The Future of Banking: Technology, Data, and Customer-Centricity

Stefan Stignäs, Head of Customer Journey Management, SEB

Stefan Stignäs, Head of Customer Journey Management, SEB

Stefan Stignäs is a banking veteran with over 20 years of experience. He has held pivotal roles at SEB, including setting up business banking in Sweden and leading digitization efforts in the Baltics post-Lehman crisis. One of his most notable accomplishments is implementing a unified banking core system across Estonia, Latvia, and Lithuania that accelerated development and market reach. 

Could you please provide an overview of your background and job role within the company?

My role as Head of Exploratory Banking and Strategic Partnerships is to foster long-term business growth. In anticipation of our future needs, our bank has developed a new strategic direction, Vision 2030. We anticipate that by 2030, 40% of our revenue will come from products and services that have yet to be invented. We established an exploratory banking division to discover innovative methods to use data and form strategic alliances. We recognise that data and the interconnectedness between various stakeholders in the financial ecosystem will be vital in future banking operations. As a result, we aim to create services based on client data and distribute them through our clients' preferred channels. This approach ensures that we provide banking services to all our clients, regardless of location.

What are the key challenges the sector faces, considering that the financial landscape is constantly evolving?

One of the main challenges is in recognising that data is the necessary raw material for providing services and solutions. Many fintech, regtech, and other firms compete to access this data, particularly in the payments and savings sectors. This data is also sought by Enterprise Resource Planning (ERP) systems in the corporate world. Everyone is striving to be the platform that has first access to the data, which presents a challenge for all banks because there may be other choices for this platform. There is, however, a silver lining. Banks are regarded as trustworthy establishments. As people become more aware of the value of their data, they place more trust in banks than in other players, and this trust is an invaluable advantage.

“The future of banking is primarily dependant on products that are yet to be invented; as traditional technologies prevail, the sector witnesses an incremental and gradual growth towards innovation” 

However, the challenge is establishing a standardised financial ecosystem while maintaining room for competition, and these standards are yet to be set. The PEC 2 payment standard is an attempt at standardisation, but it falls short in the emerging open finance landscape, which we anticipate will materialize within the next two years. Policymakers have learned several lessons from this situation, and we may see a shift towards charging more for standardised APIs. The current challenge is that everyone in a fragmented market scrambles for data. To fully realise the potential of data, it is necessary to consolidate and standardise how it is distributed.

How are you and SEB looking to mitigate these challenges?

Our priority is improving customer interaction and learning about their preferences and patterns. At SEB, we aim to create a collaborative environment where we can comprehend the customer’s needs and preferences. This understanding then guides us in strategically partnering with other entities to facilitate a seamless customer data-sharing process. The customer benefits from data sharing by receiving a service or product tailored to their needs, which would not be possible without data sharing.

In the long run, we will witness a shift in the traditional banking model as in the future, and data will be as valuable as money. Data is currently being collected, anonymized, and sold, with someone profiting from it. SEB intends to change this by transforming data into a digital asset. As a bank, we can facilitate this process and earn a commission on the asset value of your data. We believe this is the direction banking will take in the next decade.

What upcoming technology do you think will change the face of the banking sector?

The primary challenge in the rapidly growing financial sector is managing legacy systems that function as the backbone of banks but can be difficult to adapt to new regulations and standards. However, the emergence of middle-layer software suppliers is an intriguing development. These firms offer more mature solutions enabling banks to enhance their time-to-market capabilities.

While technologies like blockchain can potentially disrupt the industry, widespread adoption might take longer than five years. Instead, tangible progress is being made in electronic currencies governed by states, for instance, Sweden's e-Krona. This shift to digital currencies necessitates innovative approaches to data storage involving shared ledgers or blockchain-like technologies. Traditional technology in my opinion, will prevail for the foreseeable future, while financial innovation advances incrementally and gradually.

What advice do you have for aspiring professionals in the banking and finance sector?

My advice is to seize the opportunities presented by the open finance landscape. While there will be obstacles, such as increased client mobility and competition, enabling customers to choose where they conduct their banking will keep banks relevant in such an ever-evolving sector. Banks, however, must define their role in this ecosystem, whether as an orchestrator, complementor, or supplier. The future of banking will see a significant portion of revenue coming from innovative, tailor-made products consumed on various platforms. For instance, we're building connections into ERP and incubator platforms to facilitate convenient one-stop shopping for clients. This approach allows us to acquire clients in new ways and offer them a compelling value proposition that encourages their return to our platform.

Financial

ERP

Blockchain

Storage

Enterprise resource Planning