The global banking industry is undergoing a significant transformation, driven by a combination of changing customer demands, evolving technology, and intensifying competition. As traditional banking models continue to face challenges, banks must find new ways to reach new customers, target new markets, and grow at scale. One way they can achieve this is by leveraging cloud-based fintech and software-as-a-service (SaaS) solutions.
Recent research by McKinsey suggests that retail banks should take a fresh look at their customer segments and demographics. This analysis reveals that disproportionate revenues tend to be locked in specific segments, and that there is often a significant gap between the demographic distribution of the population and the age at which they generate banking revenue.
This research highlights the need for banks to take a more nuanced approach to targeting different customer segments. Cloud-based fintech and SaaS solutions can play a critical role in enabling banks to do this effectively. For example, banks can use data analytics tools to gain insights into customer behavior, preferences, and needs, and then use this information to develop tailored products and services that are designed to meet the unique needs of different customer segments.
In addition to targeting new customer segments, banks can also use cloud-based fintech and SaaS solutions to expand into new markets. For example, by leveraging the scalability and flexibility of cloud-based solutions, banks can quickly and easily launch new products and services in new geographies. This can help them to tap into new revenue streams and drive growth at scale.
Large incumbent players have already begun expanding and acquiring new fintech partners and solutions in order to strengthen their existing offerings. With most SaaS solutions, the quick time to market allows them to develop and launch new products efficiently, allowing the incumbents to stay ahead of the increasingly competitive landscape. In addition, SaaS solutions can be deployed in single markets or regions to test their effectiveness before being improved and rolled out to more, greatly boosting the cost-effectiveness and lowering the risk of taking on new initiatives.
Moreover, the benefits of cloud-based fintech and SaaS solutions are not limited to targeting new markets and customer segments. These solutions can also help banks to improve operational efficiency, reduce costs, and enhance agility. For example, by using cloud-based solutions for back-office functions such as accounting and compliance, banks can reduce the time and resources required to manage these functions. This can help them to focus more on core business activities, such as product development and customer engagement.
In conclusion, the global banking industry is facing significant challenges, and banks must find new ways to reach new customers, target new markets, and grow at scale. Cloud-based fintech and SaaS solutions offer a powerful tool for achieving these goals. By using these solutions, banks can gain insights into customer behavior, develop tailored products and services, expand into new markets, and improve operational efficiency. As the banking industry continues to evolve, banks that embrace cloud-based fintech and SaaS solutions will be well-positioned to succeed.
Rutul Gandhi, Chief Revenue Officer, APAC
Björn Torkar, Chief Revenue Officer, EMEA
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