FEBRUARY 2019CIOAPPLICATIONSEUROPE.COM9Even the Singapore Exchange (SGX) and The Monetary Authority of Singapore (MAS) now leverage blockchain technology to settle tokenised assets to simplify post-trade processes. New competition will be a key driver for digital transformation in the financial sector for 2019. Investments in digital-first, high-margin services are essential to compete with agile new fintech disruptors. Increasing competition is shifting focus to customer centricity Facing increasing competition, financial services are placing a renewed focus on customer experience (CX). Accenture suggests that personalized customer experience could bring $2.95 trillion in value for the retail sector alone. At the same time, poor customer experience is getting very costly. According to Forbes, a drop of just one point on its CX score can cost a large, multichannel bank up to $124 million. Customers demanding great service is nothing new, but for 2019, these experiences will be increasingly digital, personalized and contextual. Advanced analytics and AI can help create fulsome profiles of customers and deliver personalized and contextual messaging. Simple applications, such as recognizing customers by phone number when they call in for services or helping provide services through mobile apps are now the table-stakes. In 2019, industry leaders will expand to link customer financial and personal milestones to customized marketing efforts. Marketing materials that represent minority language preferences, custom graphics or video marketing will help ensure that customers see themselves reflected in the materials from their bank, wealth manager or insurance provider. Digital-first experiences address the needs of millennial customers The financial services sector must embrace compelling, digital-first experiences as they transition their businesses services to serve younger customers. In Singapore, more than 90 percent of customers do their banking online or via smartphone.As noted above, financial institutions are loosing ground to digital-first entrats in the sector, especially among millennials. If they are losing ground with millennials, how can they prepare to service even more digitally-savvy Generation Z consumers?Younger customers are ready to adopt new digital services and are comfortable with a digital-first financial services experience.Financial institutions are therefore transforming their services to digitize new processes. Paying bills and transferring funds is now commonplace, but customers are expecting to be able to perform more complex transactions online ­ from opening accounts, to getting basic investment guidance. Serious investments in information security, governance, and data privacyFinally, The Financial Services sector must continue to lead on issues of cybersecurity and data privacy. The sector is facing emerging new regulations and highly-sophisticated new attack vectors. The new GDPR regulationns introduced in in Europe last year are likely to create momentum for similar moves globally. Similarly, organizations like banks are now tasked with more types of investigations than ever before; HR issues, compliance violations, regulatory inquiries, IP theft and more. To solve these issues, financial institutions may need to look deeper in to an employee's activity discreetly and even remotely without sacrificing employee productivity. 2018 also saw serious data breaches and an erosion of consumer trust. Marriot hotels announced a data breach affecting an estimated 500 million customer records. Facebook faces an ongoing barrage of criticism over its handling of personal information. In the Financial sector, we have witnessed major comprises of the Swift network by North Korean hackers. Recent data from Microsoft points to the high cost of these attacks. They found that large businesses could incur economic losses of $30 million USD from cybersecurity breaches.Data shows that banks are already the highest spenders on security and this is unlikely to change. According to Kapersky Labs, banks spend around three times what non-financial organizations do on cybersecurity. As customer and regulator expectations around cybersecurity continue to increase, we expect further investments. The financial services sector must embrace compelling, digital-first experiences as they transition their businesses services to serve younger customersAlbert Tay
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