SINGAPORE – Media OutReach – August 31, 2023 – Backbase, the global pioneer in Engagement Banking, today announced the release of the APAC-focused IDC InfoBrief, “Accelerating Customer-Centric Transformation by Balancing Create and Buy – A Collaborative Approach Towards a Sustainable Digital Banking Architecture“This in-depth report draws on insights from 125 banks and 316 CIOs across APAC, providing a regional perspective on digital transformation. IDC’s InfoBrief challenges the long-standing default approach of creating in-house solutions for digital engagement banking platforms and finds that 65% of medium and large banks in APAC have chosen to build their engagement banking platforms in-house to achieve digital transformation.However, 70% of these projects failed due to lengthy and costly internal efforts.
According to IDC’s InfoBrief, 80% of digital engagement platforms built in-house with budgets over $10 million are facing poor performance and have not generated the desired ROI in their initiatives digital.
“Building in-house is a de facto strategy for banks, but it is no longer possible to achieve the pace and scale required to compete. The complexities of the vast amount of data layers, channels, features, upstream and downstream integration that must support legacy and modern systems to manage and orchestrate in a sophisticated way is where implementing internal work is divided,” said
Ashish Kakar, research director, financial information, IDC Asia/Pacific.
Gaps in digital experiences
Although they have embarked on digital transformation since the 2000s, many banks in the Asia-Pacific region are still in their early stages, failing to fully leverage its benefits and deliver compelling digital engagements to their clients.
IDC’s InfoBrief highlights a crucial disconnect between banks and their customers, where most banking products and offerings are considered “me too” and limited. Clients face challenges accessing multiple services through disparate interfaces, lack a unified view of their portfolios, and experience lengthy onboarding processes. The demand for instant approvals and streamlined digital processes remains unmet, while personalized experiences, segmentation and relevant promotions based on lifestyle, life moments and customer goals continue to elude them. Additionally, back-end operations suffer from the lack of intelligent assistance in contact centers, forcing customers to repeat information to different service agents due to the lack of a unified 360-degree customer view. This is because banks are focusing on mobilizing a large amount of resources to shape banking platforms instead of prioritizing creating differentiated customer journeys and experiences upstream.
“More than 150 modern, forward-thinking banks have adopted and grown Backbase’s banking engagement platform to accelerate their go-to-market visions and prioritize innovative and differentiated digital customer engagement and experiences. In the APAC region, you see large and medium-sized banks like Techcombank, BDO, HDFC, ABBANK, OCB and many more already on the bandwagon of the engagement banking platform,” said
Riddhi Dutta, Regional Vice President, Asia at Backbase.
“A true platform meets all the hygienic requirements, from adaptability to the market, to security and regulatory compliance, to versatility and customization to meet the unique needs of each bank’s customers. The platform is a composable framework offering modularity and reusable data and journeys to banks to help them future-proof at scale.
Dutta explained in more detail.
A Mindset Shift: Embracing “Adopt and Build” for Accelerated Growth
Analysis presented in IDC’s InfoBrief sees Adopt and Build as a pragmatic solution for banks to accelerate their go-to-market efforts, differentiating where it matters instead of reinventing the wheel starting from zero. By adopting and building on a collaborative platform, banks can achieve 40% faster time to market, with digital engagement banking platforms able to launch in 11 months, compared to 20 months traditional with a complete “build” approach. Additionally, the “adopt and build” option was found to be 2.3 times more cost effective than the traditional in-house “build” option.
Based on six key indicators: market fit and differentiation, legacy risk, creation risk, time to market, modernization of IT talent and skill sets, and regulatory compliance, the “Adopt and Build was rated highest and showed tangible benefits over the Adopt and Build approach. Build and Buy approaches.
This InfoBrief from IDC is the first of two advisory guides commissioned by Backbase to provide pragmatic guidance for banks to evaluate a more effective platform strategy capable of driving accelerated and differentiated digital customer engagement.
To download IDC’s InfoBrief, “Accelerating Customer-Centric Transformation by Balancing Create and Buy – A Collaborative Approach Towards a Sustainable Digital Banking Architecture.” », #AP241480IB June 2023, click on
here
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