4IR and Digital Transformation Opportunities and Strategies to achieve goal

Transforming to Digital Bank,
Opportunities and Strategies to
achieve goal
Presented by
Syed Shoeb Choudhury
IT Specialist and Banker

The First Industrial Revolution used water and steam
power to mechanize production.
The Second used electric power to create mass
production.
The Third used electronics and information technology to
automate production.
The 4th Industrial Revolution (4IR) is a fusion of advances
in artificial intelligence (AI), robotics, the Internet of Things
(IoT), genetic engineering, quantum computing, and more. ...
The Fourth Industrial Revolution is a way of describing the
blurring of boundaries between the physical, digital, and
biological worlds.
Fourth Industrial Revolution and Bank

• 1st Generation Bank: Historical, traditional
banking. Started with the Medici family in the 12th
century.
• 2nd Generation Bank: Commenced with ATM
machines and accelerated in 1995 with the
commercial internet.
• 3rd Generation Bank: Banking when and where
needed it as redefined by the emergence of the
Smartphone in 2007.

4th or Next Generation Bank:
Embedded, ubiquitous banking
delivered in real time through
the technology layer.
Dominated by real time,
contextual experiences,
frictionless engagement and a
smart, AI-based advice layer.
Largely digital omni-channel
with zero requirements for
physical distribution.

The bankers of tomorrow are not
bankers at all”—the bankers of
tomorrow are technology enabler
who enable banking experiences to
the customers will use across the
digital landscape.
Global Changes in Financial Sector
The bankers of tomorrow ?

Competition: More and more, we
are competing not just with rival
companies from within our
industry but also with companies
from outside our industry that are
stealing customers away with their
new digital offerings.

The foundation of banking in
the early era was simply
being great at banking—good
Return on Equity (ROE), good
credit risk policies, good
distribution and network, etc.
The foundation of banking
in the new era is being
great at technology.

As the availability of emerging challenging technology,
visits per customer to the branch continue to decline.
Banks reliant on only branches will have nowhere to go.

In China, now a person can
Pay the rent using Alipay from Alibaba
 Invest using WeChat from Tencent
Bought a mutual fund from Baidu.
These are not bank at all, the landscape has
completely changed.
Alibaba and Amazon offer small business loans
and Uber offers car leasing to entrepreneurs on
their platform that don’t require application
forms, traditional credit approvals, or credit
scoring.

Towards Cashless Society:
Tencent’s WeChat, Alipay, GCash, Kakao
Pay, Paytm, Venmo and M-Pesa all offer
day-to-day payments capability that don’t
require a plastic card to transact—they
are platforms that have created
differentiated payment experiences.
Millennial feels comfortable leaving home
without cash or cards. A society that growing
to be virtually cashless and cardless because
of the huge popularity of mobile payments.

The future of payments is
clearly based on this trend: real-
time, frictionless payments
from one value store to another.
That independent of a physical
payments artifact (like a cheque
or card).

The best retail experiences in the future
will be walk in, grab the wanted goods ,
and walk out.
The grocery store of the future there won’t
be a checkout cashier and taking any
transactional friction out completely.

Financial Inclusion:
In 2000, financial inclusion in Bangladesh
was just 14 percent currently almost 42
percent of the adult population is using
MFS like bKash/Rocket/Nagad etc. bKash
itself has 5,0000000 User.
In 2000, financial inclusion in Kenya was 27
percent and today almost 100 percent of the adult
population is using M-Pesa mobile money
regularly. What Kenya has done in last 10 years is
more than the US has done in the last 50 years.

Fintech Innovation and Changes in near future:
The largest deposit-taking organizations will be
technology players, whether technology leaders are
working out how to scale deposits more efficiently.
Almost 3 (three) billion unbanked will have entered the
financial services system over the preceding 15 years
without ever having stepped foot in a branch.
Every day more people will transact and interact with
their money on a Computer, Smartphone, voice and
augmented reality than those that visit the world’s
collective network of branches of Bank.

More money advice will be dispensed via
artificial intelligence, algorithms and software
than the entire collective network of human
advisors in financial institutions today.
Around a quarter of all daily e-commerce and
mobile commerce will be voice or software
agent driven, and those supporting voice will
get a revenue bump of 25–30 percent compared
to their non-voice-enabled counterparts.

The biggest retail banks in the world will almost all
deliver the majority of their revenue via digital channel.
A dozen countries around the world will be mostly
cashless, including China’s urban population, the
Nordics, Singapore and Australia.
AI will have accounted for the loss of more than 30
percent of today’s jobs in banking; and while some of
those jobs will be replaced with deep learning
specialists, data scientists and so forth.

From Product to Digital experience
Legacy product/Service Future Digital experience
Credit Card Predictive and contextual credit access
Overdraft Emergency credit access
(grocery and healthcare optimized)
Checking, Current Account or
Debit Card
Cloud-based personal value store
linked to a mobile wallet
Savings Account Behavioral savings tools
and prompts
Personal Loan Payment options advice in-store
or contextually
Mortgage Home purchase assistant
Car Loan/Lease Autonomous vehicle access
subscription

Small Business Bank Account Intelligent business value store
(with accounting, taxation and
payments AI)
Business Line of Credit Predictive cash flow analytics
and smoothing
Life Insurance Policy Longevity and after-life management
Health Insurance Coverage Health optimization and monitoring
service
Term Deposit, CD, Investment or High
Yield Savings Account
Wealth builder robo-assistant
Mutual Fund or Investment Product Robo-advisor with net worth manager
Foreign Exchange Service Global wallet add-in

Loan/investment Instead application form-based credit scoring, future
scoring to be data driven, social-based scoring that
credit scores for consumers.
Digital bank has the potential to fulfill the needs of those
who have limited access to financial services and give
affordable loans for small and micro enterprises.
The usages of data analytics, cloud computing, AI, and
blockchain have potential to enable every creditworthy
individual to safe, accessible, green, and sustainable
inclusive finance.

Key Strategy of Transformation
Transforming to Digital Bank The Way of Smart Banking

Digital Transformation race in Bangladeh
Biometric authentication
Check available balances
Transfer money to the bank account
or other bank using NPSB/BEFTN
Utility Bill Payment (BTCL, DESCO,
DPDC etc.)
Perform MFS Transfer
 Beneficiary addition
 Mobile recharge
 View credit card details
The digital payments landscape in Bangladesh
is evolving at an accelerated rate.

Digital Transformation race in Bangladeh
Insurance premium payment
Pay credit card bill for both local and
international currency
Order cheque book
 Positive Pay Instruction
 Meet & Greet
Receive Foreign Remittance
Card-less Cash withdraw from ATM
QR based POS Purchase
E-commerce Transaction
Electronic Fund Transfer
Account statement download

The bigger the ship, the longer it takes to turn..........................
Digital transformation Journey

Digital transformation is not about technology it
is about strategy and new ways of thinking.
Digital transformation is the way that an organization can
gain sustained competitive advantage through the smart
use of technology

It is journey to becoming a new type of
organization that is characterized itself by
Continuous change
Flexibility /Fluidity
Rapid adaptation.
This is not a transformation with
a beginning, middle and an end.
Digital transformation is an enterprise wise
initiative drive by a business need which then
cuts across applications, networks,
infrastructure, security, people, and
everything that is part of the enterprise
landscape.

The first and foremost step in any
digital transformation journey is to
understand the overall goals and
objectives that the enterprise has.
Without a clear, shared and understood
strategy, any form of transformation
(digital or otherwise) is likely to fail.

The transformation leader needs to
be optimistic, determined, and
above all, resilient.
The role of new business leader is
much more strategic, focused on
using technology to re imagine and
reinvent the core business itself.
So who are the “hero” of
transformation?
A central team known as the
“taskforce” needs to be formed that
will be in-charge of digital
transformation for the enterprise. The
head of all departments are equally
responsible for the success of digital
transformation

Organizational culture can be the one of the biggest
enablers, but also blockers, to change.

Enterprise-wise alignment of goal and strategy:
Organization Mission, Vision and Strategy need to redefined.
Need to enable all staff to actively participate to achieve the strategic
goal within target time.
Departmental level silo based initiatives need to align and coordinated
with enterprise wise strategic goal and blueprint.
Organizational strategy, process, culture, behavior and people need to
be transformed to build Digital Native Organization.

Strategic agility :
“Agile’ means being able to adapt quickly and easily to change”.
Strategic agility is about how organizations can respond to changing external
and internal forces, building a strategy that can adapt to new situation.
Organization without strategic agility often set strategy that doesn’t reflect
external change.
An Agile infrastructure that is truly digital ready can dynamically align with
the ever-changing needs of the enterprise. That means allowing more agility
and faster time to innovation, better security, and greater operational
efficiency and simplicity.

Co-ordination and Collaboration:
Need balanced collaboration between the tech and business teams
Need to implement inter division Frictionless communication
 Need to develop policy, procedure and infrastructure for quick and easy
frictionless communication.
Need established procedure for Business-IT alignment
Need standard practice to convert strategic business need to IT system,
platform, product or experience design.

Cloud native Adaptive Agile Infrastructure :
Legacy Infrastructure and lack of centralized management need to be
addressed.
Need required automation and orchestration in right place.
Silo based operation of network, server, storage and security teams need
to be align with centralized strategy.
Labor intensive, slow and time consuming ICT Infrastructure not fit for
agile business demand and need to addressed properly.
Get ready for micro service and containerized application
Apply performance monitoring and metering where needed.
Build Private cloud or hybrid cloud infrastructure

Rapid secured application development (DevSecOps) process and
Platform
Legacy time consuming application development process need to be
replaced with rapid application development agile process.
Need automation and orchestration in application development and
deployment process.
Platform should ready for quick atomic service/micro service deployment
Need to implement secured application development architecture, security
test perform in post production not during the time of development.

Lack of Data gathering and Data Analysis Platform:
Need to develop infrastructure to gather user interaction data in addition
to transactional data.
For better understanding customer need, we need to develop data
acquiring and analysis platform to know their financial need and behavior.
Data need to be gathered from every possible endpoint including central
transactional data, App Using Data, API usage Data, Network Usage Data,
Client Demographic Data, Data From Branches‘ IoT/IT related devices i.e.
Que management System, CCTV, Access Control etc.

API Platform for other business to be integrated:
Need to establish banking as a platform
Need to development banking as a service platform.
Need to development platform and API for other Fintech and Startup to
be integrated.

Integrated life style banking platform :
Platform to be developed targeting financial habit and behavior of customer.
 Platform to be developed for life style banking .
Platform/marketplace to be developed targeting customer financial journey
and to fulfill customer financial need.

Email: shoeb1215@gmail.com
Web: https://www.icontentstudio.com
For Further Query
Or
Assistant
Contact US

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