Over recent decades, banks have focused firmly on the customer and their evolving expectations. Today, products and services need to be anytime, anywhere, and anyone – available 24/7; on the go, at the office, and in a branch; and easy to use and intuitive. There’s also a push toward sustainability.

On top of that, digitalization has accelerated, the regulatory environment is increasingly complex, and the banking workplace has evolved, with some employees hybrid or remote working.

How do tech giants like SBS navigate those changes? Tobias Unger, Chief Operating Officer at SBS, delved into the topic at the 2023 Summit. We outline the highlights below.

Banking’s transformative journey

When it comes to banking’s dynamic evolution, Tobias Unger talks about several aspects. For example, an ecosystem approach has come to the fore, where banks collaborate with trusted global partners to seamlessly deliver innovative products and services. Tech stacks need to support that, meaning cross-border, compliance, and data protection considerations must be factored in.

Tobias Unger also highlights use cases that weren’t possible in the past, such as tokenized money and digital assets. Meanwhile, changing consumer preferences – for instance, buy now, pay later – embed financial services into the point of sale of commerce transactions. 

Technological advances play a role too, be it the increasing popularity of models like software-as-a-service (SaaS), cryptocurrencies allowing new forms of recordkeeping, or quantum computing developments. And then there’s artificial intelligence (AI). According to Sopra Steria’s 2023 Digital Banking Experience Report, with customers “expecting more personalization, security, and sustainability,” there’s a “newfound determination to dive into digital and reap the rewards of the AI era”.

Image: Banks are evolving by collaborating with partners and leveraging technological advancements like AI and cryptocurrencies to adapt to changing consumer preferences. © Getty Images
Banks are evolving by collaborating with partners and leveraging technological advancements like AI and cryptocurrencies to adapt to changing consumer preferences. © Getty Images

Financial services: Current landscape

Tobias Unger believes those factors create new possibilities regarding how people consume banking services and what’s possible with money. As part of that, fintechs are leveraging cutting-edge technologies and capitalizing on evolving customer expectations to focus on specific pain points and single niche solutions.

Meanwhile, traditional banks cover the needs of a broad range of customers – anything from small children, Millennials, and 95-year-olds to large corporations and small businesses – with a more universal offering. According to Tobias Unger, incumbents’ portfolio of services is disrupted by specialized entrants that “only attack one area, but in that, they’re top class”. As such, they “start to nibble at the model of traditional banks.”

Because of that, the marketplace is more challenging and competitive, with financial services organizations required to devise a strategy around how they want to differentiate themselves. Per Tobias Unger, “Every existing player, whether large or small, global or local, must adapt and adjust their business model to the specific niches they can and want to be good at.”

Image: Fintechs leverage technology to meet customer needs, creating a competitive marketplace that demands differentiation. © Getty Images
Fintechs leverage technology to meet customer needs, creating a competitive marketplace that demands differentiation. © Getty Images

Value of software providers within the ecosystem

As banks and other financial services players evolve, software providers must do the same. With that in mind, SBS considers the following questions.

  • Who are our clients, and what are their needs?
  • What are the journeys and pain points of customers using our products?

At the moment, Tobias Unger says many large, global banks still work in a fairly traditional way from a technology perspective, because upgrading huge, complex, and interdependent existing systems is time-consuming, expensive, and risky. However, they want to adapt, which is where SBS enters the picture, offering the option to install products on-premise. At the other end of the spectrum, SBS caters to fintechs wanting to leverage SaaS.

Common across the board is an increase in client expectations due to security, regulatory, technology, and usability requirements. As a result, SBS focuses on building next-generation solutions and platforms with the following features.

  • High-performing, secure by design, and easy to use
  • Offer intuitive interfaces for consumers and employees
  • Provide data storage and protection
  • Facilitate compliance with ever-evolving laws
  • Relevant to today’s tech-forward landscape

SBS is also integrating generative AI. “The technology is here, and I think it’s here to stay,” says Tobias Unger, but he believes the real potential is yet to be uncovered.

Revolution versus evolution

The phrase banking revolution is often used to describe the current climate, but Tobias Unger isn’t convinced. People become aware of a new technology, approach, or fintech and think meaningful change will suddenly occur. But usually, nothing happens for a while, so existing players slowly adapt to the situation. In many cases, a partnership model evolves out of the “moment of revolution”. 

Tobias Unger believes we’re at that point today, with fintechs that were previously trying to disrupt and travel their path alone collaborating with banks to improve the customer experience.

Meanwhile, as digitalization continues and the power of new technologies like generative AI is harnessed, banks will continue to adapt their models and strategies with the help of software providers like SBS. 

For more expert insights, head to our blog.

Ugo Fourment

Content Manager

SBS