Machine Learning: a core Capability to make personalised offerings to customers
In recent years, the accessibility of technology has increased at a dramatic pace, becoming ubiquitous and ever present. Technological companies have taken advantage of this growth in accessibility to rapidly expand their client bases, consequently, companies that have not tapped into this potential are now struggling to compete or are now going out of business. Events of this kind in which an innovation disrupts an industry and displaces established businesses is popularly known as an “Innovative Disruption” or a “Technological Disruption”. An example of a technological disruption displacing a well-established company is when the Yellow Cab company in San Francisco was forced out of business due to its inability to compete with Uber and Lyft which facilitated taxi calling by using mobile applications.
“Fintech”, or “Financial Technology” designed to support or even replace financial services, is now widely discussed. Much speculation have been made on the potential of Fintech startups to disrupt the financial industry, displacing well-established businesses such as banks. However, the chances of startups replacing large and well-established businesses is not very high, thus, many Fintech startups have decided to collaborate rather than compete with well-established corporations. This is beneficial to both well-established corporations and startups. Startups expand their client bases and well-established corporations gain new technology, fresh perspectives, and potentially new sources of revenue. An example of an area in which banks and startups could collaborate for mutual benefit is an area known as “the Unbanked”, this is the area of the financial sector that banks have not reached, for examples, microfinancial peer-to-peer lending and small scale financial restructuring. In “the Unbanked”, it is unfeasible for banks to operate directly, but it makes perfect sense for banks to support startups do business in “the Unbanked”.
Clearly, it is highly advisable for financial institutions to prepare themselves to collaborate with Fintech startups by developing their own Technological Capability such as an Open API (Application Programming Interface) that will allow Fintech startups to directly call financial institutions’ functions to facilitate fruitful collaboration.
An important Technological Capability that banks must develop soon is the Digital Bank. A bank that exists digitally and accessed only through mobile applications. But it cannot just be an ‘app’, it must be a platform that attracts traffic to create an Ecosystem that serves the everyday’s needs of the bank’s customers. In the future, through the use of Machine Learning, banks will develop the capability to make personalised offerings to customers, this will be made through the Ecosystem. This Ecosystem will serve customers’ every need, it will be the channel for building relationships between customers and the bank.
Excerpt from seminar, Intania Leadership Network 2017: “FinTech & Blockchain - How Machine Serves The Future of Banking” by Khun Somkid Jiranuntarat, Vice President KASIKORN Business Technology Group
Watch full VDO: https://www.youtube.com/watch?v=Mok0o8MANAGING DIRECTORKdg
Follow KBANK and KBTG for good life update at
www.kbtg.tech, Facebook”KBTG Live”, KBTG Channel on Youtube