Time to admit: Digital banking is more than just an app
We are pleased to be in the forefront of the new financial system. MicroMoney uses innovative risk scoring system powered by artificial neural network. Having that , two years of our diligent work have resulted in a unique scoring technology, a wide network of business partners, and stable business growth. Whose experience did we use?
We relied on our advisors, but together we came up with a completely new solution. Because the world is changing very quickly and new ideas are mandatory to keep the business running , using someone else’s experience is a way to nowhere. Together, we observe what is happening in the traditional financial world today and how flexible it is and ready for changes, for example: What do big financial bosses think when they use the word «digital»?
Most of them understand that life is changing, but as experts say , only a few understand how. For example, a recent survey conducted by an IT service provider CGI , found that 80% of the big-bank decision-makers believe they have applied digital . Another survey conducted by Gartner Group, an IT market research firm, found that 76% of the decision-makers at the largest banks do not think that their business model requires any digital .
Well, it is obvious that digital means massive, fundamental changes of a traditional business model. Existing bank’s business model was developed in the industrial revolution to activate cross-border commerce with trust. Banks controlled the whole chain value of that network, they designed and built everything themselves. It was a great chain of approved and reliable decisions. Reliable because financial institutions were regulated and licensed by governments, which gave them that trust.
Although, big banks are still blind millennials and they are still changing world. Fintech startups are daily exploring reality and its modernity . Therefore , new technical solutions which help it to operate appear everyday. These developments might have various positions — from platforms to marketplaces. However , in general we can call them an open banking system in the sense of a business model — A bank that historically controlled everything and is now unlocked to everything.
This business model is a reconsideration of the old or you can call it a traditional physical model as it was set up from zero , using modern technologies to orient on delivering service to customer experience through tech devices rather than through a physical interaction. This is a completely different business model. In other words, the industrial-era business model of banks based upon its branches is replaced with the digital-era model of banks based upon technical servers that are mostly online and interaction in real life or with a human is not needed.
So, it is obvious to those who know that digital technology is a massive cultural, business and organisational transformation based upon a wholly new business model. And if banks really want to be truly digital , they need to forget all they knew before and continue off a new ,fresh start.
There is a tricky thing about “fresh start”, because banks are currently driven by bankers, not by technologists, except the new digital banks need also to be technologists, otherwise they are just a bank, not a digital bank. Meaning that bankers should not forget, but learn and adapt to modernity. They should admit that they are not educated enough to run a modern business.
A recent analysis of big banks’ annual reports found that 94% of their leadership have never had any professional experience of any sort in their career that relates to technology. That’s the reason why most big banks think they’ve applied digital changes just because they’ve launched a mobile app.
On the other side, there is also good news — Fintech companies are ready to cooperate with banks and share their experience. That way , they could help each other. Since their interaction is possible , this means that the traditional banking system will be able to change, not just rot from the inside — which is important for the consumers.
As for MicroMoney finch company we aggregate large sets of data reflecting our customers’ needs and their online behavior and at the same time we share and exchange this Big Data we thus enabled banks, financial institutions, e-commerce, and retail businesses worldwide to efficiently scale everything . They will get access to new customers who weren’t served before, reduce risks while expanding to new markets, and better understand their customers’ needs.
Stay tuned!