer staff or you are a customer or you are the management of the bank itself, everyone is really on a heightened state of emotions, right?
Everyone is emotional these days. You need to concern about, am I healthy enough? Would my family be healthy enough? Also, from an economic perspective, will I lose my job? will I have enough funds for retirement as I have planned last year? Will I have access to those funds? So, everyone is really on a heightened state of emotions and what is very important is to provide the experience that is not changed from 2019 to 2020. And, so that experience should be as stable, as available, as reliable as ever, in fact, more stable, more reliable, and more available is very important these days.
Because people are worried, you need to make sure that your customer experience or your customer service is as high as possible, and whether it is a technology service availability, security, reliability, in fact, very welcome for customer that is probably very worried.
[Waleeporn]: Do you think the pace of digital transformation will be faster than before? And how should this sector prepare for the technology and innovation strategies?
[Michael]: It has been said that this COVID-19 has really accelerated our adoption of these digital tools. I talked about productivity tools that have been invested on by many of the banks. I talked about the investments into cloud or investments into those data centers that would make sure that you are reliable, available and secured as well. I would say that COVID-19 has really accelerated our investments into several areas.
There are areas that have been deprioritized, but I think any technology that allows us to serve our customers 24/7 on an uninterrupted basis. Also make sure that the system is reliable, available. These are the technologies that would really need to be prioritized these days. We need to make sure that the banking industry and the insurance industries continue to know about all these technologies, what would these technologies mean for them? but also how these technologies will help them provide these reliable, secured, available services we need to provide to our customers.
[Waleeporn]: As Data is the key for Digital Transformation-right? So “to drive “Digital Transformation initiative successfully”, companies may need to leverage “Data-to-Digital framework”. Can you explain us about this framework?
[Michael]: Over the past three months, we have developed a framework called Data-to-Digital. It is composed of several elements and several reports that have allowed us to build this framework. But what is very important to remember is that you, as a financial services institution, would have to rely on data increasingly to make the right decisions. And, therefore, you need to be able to transform the nature of your data to make it more reliable, to make it more high quality, to make it usable for the enterprise, but also sharable or connected to other third parties.
So, you need to have a data transformations strategy to transform not only your traditional data but also gain access to new alternative data as well. A data transformation framework will be very important. Then you need to make sure that as you collect and you manage the data, you are able to use the right type of analytics to make decisions, to help you make decisions on those data, right? So, analytics whether it is an advanced statistics, maybe or maybe in some form of advanced analytics, maybe the use of ML, Machine Learning, tools and techniques even AI for the data that you collect, you need to be able to allow these technologies to analyze the data that you have, so that you are able to make the right decisions. And then finally, it is about being able to allow the different parts of the organizations to make decisions and make decisions very well.
That means that there has to be some governance of the decisions based on the data but also a governance of who makes those decisions, what type of decisions are they making? Are they transparent or ethical? are they good for the customers? as well. So, this Data-to-Digital framework that we have developed goes from ensuring the quality of the data to collecting the right type of alternative data, to analytics and then to the use of these analytics across the entire enterprise. Ultimately, you need to be not only good in managing funds or good management of insurance products, but you need to be good at, as a financial institution, you need to be good at managing data.
[Waleeporn]: Last but not least, may I have your inspirational quote for this sector?
[Michael]: It’s very important to know that our financial services industry has gone through many different cycles. It can be an up-cycle. It can be a down-cycle. And, we have managed to survive and still retain our business. If you look at the top 100 banks in the region in terms of asset size, the leading banks have, on average, 70 years’ worth of experience. That means that they have survived various crisis whether it’s a big global financial crisis, the Asian financial crisis, Tom Yum Kung crisis, maybe some of the subprime issues that we have faced in the past, we have had problems in the past, but we have managed to survive them.
There really is no reason why we could not survive these crises. Of course, there could be reasons about mismanagement or lack of customer empathy, but the best institutions will be able to survive this.
Source: Interviewer Michael Araneta, Associate Vice-President, IDC Financial Insights
Moderator: Waleeporn Sayasit, General Manager-Corporate Communications, TCC Technology
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