Tablets for the Bank Workforce

Tablets for the workforce
Riding the crest of the technology wave, banks today are making a beeline for tablets for the use of their customer-facing workforce. While most banks have acquired tablets by the thousands, quite a few have gone the BYOD (Bring Your Own Device) way. This eagerness on the part of banks to portray a tech-savvy image has in turn fueled the need for ready-to-deploy solutions compatible with tablets. This has thrown up a slew of products, developed by both in-house developers and IT vendors; however, most of them come across as mobile solutions rehashed to suit the tablet.
Tablets offer some compelling advantages. They are light and portable and the long battery life allows for a full day’s uninterrupted work. Their built-in cameras make it easy to click photographs. Some tablets like the Samsung Galaxy Note and the Windows 8 come with a Stylus, which can capture customers’ signatures, eliminating the need for an additional peripheral device. Most high-end tablets have fairly good cameras capable of Remote Deposit Capture and come with scanning and OCR software, which allows the capture of documents with ease. Ruggedized tablets, which can withstand inclement weather or the rigors of travel, are already available. Biometric support can be incorporated if banks deem it necessary.
All things considered, the tablet holds out immense promise for being the one “do-it-all” device. A financial advisor can demonstrate to clients all the “what-if” scenarios pertaining to a particular financial product or plan. What’s more, clients can play around and conjure up a few scenarios on their own! Tablets bearing banks’ logos make for really impressive welcome gifts for high net worth customers who have had their fill of the more plebian enticements such as watches, ties, bags, movie tickets and so on.
For the executive on the go, a tablet is a better option than a mobile phone for reviewing exceptions and issuing approvals.
It’s more convenient too. Tablets can be fixed to any surface and turned into touch-enabled banking kiosks to ease up long queues in branches by offering a self-service option to customers.
Thus, tablets offer a great deal of scope to ideate and take banking to a different level. The challenge lies in designing the right solutions to work on this new medium. The existing ones show significant promise but none evoke the “WOW” factor. Also, while there are many applications enabling customer activities, there isn’t enough catering to staff needs. Ideas are hard to come by and transforming them into workable applications is harder still. However, there is no denying the potential for such solutions, and it is only a matter of time before somebody gets it right.

Building compliance with enterprise-class components

Does the banking sector really need more regulation than it already has coming? A UK IT trade body is proposing ‘enforceable infrastructure standards’ after an IT disruption in one of the country’s premier banking institutions financially excluded many customers for almost a week.
The process of regulatory introspection unleashed by the 2008 meltdown holds enough promise to have an ‘enforceable’ impact on banking IT infrastructure. The impending regulatory regime will be nothing but demanding and in that context the point can be made that existing banking infrastructure probably will not cope.
The average banking system today is a multi-layered composite of different eras – silos from product-centric days, medleys created by the M&As and the discrete bolt-ons of periodic modernization. Consolidating data from this archipelago of systems, processes and applications and presenting it in the unified, real-time format required by current regulations can have an adverse impact on the time and cost of compliance.
Note that a unified, real-time view is not merely an imperative for compliance. It is also a fundamental prerequisite for the customer-centric 360 degree model that almost every bank is attempting to build.
But creating a truly integrated enterprise architecture out of the existing patchwork of systems is a herculean task rife with operational hazards. Banks need a model that combines the truly transformative potential of rip & replace strategies with the peace of mind of phased rollouts.
The emergence of componentization as a motif in the banking solutions ecosystem might provide banks with the golden mean. The componentized approach allows banks to modernize in phases, and do so at a granular level.  It also enables the replacement of traditional silos with enterprise-level components that integrate systems, processes and data across LoBs and functions to create a unified view of the business. Banks can also design their component deployment strategies around their immediate business objectives, like the need to capitalize on emerging opportunities in specific customer, product or service segments. Most importantly, componentization minimizes disruption.
As long time perceptive users of technology, banks do not need a set of enforceable technology standards to ensure their IT systems are up to potential. What they need is a transformative model that delivers to pragmatic requirements of time, capital and continuity. Componentization has the versatility to tick all those boxes.
Read our previous blog in the “Simplified Banking” series

Simplify, to give your customers a better experience

If unhappy customers are indeed the greatest source of learning, then the banking sector is sitting on a gold mine. Since 2011, the proportion of customers planning to switch banks has risen from 7% to 12%. Only 37 % are satisfied with their banks’ understanding of their needs and preferences and only 44% think that products and services are adapted to their needs. A majority is just not thrilled with their banking experience.
Since when did banking become about experience? Ever since the informed, empowered, connected customer took control.
Nothing is any longer simply a product or service; everything is a lifestyle choice. And banking customers are demanding the same kind of lifestyle experiences that they are used to getting at other businesses. Experiential benchmarking is now a cross-sectoral sport – if my retailer can do it, why can’t my bank?
Banks understand the business value of delivering choice, convenience, personalization, experience and value in every transaction to their customers. But existing technology infrastructures are simply too complex to deliver a consistent experience across multiple product/service portfolios, channels and consumer devices.
Experience design starts with an intimate 360-degree understanding of individual customer behaviors and needs. Then, this understanding must be constantly refined, using real-time insights, and applied in a way that is contextually relevant to the interaction. It is also imperative to ensure that the experience is seamless and consistent across multiple channels and devices. In an age where customer touch-points just seem to proliferate, banks need to be able to deploy emerging access options without diluting the overall experience. IT transformation is critical to deal with the sheer scope of the task at hand.  Traditionally, that has always brought its own challenges of risk, cost, timeline and complexity.
But it doesn’t have to be like that anymore. Phased deployment strategy leveraging componentized banking platforms promise a far less stressful journey to comprehensive transformation. This approach allows banks to progressively modernize by deploying components to address transformation exigencies, like customer experience or process or product/service innovation, with minimal disruption. It is transformation that’s both sweet and simple
Read our previous blog in the “Simplified Banking” series

Managing costs through enterprise-class components

In 2011, global banking ROE dropped to 7.6%, significantly below the average cost of equity.  Industry profitability is currently hovering at around 8%, down from the pre-crisis levels of 14-15%. Revenue growth continues to be weak, if not in decline, across most markets. The cost-to-income ratio, on the other hand, seems stuck at an unhealthy level of 60.
Across the world, bankers are pulling out all the stops to cut costs, increase efficiencies and reinvent their businesses around their customers. Managing cost, in fact, has emerged as one of the top priorities for the financial services sector. Given the acute focus on costs, it may be time to appraise the cost efficiency of one of the most strategic assets of the banking sector – technology.
Most banking technology infrastructures in play today are most likely the product of an evolutionary process that can be traced back to the days of product-centric vertically integrated businesses. Along the way, channel proliferation, industry consolidation and ad hoc modernization have resulted in  complex over-engineered systems that struggle to conform to current standards of cost, flexibility or innovation. It is estimated that just simplification of these IT environments can result in a reduction of application and infrastructure costs by up to 50% and total IT costs by as much as 30%.
A first step towards IT simplification would be to eliminate or reduce the number of systems that are duplicating functions across business lines. In most cases, system duplication can be resolved by deploying enterprise-class components that not only reduce operational and management costs but also enhance business agility and innovation capability. These components also breaks down traditional silos to create a unified view that affords better operational control. Consolidating and standardizing operations across subsidiaries, by leveraging multi-entity, multi-country solutions, can also help banks manage costs more efficiently.
The road to new revenue streams and improved profitability has to start with a focus on reducing operating costs and maximizing current revenue opportunities. Decades of ‘bolt on’ systems upgrades have resulted in banking infrastructures that are too clunky, complex and costly to serve today’s business needs. Enterprise-class banking components can help banks rejuvenate their IT systems without having to shake existing infrastructure to its foundations.
Read our previous blog in the “Simplified Banking” series

Simplify to stay agile

From a policy perspective, ‘too big to fail’ warns of the broader economic consequences of failures at large banks. But to banks that are up and running, there’s another phrase that’s raising red flags – ‘too complex to compete’.
For long, the sheer size of large banks has given them the competitive advantage of economy of scale. But according to a recent analyst report, this erstwhile advantage has been completely negated by a proportional increase in complexity that has brought into play a new law of diminishing IT returns.
Banks of every size are well aware of the new normal in banking; characterized by cheerless macroeconomics, constrictive regulations, changing customer expectations, non-conventional competition and significant challenges to profitability. The industry response has been to reconfigure existing models in order to lower costs, enhance efficiencies, strengthen compliance, accelerate innovation and create true customer-centricity.
But IT complexity seems to be the biggest challenge to that reconfiguration effort. Consider these findings from the latest EFMA-Infosys Innovation in Retail Banking study: the average time to market for new offerings at large banks was 11.6 months, compared to 7.8 and 5.8 months for medium and small banks respectively.
Agility will be the touchstone of competitive differentiation in the new normal, but existing technology infrastructure may well lack the flexibility to deliver.
Core transformation of banking infrastructure is no easy task but it has become the strategic imperative, especially for larger banks saddled with stockpiles of disparate technologies accrued over the years.
Recent innovations in the banking solutions industry are opening up an interesting new approach to transformation.  Today banks are finding that they have option of modernizing progressively by replacing one component at a time. This approach saves them both time and money and presents a low-risk transformation option that’s a simple solution to what was once a complex problem. In an industry where the value of agility cannot be overestimated, componentization will surely be a welcome option.
Read our previous blog in the “Simplified Banking” series

Simplicity as sophistication

Banking is an inherently complex industry. But for long the sector has been able to leverage technology to manage business complexity and to drive growth, profitability, customer experience and innovation.
Which is why one particular finding in this year’s EFMA-Infosys Innovation in Retail Banking study creates some serious cognitive dissonance – IT systems apparently are the biggest barrier to innovation across all banks, irrespective of size.
How is that even possible when banks outspend almost every other industry on IT infrastructure?
Complexity. Banks spend almost 85% of their annual IT budgets removing kinks and clots in infrastructure or simply keeping it in running condition, with little left to transform the business or create new revenue streams.
But, transform they must to survive in banking’s brave new paradigm where the serious threat for conventional banks is from technology companies like Google and Apple determined to redefine the way banking products and services are designed, delivered and experienced by customers. A slew of new technologies like Social, Mobility, Analytics and Cloud have also leveled the playing field for other smaller structurally nimble players to challenge established monoliths. Most importantly, consumers are exercising their newfound collective digital voices to demand choice, personalization and value.
Add to all this a still evolving regulatory regime with compliance standards so demanding as to distress even the most versatile banking infrastructures. Regulators want the macro view and the minutiae and they want it now. The stress of regulatory stipulations on capital & liquidity requirements and fee-based income models is already evident on a lot of banking balance sheets.
Global macroeconomic conditions, in the meanwhile, offer little succor to any industry and least of all to banking.
Given that the rules of engagement in banking have been so comprehensively rewritten, nothing short of a complete transformation of IT infrastructure will help conventional banks compete effectively in the Brave New World of banking. And it’s a world where simplicity is the only sophistication required.
Check out our first blog in the “Simplified Banking” series

The cost of complexity

Towards the end of last year, an IT trade body in the UK released a report calling for financial regulators to force banks to overhaul their technology infrastructure. This came on the heels of a massive tech outage at one of the country’s largest banks that locked nearly 12 million customers out of their accounts for almost a week.
Now, the extremely technology-intensive banking sector spends nearly three times more on IT, as a percentage of revenue, than the average of all industries. But still, the report called for ‘infrastructure renewal’.  Why? Not because the infrastructure was dated, but because it was far too complex.
IT infrastructure complexity is not restricted to UK banks; it’s a global phenomenon. To understand how things came to such a pass, one need only look at the evolution of banking over the past few decades.
In simpler times, banking operations were organized around product verticals – deposits, cards, loans etc. – with applications optimized to run end-to-end processes for each. This created unnecessary duplication, but more importantly, these product silos set the stage for complexity to evolve along with the infrastructure. The proliferation of channels, for instance, led to the creation of more complex interfaces for each vertical thereby augmenting the complexity of the entire system. Then a wave of consolidation within the industry brought together disparate systems and processes and the attendant challenges of integration. Along the way, the decentralization of IT, indecisive governance and ad-hoc decisions only exacerbated the complexity.
But all this was executed with good intention – to deliver more to the customer in terms of products, services, channels and so on. And it is probably a similarly executed good intention that has left the bank mentioned earlier with charges of up to £125 million on account of the outage.
Deutsche Bank, on the other hand, which embarked on a EUR1 billion IT renewal program, says simplification and standardization has already paid back EUR200 million in cost savings in 2012.
Complexity costs. Simplification saves.
Read our follow up blog in the “Simplified Banking” series