Legacy systems, once the mainstay of banking and financial services companies, are gaining a reputation for being bureaucratic and expensive. Many now view such systems as the millstone around the neck of traditional banks. Banking start-ups, with their intuitive UXs and tailor-made offerings, are fast becoming the platform of choice for millions of customers. This trend particularly affects mid-tier banks that lack the asset and client base of more entrenched giants to withstand the sweeping force of FinTechs.
As more and more physical branches down their shutters, it is imperative for legacy banks to adopt new practices and accelerate their digital transformation. However, does digital transformation mean an end to physical presence?
This article identifies the many options available to mid-tier financial firms to compete with FinTechs. Outlining technological, commercial and competitive viewpoints, it highlights the necessity of adapting physical to the new era, and the advantages of balancing digital with physical.
Prime among the benefits is the strength of personal relationships built by traditional banks owing to their brick-and-mortar presence. As hyper-personalization becomes pivotal to superlative customer experience, traditional banks are uniquely placed to leverage this capability. At the same time, a collaborative strategy is needed to add new process and technological capabilities, and level the playing field.