By Larry Fritz, Senior Account Executive
It feels like banking changes every day. I’m constantly told new banking industry trends, technologies and predictions, what to do, and who to target. It’s easy to get weighed down by everything.
To gain some clarity and hear from true experts, our Banking and Financial Services Team, including myself, attended and sponsored American Banker’s Digital Banking 2016 in New Orleans: a conference for banking professionals to collaborate on hot topics such as cybersecurity, mobile banking, omnichannel, and analytics. Based on conversations and sessions we attended, we developed a list of things NOT to do, amidst being told all the things you should do.
1. Don’t Get Frustrated by Security.
“We will never solve the information security issue.” – Tom Ridge, First Secretary of the Department of Homeland Security.
Ridge was one of the best keynote speakers at the conference and he believes there will never be an end-all-be-all solution to our security challenges. Hackers and frauds are more capable and better-funded than ever. To protect our information, we need to be vigilant and adaptable. Our solutions and protections must be able to change as quickly as the methods for breaching security do.
In a 2015 study led by the IBM Institute for Business Value, Winning the face-off against fraud, only 56 percent of the executives surveyed believe their organizations are in reasonable control of fraud threats. So, if 56 percent say they are in control, what about the other 44 percent of the market?
So my question is how? How can you leverage agility to fight off fraud?
As the IBM study puts it:
“Analytic agility – The cycle time between discovery of a new fraud pattern and the subsequent adjustments to the transaction scoring process to interdict it is a key factor. Of the Exposed Neophytes, 91 percent reported a cycle time of four weeks or greater just to discover the pattern, and 84 percent reported requiring at least another four weeks to update their scoring engines – for a total cycle time of eight weeks or greater. Within that eight-week cycle, fraud within that pattern will persist.
At the other end of the spectrum, 24 percent of the Differentiated Leaders reported their organizations took less than four weeks to discover fraud, and 34 percent indicated less than four weeks to update their transaction scoring process. It’s impossible to anticipate, identify, and protect against everything. Instead, organizations need to focus protection on the nexuses and places where they can practically implement protective and detective measures.”
2. Don’t Restrict Customer Interactions to One Channel.
Warren Buffet and Mark Zuckerberg are sitting at a table reviewing documents. Buffet is flipping through papers. Zuckerberg is swiping through his phone and tablet.
The omnichannel approach is one of the newer banking industry trends. Modern customers, including millennials like Mark Zuckerberg, use many devices to interact with their bank. They like the ability to start a transaction on a phone, continue it on a laptop, and reach out to a call center for questions when needed. This is the omnichannel experience. All the channels are integrated on the back-end to make the customer’s experience seamless.
Don’t confuse this with multichannel.
A multichannel approach simply provides your customers with different ways to contact you – a phone call, online form, or mobile app. Multichannel systems are not linked on the backend, so each time a client reaches out, they must start over and submit the same information rather than pick up where they left off.
In her blog, Omnichannel: the new normal for retail banks, Alison Wilkes, General Manager, EMEA Banking Division, FIS, writes, “From the customer’s perspective, omnichannel banking introduces consistent interactions with the banking brand across the various touchpoints. The bank will be able to analyze the information being fed in from different channels so that it can build up a detailed and accurate picture of the customer’s preferences and behavior. The boom in smartphone apps coupled with this more detailed customer view means that banks will be able to offer app-based services such as budgeting or financial planning via the mobile: a relatively untapped service to date.”
3. Don’t Let Data Gather Dust.
Banks store a ton of data about their customers and processes – use it!
Use your customer intelligence to make better budgeting decisions, leverage business rules, provide personalization, and build an emotional connection between your customers and brand.
In IBM’s whitepaper, The Cognitive Bank: Redefining Banks and Banking, they discuss how cognitive capabilities drive agility and operational efficiency in firms. Cognitive capabilities allow a firm to research topics, news, and trends that affect strategic decision making in a more comprehensive and consistent way.
“Whether you’re evaluating corporate prospects, clients, vendors, or new markets, the analysis of structured and unstructured data provides a complete picture, supporting informed and timely decisions.”
For example, a leading financial services firm wanted to provide its sales team with a single solution for prospecting and managing the relationships with institutional clients. To do this, it used IBM Watson for Corporate Intelligence to combine real-time data sources, including proprietary and public sales prospect lists, news and social media, peer comparisons, and next-best offerings. This improved their leads, prioritized their efforts, and facilitated the sharing of information across the enterprise.
4. Don’t Forget About Employee Satisfaction.
With so much focus on customer satisfaction, it’s easy to forget about your own employees. But employee satisfaction should be more than just a part of new banking industry trends.
Empowering employees and keeping them happy should be a continuous goal of every bank. Richard Branson, an English entrepreneur and philanthropist, explained how we should view employees as assets, not costs. To draw millennial talent, banks have to lighten their rules. Yes, this may mean unblocking Facebook from your systems…
The younger generation approaching the workforce is coming with a particular expectation: instant gratification. They want to support the greater cause, know that they’re contributing to the organization’s bottom line, and – oh, by the way – they want this process to also be fun.
With some of our current clients, we see use-cases where they turn everyday tedious tasks and challenges into gaming experiences. This is known as gamification: rewarding and challenging employees in an atmosphere of friendly competition to not only boost morale but increase productivity.
5. Don’t Be Afraid to Change Your Approach.
Financial institutions are accustomed to and almost anticipate a lengthy process to implement new technology within the organization, and why shouldn’t they – that’s how it’s always been.
Until recently.
A new approach to technology implementation is the hybrid agile approach. The hybrid agile approach is one we find to be extremely effective. So effective, that banks are starting to require it.
The hybrid approach is not an exhaustive, detailed, perfect design, but digestible chunks that you can quickly adapt. So instead of waiting two years for a complete solution, within two months you receive a “chunk” of the solution that you can leverage and start using. The hybrid agile approach drastically decreases your time-to-market and you keep improving on those “chunks” until your solution is complete.
Google is a good example of an organization that releases incremental features versus deploying large complicated updates.
The “next shiny thing” is always in sight when it comes to banking industry trends. Hopefully, this list provided you with direction and clarity in an always-changing sea. All-in-all, banks need to be on their toes, ready to make moves and changes to sustain the needs and wants of customers, compliance, and security.
So what’s next? Where do you go from here?
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