Digital Banks

Building a Digital Bank: Crucial Questions to Ask

For some time now, the bank industry has been de-layering and fragmenting as big tech, and challenger or digital bank chip away at the value supply chain. This neo-normal has developed many opportunities for innovation and collaboration in the bank industry; however, it has also exposed banks to stark choices like the risk for providing competitive advantages or staying focused on perpetual technology innovation.

As the share and revenue leak out of the banking industry to other sectors, especially bigtechs or SaaS-based companies, ECS Fin advocate that the time has arrived for banks to challenge their traditionally-established beliefs and conventions. It’s time to decipher their market trends and the building blocks to sustain their relevance in this zone.

Rediscover the purpose

Shape new business models

Quest for partners in unconventional ways

Stay committed to constant innovation

What to do when building a digital bank

Our senior executives have distilled these three lessons about ‘what to do when building a digital bank‘. Let’s dive deep to understand those strategies.

Rebuild the platform, Don't Redecorate It

It’s quite tempting for financial institutions to build a digital bank with a traditional banking model in terms of ”services and products.” Honestly speaking, please don’t walk on this road. Simply automating the legacy internal processes and systems won’t deliver the exact results you desire/quest. It would be the best alternative to build new solutions in order to optimize the new experiences for customers and how they may save their time and hassle.

Zenus, a new US virtual bank, planned to go live in 2021 for global clients, allowing individuals and businesses to open borderless multi-currency accounts in the United States without proof of residency. By using ECS’ IMS Payment Hub, Zenus bank was able to relish a completely digital bank to automate all banking services from customer onboarding to complete end-to-end transaction processing from inception to processing to settlement and beyond.

Fostering Financial Insecurity

One of the biggest threats to building the digital bank is maintaining customers’ financial security while providing a seamless experience. ECS payments solution is specially designed to deal with all challenges usually faced by operations and various user groups.

We contemplate processing modules by clearing systems to implement rules relevant to different payment channels and easily adapt to market practices and regulatory changes.

Support different integration methods and formats for the clearing channels (WU, NIUM)

Provide interfaces to configure complex routing rules based on transaction currency, purpose codes, amount limits etc.

Engage different transaction profiles to payment based on the selected route.

Route payments between multiple clearing channels based on configured routing rules.

Provide a series of payment processing modules (WU, NIUM, SWIFT).

Process the payments according to the workflows expected by the clearing channels.

Critical questions for building digital bank

Before setting an objective to create a new digital bank, senior executive teams should ponder their operational, strategic planning, and the mechanics to build and manage the new business. Below shared are three key topics for consideration.

Tech/Digital Capabilities:

Can we scale technological capability and incorporate a flexible operational model? Do we have any specified organizational structure, governance, and hiring or reskilling approach? How can we proceed with tech architecture and vendor or partnership strategy?

Distribution Strategy:

Do we have a robust distribution strategy? Or do we have solid measures for customer acquisition, servicing channels, and branding and marketing? Do we want to consider a partnership strategy in the service or telco industry?

Precise Business Proposition:

Do we have a precise and clear business proposition? Do we have enough strengths in innovation, customer segmentation, product and pricing strategy, or customer value proposition? What is our competitive advantage?