Tuchila, Romanian Banking Association: Digitalization in the financial banking services could be a game changer
Competition is increasing in the banking and financial services, there are new entrants on the market and this is driven by the customers' requirements in the digital era, according to Rodica Tuchila, director of ARB (Romanian Banking Association)
In her opinion, the financial banking industry will structurally change, moving from traditional banking to digital banking, to a customer-centric integrated multichannel approach to address the customers' needs.
"Adopting digital technologies will reduce the costs with the banks' networks and the operational costs, will support banks in better satisfying customers' expectations and at the same time creating increasing demand for digital banking solutions," Tuchila tells The Diplomat – Bucharest.
Digitalization in the financial banking services could be a game changer, enhancing the accessibility of these services and significantly increasing the bank-using population in less developed areas, according to the same source, who states that increasing the electronic services usage and financial inclusion could be effective in reducing the shadow economy.
"Digital solutions and the collaboration between banks and new entrants on the market could be key enablers for improving the availability and affordability of financial banking services, and this could make Romania more attractive for foreign investors," says Tuchila.
According to a study performed by the strategic consultancy company Roland Berger, today′s Romanian consumers still have a very limited range of services that can be acquired remotely, via an end-to-end digital process, compared with other European countries.
On the other side, there are about three million digital natives in Romania and the number grows every day, so the Romanian banking system faces a digital imperative, according to ARB's director.
"Therefore at the level of the Romanian banking community, with the Roland Berger company support, the Digital Agenda project was initiated," says Tuchila.
"The scope of this project is to adapt the Romanian regulatory framework to the most recent technological and competitive developments, so that they can better satisfy consumer needs and remain competitive in an increasingly challenging environment."
She adds that a list was drafted of laws and regulations that need to be updated to permit a full digital transformation, and there are discussions in progress with the Romanian authorities to adapt the regulatory framework in this direction.
There are some strategic technology trends to be considered for the coming years - according to Gartner - to have an important impact including a high potential for disruption to the financial banking services industry and for its customers, as Tuchila says.
"One of them is indeed the ′Internet of Things′ - the interconnection of embedded computing devices within the existing Internet infrastructure, offering advanced connectivity of smart devices, systems, and services," she adds.
"According to Gartner, there will be nearly 26 billion devices on the ‘Internet of Things' by 2020. We could speak also about the ‘Internet of Value' – a world where money is exchanged at the speed in which information moves today. Transactions would occur in real-time and across global networks, solving the problem of international payments systems. The most important trend is Computing Everywhere Anytime – due to the growth of mobile devices use, Gartner predicts an increased emphasis on serving the needs of the mobile user in diverse contexts and environments, as opposed to focusing on devices alone."
In her opinion, one of the biggest challenges for the financial industry would be to include mobile banking as a regular delivery channel, with integrated social media technologies.
Banks defines their own strategies to rapidly accommodate their customers' requirements and to change their business models according to these trends, as ARB's director states.
"Banks face the challenge of integrating business intelligence platforms in their digital strategy. Technologies and methodologies have to be used to enable the quick adoption of better decisions, to identify and follow trends and behaviours by embracing the overall customer life cycle and its changes, to improve experiences and enable better customer service and experiences."
According to Rodica Tuchila, banks should better understand digital consumer behaviour, to explore what they really want from banks and how satisfied they are with their current services.
"Through a better understanding of consumers and dynamic, interactive digital technology, banks can transform the customer experience and drive growth in today's highly competitive retail banking industry," she says.
Banks today must face multiple challenges: the changing regulatory frameworks and risk cultures, the digital and data revolution, the shift in customers' behaviours in terms of speed, commodity, ease of use, and the competition with new entrants on the financial services market such as FinTech companies, according to the same source.
ARB's director also states that technological innovations bring new opportunities not only in the relationship with the customer, but along the entire banking value chain. Through digitization the core banking processes can be carried out faster, more accurately, and with lower costs.
"In this environment, I think the banks should prove more agility in their market actions, more flexibility and availability to change their organizational habits to look more to customers' expectations and to facilitate digital innovation, bringing a large range of benefits to all parties," she concludes. ■