In today’s rapidly evolving banking landscape, digital transformation has become a vital driver for success. However, a recent infobrief commissioned by Backbase highlights a concerning trend – a staggering 70 percent of digital banking projects in the Asia-Pacific (APAC) region have failed due to their costly and time-consuming nature. This article delves into the reasons behind these failures while shedding light on a collaborative approach proposed in the report to achieve sustainable digital banking architecture.
Percentage of Failed Projects and Continued Preference for In-House Development
The infobrief reveals an alarming 70 percent failure rate of digital banking projects in the APAC region. Despite these failures, the report also indicates that 65 percent of mid- to large-sized banks in APAC continue to opt for building their own engagement banking platforms. This persistent preference for in-house development begs the question – what can be done to address this issue effectively?
Purpose of the IDC Infobrief
Recognizing the urgency to find a solution, Backbase commissioned the IDC Infobrief as part of a series of consultative guides aiming to help banks evaluate a more effective platform strategy for digital customer engagement. This report proposes a collaborative approach that strikes a balance between “build” and “buy” strategies, enabling banks to achieve a sustainable digital banking architecture.
Benefits of a Collaborative Approach
The report emphasizes that by leveraging ready-made solutions and collaborating with digital banking platform providers, banks can accelerate their customer-centric transformation while avoiding the pitfalls of in-house development. This collaborative approach allows banks to tap into the expertise and resources offered by external providers while freeing up their own resources to focus on their core competencies.
Evaluating digital transformation goals
To make informed decisions, banks are advised to carefully evaluate their digital transformation goals and assess whether building a solution from scratch is the most effective approach. By taking into account the unique needs, capabilities, and limitations of their organization, banks can determine the optimal blend of in-house development and external collaboration to achieve sustainable digital transformation.
Focus on accelerated and differentiated digital customer engagement
Ultimately, the goal of adopting a collaborative approach is to drive accelerated and differentiated digital customer engagement in the APAC region. Banks that embrace this approach can deliver seamless user experiences, personalized offerings, and innovative services, setting themselves apart from competitors in an increasingly crowded market.
Advantages of Collaboration for Banks
Collaboration with external providers offers a multitude of advantages. By tapping into the expertise and resources of platform providers, banks can gain access to cutting-edge technologies, best practices, and industry insights. This allows them to benefit from rapid development cycles, reduced time-to-market, enhanced scalability, and ongoing support, all while maintaining control over their digital banking strategies.
Preference for In-House Solutions in APAC Banks
Traditionally, many banks in the APAC region have chosen to build their own in-house solutions for digital engagement banking platforms. While this approach allows for customization and control, it often leads to project failures, delays, and significant costs. The IDC Infobrief encourages banks to reconsider this preference and explore a collaborative approach that offers a more efficient and sustainable path to digital transformation.
The alarming failure rate of digital banking projects in APAC necessitates a shift in approach. By embracing a collaborative approach that balances “build” and “buy” strategies, banks can accelerate their digital transformation journey and achieve a sustainable digital banking architecture. The IDC Infobrief commissioned by Backbase provides valuable insights and guidance for banks to navigate this challenging landscape successfully. To access the full IDC Infobrief titled “Accelerating Customer-Centric Transformation by Balancing Build and Buy – A Collaborative Approach Towards Sustainable Digital Banking Architecture,” please visit the Backbase website. Make informed decisions, embrace collaboration, and unlock the potential for customer-centric transformation in the APAC region.