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Key challenges in Banking & Financial services: Which services will be in demand in future?

The banking industry is going through a radical shift due to disruptive technologies, intense competition, and mounting regulation and compliance pressures. Banking industry challenges can be resolved by the technology that’s caused this disruption, but the transition from legacy systems to innovative solutions hasn’t always been easy. 

Sumit Sood, the Head of Banking & Financial Services at Coforge Business Process Solutions shares some insights into some of the key challenges ahead for banks.

Q1. Based on your client interactions and market awareness, what are the key challenges you see in the banking & financial services industry? 

What we are seeing across Banking and Financial Services is that automation solutions in the market claim significant benefits for the customers. However, when it comes to the actual execution on archaic processes with significant complexity they fail to deliver the promised benefits. This drives Banks to trust technology less unless clear and tangible benefits are committed upfront - increasing the risk for the service provider, typically a Business Process Solutions & Transformation firm. As an example, there is a need for automation solutions that can significantly reduce the cycle time to be able to provide a good sense of how much "real" savings can be achieved. 

Talent continues to be a key challenge and some of the mandates to return to office is limiting top talent pool access. This is further skewing the demand and supply of key talent and will remain a challenging area for the industry to tackle. 

Specifically touching on the Cards and Payments ecosystem, it is the issue of Card Issuers and acquirers stuck with legacy systems that deter them from overhauling the technology base, thus proving to be an impediment to driving efficiencies while cost and regulatory pressures continue to increase. We see this play out much more with regional banks than with larger banks and financial institutions. 

Q2. Considering the recent scenario, how do you think the demand across banking, cards & payments is going to shape up as far as service providers are concerned? 

Overall we don’t see a decline in demand from the Banking sector. 

For example in Cards & Payments / Lending market that caters to subprime portfolio, we think that while spending and payments will see a slowdown, collections and disputes will be on the rise on account of non-payments and cancellations. Hence Risk Management, Credit and Collections will see continuous or enhanced demand. 

The need to shift from credit card to prepaid and bank account linked debit card programs, especially those involving government funding will increase. Simultaneously, newer entrants in payments space will impact the overall payments space - however, prepaid cards will continue to grow owing to the ability of these to help build credit worthiness for subprime/nonprime customers. 

We also see Retail Banking and Commercial Banking spaces continue to do well driven by higher interest rates and gradual normalization returning back to the industry post pandemic. 

Q3. Is there a specific area in Banking that you see interesting trends in? 

Yes, as everyone is aware, Artificial Intelligence (AI) tools are becoming smarter and more mainstream. We feel that AI/ML (Artificial Intelligence/ Machine Learning) will start become mainstream in areas like Customer Experience solutions. We see higher customer acceptance to solutions like Robo Advisory, AI-led Chat Bots and this momentum is expected to continue. 

Additionally, Cybersecurity, Financial Crime especially AML/ KYC, and Portfolio / Credit Risk Management are expected to remain strong area of focus in the backdrop of higher credit offtake owing to rise in digital transactions and potential job market challenges. 

This series will continue with additional insights into the Banking, Financial services industries based on the Coforge BPS consulting and services delivery experience as we go through a volatile phase in the market. For any feedback, comments or suggestions please email

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