Sponsored Before the Coronavirus pandemic interrupted our business and daily lives, banking and financial services had been experiencing a period of strong growth and intense competition, all underpinned by a push to do more business through a digital banking ecosystem.
Traditional banks have spent the last decade or so transforming their tech stacks to become faster and more flexible, while smaller fintechs and challenger banks have led the way in providing banking as a service, such that financial services are executed entirely over the internet.We’ve also seen the likes of Google, Amazon and Facebook enter the payments space - with all the questions about intention that go with this - and all while consumer behaviour has been changing faster than anyone anticipated.
In a few short weeks however, the pandemic delivered a level of disruption that may well change everything in banking that had previously been the norm. Almost overnight, the pandemic meant that bank customers were unable to visit branches and that bank employees needed to work from home: many banking businesses were faced with having to rethink their ways of working.
With China the first economy to be directly affected by Covid-19, Cao Chong, president of the financial services business for Huawei Enterprise Business Group (EBG), is well placed to consider the response of the financial services industry to the pandemic and what, post-pandemic, the industry’s priorities should be.
As Cao Chong points out, the number of customers visiting some banks in China is “only 70% of that before the pandemic”. This means that banks have, of necessity, made extensive changes to their call centre operations, business continuity management and internal control, and Huawei has had specialist teams on hand to help its financial services customers address their additional teleworking and online computing needs.
Huawei has also seen a significant increase in the volume of wealth management and insurance services going online during the pandemic and Cao expects this will continue after the pandemic is over. He said banks that didn’t already have well-established online channels have lost opportunities for customer acquisition and marketing, noting that Huawei has already held more than 50 online meeting with global customers since the start of the outbreak.
Given that banks have had to make sure their employees are safe and secure, support working from home, address business continuity, customer apps, move wealth management, lending, insurance and other services online, it’s not surprising that already highly digital banks have managed to mitigate the impact of the pandemic better than others. Says Cao “These more digitally mature businesses have experienced only a limited impact from the pandemic, and some have stood out from the competition.”
Building digital capability
But, as Cao points out, the WHO predicts the pandemic will last for a year or more, so changes to customer behaviour in banking will be long-lasting and far reaching in their impact. “Post-pandemic, more and more leading enterprises, including financial institutions, will pay more attention to building digital capability. This is also an important responsibility for Huawei,” he says. “The pandemic has influenced the asset quality and profitability of banks, and they need to rethink how to respond agilely to market changes and adjust their operational models and asset portfolios.” Now is the time to begin this rethink, while transaction volumes are low.
Cao says Huawei recently hosted a high-level round table on the response of banks to Covid19 and it was clear that technology capability now means quality: “It means security, availability, scale and reliability,” he says. In the wake of Covid19 banks should be working to ensure that the customer journey is as fully digitally engaged as possible. This means offering the best digital service experience in a number of ways - by helping people to serve themselves digitally and take control of their finances, by working data through artificial intelligence and machine learning to automate decision making, and by ensuring that the business systems which underpin it all are resilient, secure and reliable.
“Through leveraging 5G technology and smart devices, banks can connect to their customers quickly, intelligently and with stability, and deliver a superior user experience,” he says, adding that some of Huawei’s highly digital banking customers are already leveraging its 5G technology in innovative ways. For example, Union Bank of the Philippines has deployed 5G mobile banking kiosks to bring its banking services to its customers and to help prevent the spread of Covid19. “The ‘Bank on Wheels’ is a 5G-powered, banking kiosk in a mobile van that enables banking services like balance inquiries, withdrawals, bills payments, funds transfer, and account opening,” says Cao.
Machine learning and big data are vital tools for financial institutions looking to deliver a digital service experience, and vital components in a bank’s ability to respond with agility to market changes. For example, as part of its digital transformation, The Industrial and Commercial Bank of China (ICBC) switched from an enterprise-class data warehouse to a big data service cloud powered by Huawei’s FusionData solution. With this, ICBC started providing cloud services for 37 of its branches in China and for more than 100 applications and 1,000 scenarios. The big data service cloud supports the integrated management of all structured and unstructured data while providing efficient real-time, quasi-real-time, minute-level, and hour-level computing services.
Huawei’s full stack infrastructure and 5G technology means the company can provide end-to-end connection for banks to connect corporate and individual customers, says Cao. Huawei also offers Huawei Cloud to enable financial organisations to build digital platforms quickly, and it has AI and big data capabilities to help financial institutions build digital platforms.
Adhering to the "mobile first" principle to achieve smart experience is the foundation for financial institutions' customer-centric business strategies, said Jason "We do believe that the mobile capability will be the core of the future of the banking industry. It not only is applicable to the interface that connects with client, but also to the internal operations and collaborations with partners. Supporting this mobile-centric business will require new IT architectures and key capabilities of 5G, AI and cloud. As a leader of these technologies, Huawei has unique advantages that supports the cloud transformation of financial institutions, builds new connecting capabilities, and helps financial institutions improve their agility and innovation capabilities," he explained.
To date, Huawei has served more than 1,600 financial institutions worldwide, including 45 of the world's top 100 banks. In addition, it has established comprehensive strategic collaboration with 20 large-scale banks, insurers, and securities companies around the world, and has become a trusted strategic partner for customers' digital transformation.
Banks have used Huawei’s advanced cloud storage, mobile applications, network devices and technologies to build and support their digital platforms in a more efficient and cost-effective way. “Our full stack infrastructure capabilities extend from infrastructure device chips, including computing AI and network management chips, to products PaaS and customer-oriented applications in cooperation with partners,” says Cao.
“We have 36 innovation centres around the world,” he adds, “and we’ve conducted a number of joint innovation projects with customers using cutting edge technologies.” For example, National Bank of Greece turned to Huawei to replace its legacy network with a 100G. “Post-pandemic, we will work with our ecosystem partners to help banks improve their digital capabilities in cloud computing, mobile offer, digital customer journey reconstruction, and super apps, to ensure business continuity in a more agile manner,” says Cao. “Highly digital financial institutions, who can respond rapidly to market changes and seize business opportunities in the post-pandemic era, will be set up for success.”
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