IT ’ S ESSENTIAL FOR BANKS TO COMPLEMENT THEIR CORE SYSTEM UPGRADES WITH MODERN , FLEXIBLE DIGITAL CHANNELS .
INDUSTRY WATCH
IT ’ S ESSENTIAL FOR BANKS TO COMPLEMENT THEIR CORE SYSTEM UPGRADES WITH MODERN , FLEXIBLE DIGITAL CHANNELS .
The banking landscape in Australia and New Zealand has seen significant transformation in recent years , propelled by technological advancements , rising competition and changing customer expectations . banks to complement their core system upgrades with modern , flexible digital channels .
Customers expect intuitive , real-time services through web , mobile and other digital interfaces .
Traditional regional boundaries , whether geographic or demographic , that once characterised the mutuals sector in Australia and New Zealand have been largely dissolved by digital advancements , fuelling greater competition . Additionally , extensive consolidation across the broader banking sector has intensified competitive pressures , heightening the need for differentiation through enhanced customer service .
In this new landscape , innovation and customercentricity are paramount . However , outdated technology is holding many banks back from effectively adapting to these shifts .
To navigate this dynamic environment , banks must strike a delicate balance between driving business value and delivering exceptional customer experiences . This delicate interplay , often referred to as the ‘ banking flywheel effect ’, is essential for sustainable growth and long-term success .
Without robust and agile digital solutions , even the most efficient back-end processes may fall short of delivering the customer-centric experience that is becoming the competitive differentiator for banks . Both internal efficiencies and customer-facing innovation need to evolve in tandem to meet the expectations of today ’ s consumers .
The banking flywheel is a conceptual model that illustrates the interconnectedness of various factors that contribute to a bank ’ s overall performance . At its core , the flywheel represents the momentum that a bank can build by consistently investing in technology , customer experience and operational efficiency . When these factors are aligned and working in harmony , they create a self-reinforcing cycle that drives growth and success .
The banking flywheel consists of two primary components :
As an example , many Australian and New Zealand banks have in recent years undertaken lengthy core banking transformation programs of work costing in the tens of millions of dollars , often more .
While core banking transformations – focused on upgrading legacy platforms – are crucial for operational efficiency , risk management , and seamless back-end processes , they often neglect the front-end , customer-facing experience . In today ’ s convenience-driven world , where digital engagement and user experience are paramount , it ’ s essential for
1 . Customer value : This side of the flywheel represents the bank ’ s ability to deliver value to its customers . It encompasses factors such as customer satisfaction , loyalty , and advocacy . By investing in customer experience initiatives , banks can enhance their customer relationships and drive revenue growth .
2 . Business value : This side of the flywheel represents the bank ’ s financial performance and profitability . It includes factors such as revenue growth , cost efficiency and market share . By optimising operations and leveraging technology ,
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