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Recomposing Banking: Driving Growth with Business Model Innovation

Growing digital adoption offers several opportunities to create, deliver, and realise better value in the banking industry

Technology has redefined the banking industry. In the last few years, we have seen the rise of digital adoption in banking. With banking apps, most of us are carrying our banks in the palms of our hands. However, this is just the beginning. Banking will further integrate into our day-to-day lives with banking embedded across our chosen apps and experiences such as Amazon, Careem, Netflix, Google, and more.

“Banks must partner and build technology that connects. We need technology that supplies services to customers. That is the great transformation that needs to take place, otherwise, our banking and finance industry will get smaller and third-party players or outer players like Google like Apple will begin to take the market,” said Paul Hennessy, Chief Executive Officer, Emirates Digital Wallet, on the sidelines of a roundtable hosted by Infosys in Dubai.

“The banking industry will experience exponential growth only when a range of primary services are connected,” he added.

Banks in the UAE, much like global counterparts, are redefining themselves amid accelerating digitisation. We are witnessing an evolving banking industry in which large institutions are bulking up their tech offerings and fintech companies are competing hand in hand.

Digital wallets is one such space. “Wallets are likely to become more popular in the UAE in coming years. Wallets widen the opportunity for people to enter structured finance and make it easier for consumers to operate and allow them to have personalised services,” said Paul, adding, “Consumers can expect seamlessness of products and experiences as technology embeds into their daily lives.”

Digital wallets are financial applications that allow you to store funds, make transactions, and track payment histories on devices like phones and tablets.

Puneet Chhahira, the Head of Product Management and Marketing at Infosys Finacle, emphasised the need for true collaborative ecosystem is paramount. “Future leaders aren't always the biggest or largest entities; they can emerge from anywhere, including incumbent financial institutions or new-age providers. As we enter the era of embedded finance, collaborative partnerships will play a significant role. The future of banking necessitates agility to adapt continuously to create and deliver better value through client-focused ecosystems.” he said.

The core argument is how banks want to service their clients. “Banks generally top products first. But, on the contrary, customers should come first. Data and technology can help banks build core processes around the needs of people, who are similar in terms of how they utilise services and experiences. This can allow banks to create wonderful experiences, which is really genuine and good,” added Hennessy.

Finacle envisions leveraging modern technologies to achieve this. “Cloud-native open core-systems, real-time payments, open banking infrastructure, and robust API capabilities are among the essential components.” said Chhahira.

Talking about the firm’s experience, he said, “Open finance, a burgeoning concept, is deeply embedded in Finacle's approach. India serves as a prime example with global leadership in real-time payments and open banking. Today, over 10 billion open payments transactions are processed in India monthly. With over 60 percent of Indian banks operating on the Finacle platform, we have learned invaluable insights into enabling ecosystem banking and managing large volumes of transactions. This experience is helping us proactively bring the latest innovations to the UAE and the rest of the world.”

Finacle has partnered with banks in over 100 countries and supports nearly 1.7 billion accounts. The suite of solutions the company offers is extensive, encompassing core banking, corporate banking, online banking, mobile banking, trade finance, wealth management, and more.

Chhahira noted that the banks in the UAE have consistently embraced technological advancements, owing to the visionary government and open policy making. “Finacle's groundbreaking work in 2016 with Emirates NBD and ICICI on blockchain for processing remittance transactions exemplifies the region's pioneering spirit. This proactive approach firmly places the UAE among the top spots in terms of policy making, highlighting the region's significance in the world of technology and innovation.”

The UAE is a pivotal region for Finacle, evident from their regional hub in Dubai. “This commitment to innovation and transformation is fuelled by a conducive framework, a diverse clientele, and the rapidly evolving technology landscape. The triad of these factors propels Finacle's dedication to revolutionise banking continually,” noted Chhahira.

Infosys Finacle is the trusted partner for many progressive banks, assisting in bringing innovative business models to life. The transformative paradigms encompass marketplace banking, banking as a service, and embedded finance, where a myriad of applications are seamlessly integrated into banking services. Some of the large Finacle clients processes a whopping 150 million transactions daily, predominantly through embedded finance use cases. Finacle, in this context, positions itself as a facilitator, privileged to be an integral part of global strategies, thus serving as a bridge between regions and banks.