The author proposes solutions such as auditing the bank's payment technology stack to identify gaps and creating a phased migration plan to modernize the technology. Banks also need to modernize their payment infrastructure to support new payment types and hyper-personalization. By consolidating all data into a single repository and applying AI and ML, banks can optimize transactions and offer personalized payment experiences, effectively competing with neobanks.
Key takeaways:
- Neobanks are gaining market share by offering personalized online banking experiences, using AI and machine learning to customize the loan repayment process to individual preferences.
- Traditional banks need to shift from viewing payments as mere transactions to opportunities for customer engagement, and need to invest in data collection and analysis to improve customer experience.
- Many traditional banks are hindered by outdated payment systems that can't be quickly adjusted to support evolving customer preferences or support AI/ML-driven insights.
- To compete with neobanks, traditional banks need to modernize their payment infrastructure, consolidate all data into a single repository, and apply AI and ML to optimize every element of the transaction.