Idea Transcript
Turning Banking Technology Trends into Meaningful Solutions
Introduction Technology is changing the way customers interact with their bank, impacting deposit services, lending and payments. The most significant technology trends in banking today encompass the areas of:
Compliance and Risk Management
Data Analytics
Digital Solutions
Omnichannel Banking
Lending Innovation
This eBook describes the implications of these five trends and offers a framework for successfully leveraging new technology to create high-impact business solutions.
1
PROLIFERATION OF DIGITAL SOLUTIONS
Innovation in digital technologies dramatically changes the way customers interact with their financial institutions. Mobile technology has transformed consumers’ lives. A smart mobile device provides much more than phone calls, serving as: • The primary tool for capturing (and sharing) memories: camera and video. • A global positioning device.
• A map to anywhere. • Access to e-mail and calendar systems. • A means to surf the Internet. • Storage for passwords and other personal data. Mobile banking services are growing rapidly to include functionality such as checking balances, paying bills, transferring funds, locating ATMs and branches, and remote deposit capture.
Camera
Multi Touch
Cell Tower Signal
Storage
Ambient Light Sensors
Wireless Network
Bluetooth
Compass
GPS
Microphone
Gyroscope
Accelerometer
Mobile is transforming how consumers do EVERYTHING, including how they bank, pay, research and spend.
2
THE RISE OF OMNICHANNEL BANKING
When contacting a call center, customers have begun to expect the bank’s agent will already know who they are and what the inquiry is about. If a transaction started online and the caller needs further assistance, any other channel should pick up on the transaction without any repetition from the customer. Banking customers expect to interact with their institution through more than one channel. In the omnichannel environment, the bank’s channels communicate activity instantly. The graphic on the next page depicts this industry transition in which customer transactions integrate seamlessly between banking channels. The key is to provide self-service tools to the customer for activities best conducted directly online and to provide more advisory services such as planning to save for a college education, with a personal touch. Any transaction or customer interaction should become seamless between digital and personal channels.
Transitioning to Omnichannel Banking
Orchestrated Referrals and Opportunities Data Analytics & Reporting
Seamless Orchestration of Customer Interactions
My Bank, My Financial Needs, My Network
ATM/Kiosk
Digital/Online
Contact Centers
Customer
Branch/Stores
Customer
ATM/Kiosk
Customer
Digital/Online
OMNICHANNEL
Contact Centers
ALL-CHANNEL
Branch/Stores
MULTI-CHANNEL
My Smartphone
My Computer My Branch/Store
My Kiosk
My Personal Profile & Preference
3
THE IMPACT OF DATA ANALYTICS
“There is also huge opportunity for banks with predictive analytics,” states Sirpa Nordlund, Executive Director, Mobey Forum. “From now on, it’s all about the data. With predictive analytics, banks and credit unions can not only generate a 360 degree view of their customers’ financial behavior, they can anticipate their needs and create highly personalized services that surprise and delight them too.” 1 Data analytics plays and increasingly important role in a financial institution’s decision making. Predictive analytics will help guide tactics and set strategies for savvy bank executives. 1. Jim Marous, “Predictive Analytics: Think Big, Start Small … Just Start Now”, The Financial Brand, July 2016
Predictive Analytics Lifecycle Skills
Tooling Analysis & Modeling
Acceptance Collection & Ownership
Governance
Sanity Checks
Data Management
Quality
Customer’s Perception
Deployment and Fulfillment
Frictionless Services
Technology
Creating a data-driven organization Source: Mobey Forum, VODW, 2016 © June 2016 The Financial Brand
4
THE IMPORTANCE OF LENDING SOLUTIONS
Lending via mobile devices, with one-to-one target marketing based on data analytics, can predict quality candidates for online loans. Additionally, as peer-to-peer lending continues to grow, it has the potential to become a threat to traditional banks. Banks have partnered with mobile lending providers to offer consumer loan origination from the convenience of a smartphone, shown in the diagram on the next page. Many small and mid-sized banks are also moving to outsource lending functions that a trusted outsourcing partner can do better, faster, less expensively or even more safely. In the traditional lending area, outsourcing the various functions has become attractive to institutions looking to reduce overhead in consumer and commercial lending operations. All aspects of lending are candidates for flexible, cost-effective outsourcing solutions, including: • Loan origination systems • Imaging systems • Workflow management systems • Collections
Example of Lending via Mobile Device
• Don’t wait for consumers to come to you. • Use your knowledge and your data to better serve their financial needs. • Personalized, preapproved rate sheet, granting consumers perpetual insight into their personal credit worthiness and buying power. • Preapproved funds are just a click or a tap away.
5
TAKING RISK MANAGEMENT AND INFORMATION SECURITY INTO ACCOUNT
A recent CIO Survey from Aite suggests staying current with banking regulations and fraud risk weighs heavily on the minds of financial services technology executives. They need to realize strong information security requires: • Very specific expertise • Continuous training and retraining
• Complex tools • Expensive infrastructure • Management rigor More and more investment is being made in technologies that provide safer systems to protect data. With the expansion of access points to a bank’s customer data, managing entitlement growth should be considered for every device and user. Banks must evaluate security and risk management tools, and entitlements, making it an integral component of any technology deployed going forward.
What is keeping large bank CIOs awake at night? • “Keeping pace with technology while maintaining regulatory compliance.” • “Staying current with banking regulations” • “Fraud risk.” • “The speed at which we need to change and the amount of change needed to stay competitive.”
Source: Aite Group’s 2014 Global CIO Survey
The typical approach for implementing new technology at banks involves working through an evaluation process that defines and budgets for new system deployments. High-level requirements should be scoped at this point in the deployment process. After that effort, the solution moves into an implementation phase. Often, between these two steps, an information gaps develops. As a result, technology implementation occurs without meeting expectations while costs run wild. The typical approach creates a gap in the deployment process.
Typical Approach Creates a Gap
Evaluation Process (Expectations and Requests)
Implementation (Expectations Misinterpreted)
Post Implementation (Expectations and Requests)
High-level Scope Budget Deadline Functionality
Multiple Visions, Multiple Approaches Team Set Own Direction and Define Own Role Teams Only Know Final Deadline Scope Control Issues Integration Testing Scope Unclear
Cost Overruns Deadlines Missed Functionality Missed Scope and Vision Different
?
The solution definition process depicted below closes the gap between sales and implementation steps, seeks to identify true business requirements and defines the exact parameters of the implementation, ensuring that all participants in the deployment are on the same page.
Definition Approach Fills the Gap Evaluation Process (Expectations and Requests)
Budget Deadline Functionality
Definition (Expectations Validated and Set)
Implementation (Expectations Clear)
Defined Scope and Requirements
One Vision, One Approach
Defined Approach and Effort
Each Team Has Clear Direction and Understands Role
Refined Budget, if needed
Clear Deliverable Timelines
Refined Deadline, if needed
Clear Scope Control
Refined Functionality, if needed
Clear Integration Testing Scope
Post Implementation (Expectations Met!)
Within Costs Deadlines Achieved Functionality Achieved
Any new technology deployed in banks must rely on well-defined scope and business requirements in order to deliver intended benefits. A common, well-constructed set of business requirements results in on-time and on-budget technology implementations.
Summary
Customers will interact far more frequently with their bank, albeit less in person and mostly via digital channels. Financial institutions will also utilize data and sophisticated real-time analytics to identify, target and service customers while mitigating risk and devoting resources to information security. Banks deploying increasingly complex technology solutions must rely on comprehensive business requirements and a solid solution design in order to gain benefit from new technology deployments. A process that identifies requirements leads to a thorough design that ensures that a financial institution will leverage new technology trends instead of reacting to them. The benefits of this comprehensive approach provides banks with greater efficiency and speedier customer service through increased automation.
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