COVID-19 has accelerated the journey towards digital transformation, disrupting business models, increasing demand for more customer-centric services and helping drive new digital payment adoption.
Through this large-scale disruption, the financial services industry has had to pivot on a dime and continue supporting its customers with the same standards of security and reliability. Sustaining this level of resilience whilst identifying business priorities for growth will remain a challenge in 2021.
I had the pleasure of discussing this theme at the US Women in Payments Symposium last week.
I sat down with three leading experts in the financial services industry: Sarah Billings from PNC Bank, Courtney Trimble from KPMG and Andrew Haskell from BNY Mellon, and invited them to share their predictions for payments in 2021 as part of a feature conversation themed “Keeping Pace with Payments Modernization.”
Trends to watch
The panelists highlighted four strategies for growth:
- Embed new payments formats and technologies for differentiated customer experiences: Adoption of real-time payments and API connectivity are critical components of digital enablement to provide superior customer experiences. Immediate payments enhance services and open new sources of revenue for banks to address the needs of their retail and corporate clients. Enhanced payables and receivables functions, and embedded payment capabilities are just some of the advantages of payments modernization.
- Remove friction and automate processes to facilitate the journey to digital transformation: Many financial organizations transitioned smoothly to remote working, but as we continue to adapt and reinvent the way we work, the crisis also highlights the need to enhance customer onboarding and reduce complex paper-based workflows. Streamlining and automating the customer journey reduces inefficient processes and accelerates the time to value.
- Harness the value of data: ISO 20022 is the language of the future for financial services and offers significant opportunities in the form of improved straight-through processing, richer payment data, and enhanced interoperability. This year, many organizations will refocus on this strategic initiative of ISO 20022 standardization to become more efficient, support business growth and harness the value of the embedded data in payments.
- Build the technology foundations that will allow the organization to evolve: The current crisis has accelerated the pace of change and banks will need to evolve to new business models and market requirements as digital adoption is likely to be a key priority. Corporate customers are themselves prioritizing payment services and modernization as they turn to their banking partners to support growth and streamline payment operations. Taking advantage of new standards, deployment models and API connectivity will be building blocks to support growth.
How to keep up?
What we have witnessed, and as my fellow panelists highlighted, is that large-scale disruptions can provide important learnings for the industry. We have seen an increase ofof new innovations and positive change coming out of the recent crisis.
Whether it is reinventing our work environment while still maintaining the highest level of security and productivity, or reviewing and modernizing complex internal processes and procedures to make them not just digitized or automated but truly digital, frictionless, and embedded into customer journeys and experiences, the industry has been making great strides.
While COVID-19 has undoubtedly fast-tracked payments modernization, full digital transformation remains a journey requiring a new mindset that takes advantage of the new standards and technologies now available. Ultimately, the industry needs to modernize at the same pace as payments are being transformed.
And I, for one, look forward to being part of the exciting journey ahead.