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Power of the plug-in: Optimizing core capabilities

Jun 8, 2020 / Technology

Today’s financial services customers are in tune with the immediate gratification seen in other realms of business – what they want is convenience, customization and control.

Convenience to a banking customer used to mean access to branches or ATMs. Now convenience is seen as 24/7 access to the financial services they need. According to BAI Banking Outlook: Digital Banking, a March 2020 report, one in five consumers who opened an account at a challenger bank cited convenience as their primary reason.

Customization is critical to building a modern banking program. Just as every consumer adjusts their mobile phone or other devices to only have the most commonly used apps, they want the flexibility to add or take away services and products as is needed.

Customers also want to be in control of their banking experience. Banks need to provide consumers the ability to have unlimited access to their information, the option to adjust their approach to banking, as well as final say as to how their finances are managed.

Don’t replace the core, digitize it

Knowing that consumers expect digital services that embrace convenience, customization and control is one thing. But how can financial institutions provide these services with their existing technology infrastructure? The common answer is more modern, digital-first core banking software, but changing the core platform a bank runs on is not an easy task.

More banks are seeking partners that can provide the needed digital services that plug into their existing core, and enable additional capabilities to be added. Taking this path also gives banks the opportunity to better serve their customers who may have more niche needs. Three emerging customization opportunities for banks are specific services for teenage banking customers, gig economy workers and the elderly.

Since teens are digital natives, it makes sense that they are more comfortable using the newest tools. A digital-first teen account not only provides spending access to the child, but online controls also provide parents the power and insights needed to teach their children important financial management skills.

For example, parents can ditch the cash allowance and easily transfer the same amount from their account to their teen’s debit card. A parent report provides an overview of where the money was used and how – they can see spending over the course of a week, month and even a year. Parents can also easily give their child money if there is an immediate need, which is especially useful for children in college or traveling.

Special needs for gig workers

Gig economy workers need a banking experience tailored to the fact they have multiple incomes coming in at a time. Gig workers need offerings that provide a better overview of spending, but is also able to receive payments from multiple places. Financial institutions have the option to offer new options to best fit the needs of individuals and companies that don’t fit the standard. Bringing in a plug-in offering does that without completely axing their current business banking model.

The third common scenario is providing tools for elderly customers to maintain their freedom while also providing safety controls to enable trusted family members to assist in financial care. The elderly are common targets of phishing scams, and giving caregivers or family access to their accounts has too often led to problems. While this kind of offering was started 20 years ago, today’s technology has allowed for upgrades in simplicity and protection.

Utilizing a digital plug-in offering gives peace of mind in knowing that one wrong click won’t eliminate funds in the accounts. This allows elderly customers to still have the financial freedom they deserve while also giving access to a trusted family member.

When banks are deciding whether or not they should go through a core conversion, remember there are digital offerings that provide an alternative course of action. They can keep the core and offer more by laying them on top of the current core provider’s technology, and give the branch the ability to offer convenient, controlled and customized services while assisting those niches who have historically lacked adequate options.

Arcady Lapiro is founder and CEO of Agora Services.