Want to build a successful digital bank? Start with fintech collaboration
IDC and Backbase just released our second edition of Fintech and Digital Banking 2025 infobrief.
One thing is abundantly clear: Asia Pacific banks are going back to the drawing board on their digital transformation programs.
The stellar success of digital banks is a key reason, with most enjoying three times the growth in customer bases compared to traditional banks.
The report highlights digital capabilities as being the key to resilience and winning the race to recover from pandemic-related setbacks.
While the APAC banking landscape lost some neobanks and fintechs due to COVID-19 challenges, the remaining neos and second-round players are posing a significant challenge to incumbents with strong post-pandemic propositions.
But incumbents can still win, it just takes collaboration with innovative fintech partners.
Here’s what to do.
Understand the intention behind digital adoption
Organizations need to understand that undergoing a digital transformation for transformation’s sake won’t be effective.
When they are looking at introducing or revitalizing digital capabilities, the focus needs to be on two things – the customers, and the problem the organization is trying to solve.
With many APAC banks racing to revitalize innovation initiatives due to the pandemic, many often make the mistake of rushing to be the first in launching a new platform or feature. This results in many overlooking the fact that today’s customers are looking for very tailored experiences. Hence, banks need to understand their customers’ main priorities and tailor product interactions to create meaningful user experiences.
Similarly, banks need to focus on the problems they are trying to solve for external and internal stakeholders. An example I’ve encountered was when a bank launched a new digital platform to eliminate the long waiting time associated with traditional loan applications. While the app managed to reduce the time required by customers to submit their loans, the application process still took a long time as the platform failed to resolve the core backend issue of departments working in silos.
Banks that can firmly identify customer needs and their business objectives earlier on in the game will have one foot in the door when it comes to digitalization.
Engage the right fintech partner
It’s about surviving the test of time.
Choosing the appropriate fintech partner is a crucial step for banks. The goal for digitalization is not to create something that’s resilient just for today, but one that’s also future-proofed.
So it’s crucial to engage a partner who shares the same vision, commitment, and outlook to have a fruitful partnership and perfect synergy.
I’ve recently shared in a webinar hosted by Fintech News Network on how Mambu, Amazon Web Services and Backbase collaborated to build UNObank, a digital bank from scratch.
As highlighted in the IDC report, 60% of bankable customers in the Philippines are willing to shift to banking players that are more digital, and that the proportion of the unbanked and underbanked will be cut by about half to 20% of the country’s bankable population.
In a CNN interview with UNObank’s CEO Manish Bhai, he mentioned that “today’s consumerism is all about putting the customer first, and that’s our guiding principle.”
A common ethos – to build a customer-first bank by putting the customer wants at the center of our strategy – was the main reason behind our successful partnership in the Philippines.
To thrive in a post-pandemic world, organizations will need to keep their customers at the center by focusing on removing silos, providing greater levels of convenience, overcoming financial literacy challenges, and improving accessibility to lenders and payment products.
Basically, banks need to remember to put people first.
Hierarchy is a thing of the past, but collaboration, experimentation, and design thinking will be the norm. By partnering with fintechs that can work in an agile manner, and operate in a way that looks at processes in an end-to-end fashion, digital banks can stay ahead of the curve and provide customers with the pleasant user experiences they seek.
About The Author
Riddhi Dutta is the Regional Head for ASEAN & India at Backbase.
Riddhi oversees Backbase’s sales and go-to-market success for his territory in Asia Pacific. He helps financial institutions turn their digital ambitions into reality, helping them with designing digital transformation initiatives which are feasible, tailored, and creative with instant business value.
Riddhi has an excellent track record of championing legacy modernisation initiatives in several banks across the region, where he consulted and helped banks move to open banking platforms, including modern core banking and treasury solutions. Prior to joining Backbase, Riddhi held several senior roles at Infosys Finacle, Fintellix Solutions and ITC Infotech.
Riddhi earned a Masters of Business Administration in Marketing and Systems from the University of Delhi.