For all the talk of leveraging big data and gaining a predictive appreciation of what the customer wants, genuine personalisation is in its infancy
Each bank is at a different stage of its digital journey and is struggling with its own challenges for each of its stakeholder constituents (eg. employees, customers, vendors, etc). It is important to recognise the journey stage a financial institution is at. Before that, it is even more critical to identify the chokepoints that are hurdles in their fast-paced digital journeys.
1. Coding Pandemic
2. Sluggish segmentation and personalisation
3. Integration Insanity
4. Quagmire & Queues at the CIO’s door
The most cursory look at the technology budgets of large banks over the last few decades reveals significant year-on-year increases, rather than the logical lowering of costs one might have expected with enhanced automation. Solving a problem from a purely technology paradigm and in a piecemeal manner has proved counterproductive. For every one problem solved in this manner, several more have been created, adding to the rampaging complexity in the financial services industry.
Building, maintaining and extending legacy systems while trying to stay relevant in changing times has led to a Coding Pandemic. The code bloat assumes monstrous proportions as new services (apps) are added constantly and indiscriminately. Look-over-your-shoulder banking demands a constant game of catch-up as banks rush to offer the newly introduced apps competition just announced as a differentiator. Long before each service stands scrutiny as a unique and viable business proposition, the silo driven system must work with hastily written and overwritten reams of code and patches.
Industry-speak is peppered liberally with ‘customer journeys’ and 'customer digital decision journeys’, but segmentation efforts are sluggish, and personalisation, sloppy. For all the talk of leveraging big data and gaining a predictive appreciation of what the customer wants by tapping into past and present behaviour, and contextual intelligence across channels, genuine personalisation is in its infancy. This results in muddled products and blunt targeting. Clever demonstrations of what Scott, a customer of the bank for 3 years might be able to do in his time on the tube between home and work, from choosing the ideal mortgage product to video-conferencing with his wife Janet, and his relationship manger, juggling funds between multiple accounts, and smiling at a confirmation that just pinged on his wearable device (will Android win this war?), as he gets into that all-important work meeting, is the sort of stuff that has spawned slick TV commercials on future banking for years, and created excitement at industry expos. The fact remains that the bank has not invested enough effort in knowing Scott better, or understanding his needs. Here lies a huge problem and a gigantic opportunity. Digital energies, properly harnessed, will revolutionise the ways in which financial services are created and delivered, with Scott firmly in the centre, and with a steady eye on the life-journey return on investment.
Integration Insanity is a natural consequence, with silos of disparate technology, high failure rate of integration and devastating delays and reputational damage. Aggressively built with a 'winner takes it all’ approach, technology vendors do little to ensure interoperability. Locking in customers with this foot-firmly-in-the-door technique, results in technology being an impediment, and repeatedly failing to live up to promises of transformational agility.
Given the complexity built into systems, the simplest change request finds its way to the CIO’s door. Financial Institutions have long complained about being held to ransom by technology vendors, and here arguably lies the genesis for in-house technology operations that have over time, dwarfed the core business of the bank in manpower and effort invested. The build vs. buy dilemma was created by the inability to find common ground on the urgency for agility, and at what price. The business user needs to immediately test an innovation. Split-test the innovation by a-priori segments. Interrogate data in reports that are capable of being structured on the fly. Conventional turn-around times that were exasperating at the best of times, are simply unacceptable in digital times. The queues at the CIO’s door are the making of decades of technology adoption decisions that digital reconstruction will do away with. But to enthusiastically herald the end of IT as a role is premature. Business-enablement is still largely template-driven. Calls to IT continue. But there is a palpable shift in the manner of engagement. Business, Technology and Operations have a better appreciation of their respective priorities and the need to work together to unleash digital potential.
Banks’ most frequently expressed concerns centre around Risk Mitigation; Integration; and Change Management. These become the final barriers to adoption, which a digital solution must address.
Intellect’s solutions are centred around the customer. We strongly believe that the wiring of the Anatomy of Customer Experience and Business Kinetics (of the bank), drives the magic of digital.