Tino Kam, Head of Transaction Banking Solutions at Nordea, recently shared insights with Finextra Research about the bank’s primary goals and forecasts for 2021. He emphasized how the disruptions brought about by regulatory and technological changes can positively impact the financial services sector.
Kam reflected on the significant influence of COVID-19 on financial institutions, stating, “2020 was an unprecedented year, and it is evident that certain trends have been fast-tracked.” Notably, the shift in customer behavior—both consumer and corporate—has led to heightened expectations for digital, instant, and contactless services.
Corporate clients of Nordea are increasingly transitioning their business models from offline to online, necessitating a rapid enhancement of the bank’s digital capabilities to meet this evolving landscape. As Kam noted, transaction banking is undergoing swift and transformative changes due to industry regulations and innovative technologies.
He highlighted the challenges posed by new entrants in the banking sector, which often operate without the regulatory burdens that traditional banks face. This pressure can strain resources, limiting the ability of established banks to invest in customer-focused enhancements. Therefore, for institutions like Nordea, it’s crucial to seek strategic partnerships, particularly with fintechs, to boost capabilities and enrich customer experiences through superior user interfaces and data utilization.
Regarding regulatory challenges, Kam mentioned that regulators are working to ease entry barriers for third-party payment providers, thereby fostering competition and reducing costs. A prime example is the P27 initiative, which aims to establish instant cross-border, multi-currency payment infrastructure in the Nordic region.
Kam expressed optimism that regulation could serve as a catalyst for opportunity rather than merely a cost burden. This includes potential new revenue streams and business models centered around technology and data, enhancing personalized customer experiences.
He emphasized the importance of data analytics in monetizing services and supporting client needs. Additionally, Kam noted the rise of payment initiation through non-bank channels and the embedding of payments within various platforms. Cloud technology plays a pivotal role in this evolution, enabling banks to enhance cost efficiency and agility while facilitating data-driven solutions through faster rollouts in collaboration with fintech partners.
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