Introduction to Integrated Banking Applications
The term “integrated banking” refers to the integration among different interface applications in banking at all touch points or customer interfaces with customized information. It involves concentration on diversified services like corporate banking, retail banking, treasury, securities, cards, trust, asset management, foreign investments, trade finance, fixed deposits, and so on. Multiple interfaces used to facilitate the services expanded the scope of business but did not bring in total improvement of a business organization. It is worth incorporating the latest technology to integrate all the services into a fibrous interface under a woven integrated net. This is to evolve thrill while doing banking and behaviorally satisfying experience on an anvil of customizable banking. Customization should have no cul-de-sac.
The initial interest of banks that started thinking seriously about an integrated banking application was to have an “integrated bank” at the back to fight OSBVS. This is in fight out syndrome – the literal use of first impression integration which is a defective impression. The integrated application, however, should be the logical weapon with vision which is a futuristic way of looking at banking. Many people are aware that an integrated application in the sense of what is discussed here only helps to have a uniform application across the locations of branches and unifies behind the core, data storage, data sharing, retrieval for the help of say treasury and better MIS for the bank and also for regulatory bodies. Very few are aware or bothered about what is the real use of an Integrated Application for a bank which operates in multiple domains. Only a few of them are aware and sure about the use of Integrated Banking Application in the area of delivering satisfying tailor-made solutions of banking services in Multi Domain through Universal Banking Application.
Enhancing Efficiency and Productivity
A unified application in a diversified environment of the financial services sector, like banks, could go a long way in enhancing productivity of the personnel and thereby the efficiency of the system. For instance, investment banking and retail banking employ the same entity as a customer but deal with different fields altogether. Unifying such processes would mean rerouting the data entered into the retail banking application to the investment banking application as well, so any person working in the investment segment can view the details of the customer at one go. Optimum allocation of resources is not possible when the two systems are not unified. This is beneficial for the customer as well, as they do not need to provide the same details again and again for different products.
Now, if a customer of the bank has taken a loan and pays the interest for the amount paid in installments to a neighboring bank, they should pay the amount in the same bank where they have taken a loan but in a different department or sector of the same bank. Now, if both these departments have a unified application, then the person in one of these departments can see the intricacies prevailing in the other department. For example, if the president of a division wants to know the employee count at a branch, with a non-integrated system (like 2 different methods for maintaining employees’ count and branch-wise employees), they will have to get and compare the employee numbers from an integrated system. They can get the number just like that, which is a waste of resources and time. They can make better decisions if they know the integration factor. If one branch is increasing some sectors, the direct benefit is an increase in the number of job opportunities. Also, in terms of cost, the number of staff employed is reduced because in a non-integrated application, the number of staff at two places to handle two different customer records is more. If a customer finds a mistake in their account details and wants to rectify it, the same has to be done at both the integrated and the non-integrated systems. The only difference will be that a single entry will reach out to the different sectors in the bank. For the executives, it’s like having a view of both the drivers and passengers in the vehicle.
Improving Customer Experience
The wider incorporation of banking applications began opening transactions, such as international trade, letters of credit, and factoring, onto digital platforms. However, in the industry’s drive for technological efficiency outside the customer view, one part of a bank’s operations still remains distinct for each product. Banks need to free themselves from technological considerations and form a singular approach about every activity every client conducts for them. This needs to be the case where a single client conducts numerous activities that are interconnected or related. As defined by the Universal Banking Application, “a single account database is used to perform multiple roles assigned to a customer based on customer value and service level”.
From a consumer perspective, universal banking applications have a number of benefits, mainly they ensure the customer experience is tailored to their own unique needs, is easy to interact with and delivers more choice and tailored solutions to meet their individual needs. We discuss these benefits in more detail below. Indeed, beyond the simplicity of the offer in a single customer relationship comes an integrated service model which delivers the right functionality to meet customer requirements in a seamless fashion across all the transaction types – lending, deposits, investment, etc. By harnessing the data for decision making – in sales, service provision, risk management, and marketing – banks can truly deliver value to the customer that their bank knows them, they can offer the speed and maximum value to the customer and, crucially, banks remove any chance of exceeding customer expectation but the opportunity to exceed it.
Enhanced Risk Management and Compliance Measures
United and digitized banking sector operations mean that there is a single unchanging record of every transaction, customer interaction, and account operation. This enables banks and other financial institutions to easily collect and scrutinize this data, mapping various factors in a single dashboard application. This workspace simplifies a lot of operations and ensures a quick transfer between different roles and factors. This need for correlation means that since there is potentially data on all ongoing operations, no single risk factor or dimension can be taken as irrelevant. Potential anomalous behaviors and toxicities can be examined, highlighted, addressed through AI and Machine Learning tools and reports. Paired with other applications, they can facilitate large-scale daily risk assessments in line with scenarios and simulations, in order to help bank governing bodies make decisions in terms of risk models, capacities, reserves, and long-term strategies. In terms of conduct and techniques and maturity of risk management, these reports go to bolster and support bank conduct best practices. The common structure of an integrated banking system can read all this data and mix them together, enriching the results.
Compliance Enhanced Measures
Regulatory adherence and industry best practices knowledge can be present in the main policy system and be part of it. Each regulation, however, includes risk factors and exposures checks to demonstrate that the bank has a governance structure that is able to spot conflicts of interest and demonstrate the ability to take corrective action if anything is wrong. For example, MiFID II requires banks to be able to demonstrate Conflict of Interest and Target Markets Awareness. This request can usually be translated into the ability to match FRE (Functional Requirements) to constraining variables alignment, where constraints are coming from profitability, pricing, and market targeting.
Future Trends and Innovations in Integrated Banking Applications
The coming few years in the banking industry have a lot in store. Innovations and developments in terms of banking applications will be immense and unmatched. The rise of advanced technologies would witness companies relying on artificial intelligence, blockchain, and predictive intelligence for refining their overall operations. Advanced-level AI technologies can be anticipated to form the entire structure of the forthcoming banking sector in order to establish and capitalize on a more compelling and business-oriented market.
While the rise of digital banking applications continues to be substantial, banking companies are increasingly leaning towards adding new services in their applications. Had it been a few years ago, I would always vouch for the importance of having a unified banking app. However, the present-day and the time ahead hold a greater significance in having such unified applications. There are multiple reasons for it and multifaceted advantages as well. Today, blockchain, in many ways, is driving customers towards investing in innovative blockchain-based service providers. Customers are switching to companies and applications which leverage blockchain to offer them an enhanced level of security, whole-demo, and managed access and control to their money. Art is what adds to the culture and tradition of this age, making banking smarter, intelligent, and more intuitive. Market analytics show glimpses of the rise of predictive intelligence to provide insights into customers. Banking apps with ML & AI integration will reportedly be providing options based on recent customer activities, habits, and transactions.