Banks explore new alternatives to traditional services as credit applications boomed in the last year

As banking services are undergoing a profound change amid the development of technology and shifting preferences of consumers towards new means of payment, a new concept is taking shape and revolutionizing the financial industry: open banking.

The use of algorithms has taken the mobile banking to an unprecedented level, making Ivo Grigorov – CEO, Credefi Ltd to estimate to 300 billion the number of alternative online transactions (outside traditional banking) worldwide last year, with a forecast of doubling until 2026.

Credefi in Italy is using algorithms from Experian, world’s leading global information services company, and this allowed it to cope with the changes induced mostly by the pandemic which begun in 2020.

Organizations are now trying to create a digital customer journey as much smooth, easy and transparent as possible.

“Crisis in any form, financial or pandemic, is driving the regulations to become harder and harder. The usage of innovative tools for dealing with more structured data becomes the key success factor. For example, we see how the Environmental and Social Governance will change the way companies are evaluated in the near future”, said Spiros Giourgas, Sales Director Balkans, Experian.

For example, The UniCredit Group has launched buddybank, currently available for Italian customers only, a mobile-only bank accessible solely via smartphone, available on iOS, Android and newly on Huawei platforms.

According to Massimo Bondanza, Head of marketing & products at buddybank, mobile banking “allows the use of small formats, due to the use of smartphones for interaction, instead of desktops. We also had to eliminate all round-trip outside the smartphone. It all starts and ends within the mobile phone”.

Buddybank is using Experian solutions, and this allowed fast deployment, without branches, completely paperless, and the customer care is ran through chat.

These two examples are in line with the findings of the latest Experian’s 2021 Business And Consumer Report in EMEA which reveals that 62 percent of businesses believe they need more data to fuel their analytics needs, while 65 percent are exploring different types of data sets to improve accuracy of their analytics (e.g. use of non-traditional data sources such as open banking), and 67 percent of businesses are prioritising investment in the digitalisation of core business processes.

The data came out based on the commissioned study conducted by Forrester Consulting on behalf of Experian, August 2021, over 598 senior decision-makers in financial services and telecommunications firms in EMEA region.

62 percent of businesses have seen an increase or a significant increase in credit applications from new customers over the past 12 months. Organisations that still suffer from delays due to manual workarounds or customer checks that slow the process down will be affected and lose business.

The pandemic and fast mass spreading of the use of internet and online shopping and interacting has paved way to a new, disruptive trend in the banking services, which are embarking into the full-mobile journey. And according to key managers of fintech and mobile banks speaking at a recent series of webinars during the Experian Innovation Week, the disruptive mobile banking is already seizing chunks of market share from traditional banks.