Let’s get real. All this talk of Fintech like blockchain and bitcoin are all great but we’re probably 2-3 years away before these technologies can make any meaningful impact. But banks are dealing with real problems that can be solved with technology today. Sometimes we get so caught up with the next best thing, we missed out on opportunities to do something now.
So here are some frustratingly annoying problems banks can solve with tech, RIGHT NOW!
If you’ve ever worked on the front line, you’ll know what I’m talking about. Product information scattered all over the place. They could in different folders of a shared drive, or on an excel that only someone from some department have access to. Looking for basic product information is like a treasure hunt and the data might be outdated or incomplete. It’s madness!
In early 2000, someone came up with a very simple idea. “What if we can centrally manage our product online?” This simple idea became the seed that spawned a $2 trillion dollar behemoth we now called eCommerce.
It makes perfect sense for banks have a centralized product system and make everyone’s lives easier. There are “out of the box” solution that comes with as a centralized product repository with a beautiful front end and some cool searching features. Some are available on the cloud so it’s easy to adopt the technology.
All banks have compliance reporting tools, but given the complexity of today’s regulatory requirements, they are simply not enough. We live in a completely different world and there are too much at stake when the regulators come knocking.
The fact is compliance violations are becoming harder to find. You need to look deep at the data interrelationship across different processes, trends in clients and staffs behavior, and pan-regional activities. And most legacy systems just aren’t cut out for this type of work.
That is why RegTech is such a hot thing right now. According to Deloitte, there are over 150 RegTech startups globally in 2017. And if there is one thing these startups understands, it’s data. They are able to leverage innovations in data architecture and analytics to generate meaningful reports and real-time alert in real-time so you won’t be caught off guard.
FUND ORDER ADMINISTRATION
For some reason, fund administration is still stuck in the stone age. It’s mind-boggling that we can order lunches over an app, but are still processing funds order using paper application and faxes!
End to end order and execution solutions have been around since the 80s but fund operations have been kept in the dark. The excuse is that the fund houses and the distributors negotiate very specific terms and that makes automation difficult.
Well, guess what? A number Fintechs have figured it out. Some offer digital execution and settlement through direct connectivity to the fund houses. Other offer services that automate the rebate processing. Some of that these solutions are funded by the asset management companies so it’s cost-effective.
A lot of banks that I’ve worked with uses very basic tools like Word and Excel for their call report. And really, as long as they have an organized process where these reports are properly maintained, it really isn’t that big of a problem. What’s more interesting is the content of these reports.
A client can tell you a lot about themselves in any client engagement and the data collected from each these engagements is the most valuable intelligence you can have. The trick is, how do you mine that intelligence in scale. Word and Excel can’t do that.
Bottom line, call report needs to be more than just a note. There are technology solutions that use metadata to capture keywords and classify them into themes. As the library builds up, they reveal some very interesting things about your client’s investment behavior, preferences, and risk tolerances, to which you can personalize your offering to each of your clients.
A LITTLE IMPROVEMENT GOES A LONG WAY
Look, as a Fintech enthusiast, I’m super excited about how the industry is transforming. But we can’t move ahead unless we remove the hurdles today. As you start planning for 2018, work with your IT and think about what little improvements you can do with tech. It’s the small victories that matter.
Managing Director, Head of Greater China