TCS: Disruption is a major threat to future of Nordic banking

• TCS announces findings of study of Nordic bank cross border payment operations
• Nordic Best 3.1 still compares unfavourably to 3.5 global bank performance
• Global competitiveness under threat from digitally savvy FinTech companies and other financial players

Stockholm, September 6, 2016: Tata Consultancy Services’ benchmark study on Nordic banks’ payment operations reveals operational gaps that could be exploited by agile and digitally savvy FinTech companies. Nordic banks also demonstrate weaker performance across a number of metrics against global banks, which poses a threat as global players seek new markets. The metrics include payments operations excellence, average days to resolve a payment, and payment reconciliations.

This benchmark study looking at the process maturity of Nordic banks’ cross-border payment operations identifies critical transformation levers that would increase Nordic banks’ global competitiveness. For instance, the overall performance in payments of Nordic banks comes in at an alarmingly low maturity level of 2.7 on average, compared to 3.5 of global banks.

Speaking about the findings of the new study, Amit Bajaj, Head of Europe at TCS said: “TCS as a technology company is continuously examining the industries we serve to bring them into alignment with the digital age and banking is no different. The findings of this report have revealed a fundamental disconnect between front and back end banking processes. Nordic banks must now re-imagine their back office processes using digital technologies and establish agile, responsive back office operations that work hand in hand with the front end to improve the customer experience. Summa summarum - back end is the new front end for next generation banks to differentiate themselves against their competitors. ”

The study shows that readiness for transformation was evident in such areas as the creation of modern banking platforms, but that those banks studied were yet to fully leverage them. All participating banks showed the need to bring in report automation as well as improved training and competency management to complement existing know-how in the handling of payments.

In one example, the report showed that Nordic banks took 40% longer to complete investigations (a check on whether a payment has been appropriately processed) than their international counterparts. The accuracy of payments of Nordic banks also lagged behind by as much as 9%.

Average Days to Resolve (ADR) an investigation:
4.00 Days – Global
5.87 Days – Denmark
6.06 Days – Norway
6.15 Days – Sweden
8.72 Days – Finland

The report recommends the need for greater social listening through social media for banks as a way to understand their customers better. In addition, the report suggest implementation of mobile-based payment solutions to match digitally-connected client expectations.

In other findings, the study revealed the need for greater customer centricity, an increased and consistent roll out of digital services and the need for trained human resources to match the requirements created by digitization. The report emphasizes that Nordic banks operate a very low amount of transactions per customer compared to the global players, and with little service differentiation. Hence, the Nordic market holds the potential for much greater customer engagement which would carry an increase in revenue streams.

The report concludes that robotic process automation would serve to eliminate human error and bring payment practices up to a level of maturity and accuracy consistent with the leading global players.

Please find a copy of the report here.

Additional information

TCS
Mark Woods, Marketing Communications Manager, Nordic Region
mark.w@tcs.com
+358 40 159 2350