Banks and insurance companies are going digital – with DARZ
Banks and insurance companies have mainly pushed digitization in the area of sales so far. Online intermediaries, direct banks, and comparative portals have gradually made the conventional external sales force virtually obsolete. The steadily declining number of branch offices is one indication of this. The basic approach of banks and insurance companies has not been shaken yet by digital change, however, since digitization only digitizes how their services are sold, but hasn’t fundamentally changed them. This will change with the advent of the fintechs, however.
Fintechs on the move
Fintechs are attacking the high-margin transactions of the banks, in particular, in all areas of banking. The strategy of just waiting and thus merely defending the core business has not been effective thus far. But the profit margins in the banking business are far too high to permanently remain at the current levels. Banks and insurance companies should cannibalize themselves rather than to lose to a Fintech company sooner or later.
Digital transformation in full swing
According to the Industry Compass Banks 2016 from Sopra Steria, ongoing regulatory pressure, low interest rates and digitization are also driving the banks’ cost pressures. For banks and insurance companies, this means positioning themselves to be lean from an organizational, product and process perspective to free up funds for the transformation process. This will lead to increasing industrialization and outsourcing of everything that isn’t part of their core competence. The bottom line is that the importance of standardization and automation in the banking sector remains high.
Digitization has priority
In light of this situation, it is clear that 84% of the decision-makers surveyed consider digitization in their own companies to be particularly urgent. Almost all of the respondents believe regulatory pressure will drive process and IT standardization even further. The pace of industrialization is also expected to grow significantly over the next two years: 87% of the decision-makers surveyed plan to invest in overall bank management and 73% in management of the sales channels by 2019. An average of 20% of the investment costs are spent on renewal of the IT application landscape.
Process optimization only the beginning
In the long term, however, the pure optimization of processes with the aid of digital technologies will not suffice to withstand pressure to change. Banks and insurance companies need real innovations to be able to fundamentally renew their entire business models. To meet this demand, they need IT partners who know the market and are specialized in digital evolution.
DARZ: The IT partner for banks and insurance companies
This partner is DARZ because the company offers its customers not only the infrastructure and technology, but also the expertise and access to networks and cooperation to reposition themselves and survive in the future. Our motto is “Data is more valuable than money” not without reason. In this context, it is also possible to implement dual data center scenarios with DARZ. Our high-security data center is located outside a radius of 30 km from Frankfurt and thus meets the legal requirements according to BaFin, Basel III and the Luxembourg Regulation.