Month: March 2019

In late 2018, Netflix, as part of its Black Mirror franchise released “Bandersnatch”. Set in the 90s, this movie narrates the story of the protagonist Stefan Butler who goes through an intriguing maze of experiences while coding a video game. There is something very unique about this movie. The viewers are in control of the storyline! At each decision point in Stefan’s life it is the viewer who takes a call (two options crawl up and user has to make a choice). Personally it took me a while to appreciate the novelty of the concept, then I ended up spending quite some time figuring out alternate endings by going back and changing my decisions. Wish life itself offered this level of gamification!

Take Away
So what can be the possible take away from this borderline audacious experiment of a movie?

Note: I wish to make this blog interactive, where you would make choices while reading through and I could narrate as per your taste/preference/ “choice”. As a quintessential product person I will proceed and keep the above interactive-blog idea in my backlog or save it for the next hackathon!).

In the world of products, we often face the dilemma of offering choices to the end user. Offer too many options and it will add to the cognitive friction, make it too little and users star feeling a general lack of autonomy. (a negative bias sets in).

Bandersnatch did offer some clues in offering choices the right way.

The Bandersnatch paradigm

User gets to choose
Users of your product, like the viewers of the movie should always have different options to shape up their journey. Choices should be made evident and there should be abundance of options.

There are different possibilities
There should be different possibilities/stories for the same product. Based on the user’s decision, usage patterns and choices made on the UI, a unique product-user identity should emerge in time. Once this phase arrives, for the sake of the time spent, and the choice made, the user has higher chances of continuing to use the product. This is the “investment” (Recommended reading “Hooked” by Nir Eyal) phase in user’s journey.

Some products provide this differentiation by “Progressive Reduction” where the UI adapts and simplifies itself as per the usage pattern of the end user i.e. positioning of most used features, dropping of labels, etc.

Choices have visible consequences
I remember how the background track in the movie changed the moment I selected the track for Stefan! Similarly, each touch/click/interaction in your UI should have visible, tangible feedback. Not getting a feedback on UI is comparable to not getting a response from a smart speaker despite saying the magic word (and it has happened to most of us).

Choices are limited
The movie provided binary options to the viewer. In real life we can have many options. Limited choices keep the narrative smooth and barrage of options can easily disillusion any user.

However, we can take a conscious call (keep reading… it’s cocktail vs. Lego Block)

Nothing breaks / You can start again
Irrespective of the path taken by the viewer, the movie did not lose the plot. It admittedly reached certain points of no return, however at that instant there always was an option to correct and walk a different path.

It’s ok not to make any choice
The movie showed the options on screen for a limited duration. Failing to make a choice was not a show stopper. The movie proceeded with a “default” narrative. So the default experience does matter. Some of the users would love the default theme in an app and never look beyond it. Therefore, it makes a lot of sense to refine the out-of-the-box experience for any product.

Cocktail Makers and Lego Blocks
While making product decisions we often face the dilemma of extremes. At one end of the spectrum is a simple product with limited options (remember in Bandersnatch we were given only two options for each question). These are the Lego Blocks. Limited options make our life predictable as the system works (behaves!) the way “we” want it to.

Then there are cocktail makers. We package the product with all the ingredients and expect the user to be shrewd enough to arrive at a perfect mix. Perfect! Except for the fact that our user can spoil the cocktail, and blame us too! Imagine several users making quick and disgusting cocktails.

At this point you might just be saying, “let’s get real, above paradigms look great in UX books and blogs.” Let’s have some examples from the real world. So here they are:

Tasker
Offers extreme customization experiences on your android device. You get a sense of “I am the owner of my device”. However, some users have faced consequences like getting into loops and softbricking their devices. Cocktail!

i-OS/ Android
i-OS is a Lego Block fixed by extreme expertise and artistry. Don’t try to move the blocks. Ever.
Android is also a Lego Block out-of-the-box, but it keeps the blocks flexible. Want a cocktail? Root it. It takes you to another world or leaves you with a learning of handling a softbricked device!

IFTTT
You get to choose from a finite list of “if” conditions and resultant “then” occurrences. Infinite possibilities for a creative user. Classic Lego Block.

After Effects and Spark
Both are Adobe products. While After Effects offers extreme customization Spark is about beautiful presets which can be used to create visual experiences. Both are winners! (Which one is the Lego Block?)

An IDE can go with a cocktail while a bank teller app should have a Lego Block. If the target persona is an expert, we should progressively reduce the pre-built blocks. For most users offering a feeling of DIY by the Lego Block approach works to impress them. E.g. giving the bank user an option to create personalized inquiry options. It’s the user who gets to choose.
Just like the interactive movie, users in the digital future will increasingly expect more interactivity and configurability in each product. As the makers of these products, these are our real life Bandersnatch moments. It’s up to us to offer fixed/movable Lego Blocks or offer a cocktail maker based on the user needs.

Wish I had multiple and configurable endings for this blog. Can we create interactive-blogging experiences? Perhaps use a chatbot for it? Let’s work on it. Drop your views in the comment box below.

Where we are currently

The open banking paradigm has been around from quite some time now. Open banking was supposed to have arrived and adopted conveniently and sufficiently by now, but in reality, the uptake is slow. There are multiple reasons for this: from too stringent or too ambiguous regulations to resistance on the part of players involved, especially banks, which are reluctant to share their customers’ data with anyone. This is natural as banks have been the primary custodian of customer data for ages and it is not easy for them to part with it.

Regulations at play

Adoption and full utilization of open banking depends highly on the prevailing regulations and enforcement plan. EU and UK are leading in this space with detailed PSD2 and UK open banking specifications in place. Many countries in the EU have started implementing the standard but there are countries such as the Netherlands where PSD2 guidelines have not been adopted completely due to delay on the part of local legislation, and hence the subsequent delay in implementation.

How it is expected to shape up

Fintechs are more than ready to embrace the open banking phenomenon given their digital agility, but they also need to become a part of the right ecosystems for driving new realities. The overall evolution of ecosystems will highly, if not solely, depend on the approach banks adopt. We look at a few of them below:

Bare minimum compliance

Here the intention of bank will be to meet the basic guidelines laid out by the regulator. Bank will share very basic stuff and nothing substantial that will add incremental value to the ecosystem. Banks are likely to focus on aligning their business model to one of the roles in the banking value chain instead of spreading themselves thin across manufacturing, distribution, and marketplace capabilities.

This approach, though a possibility, will be adopted by very few banks. By now banks have realized that to hold a substantial position in the future of financial services, they, along with basic enablement, need to fully utilize the power of the ecosystem and build on it with their traditional hold on customer data.
Just playing along will not be an option for banks, they need to be the playmakers.

Bouquet of services

One of the possible models could be where banks open their customer data to fintechs and act as an aggregator of all kinds of services to the end customer. The services offered will be a combination of in-house services as well as specialized offerings by third parties. In this case, banks will hold the customer relationship but will fulfill the demands through partner offerings. The third party can even be another bank whose data the home bank accesses to provide value added services through own or other partner applications. Overall, the partner services will be built on top of the bank’s core services so there is a lot in it for banks.

This is expected to be the most widely adopted approach in the near to mid-term.

Bank as a platform

In this model, banks will act as a platform that will have producers and consumers. The producers will be the fintechs and other service providers that will use bank’s open banking APIs to provide value-added services to end consumers. In this case the bank may or may not hold the relationship with the end customer. The end customer might download the third party app which is powered by bank’s core services.

For any platform to be successful, there are a couple of important points that need to be catered to: the right mix of players and quality of value created on platform. Banks have the traditional customer base so one part of the mix is there. Platform banks should work towards attracting high quality producers who can augment and enhance the value of bank’s offerings rather than just providing their own version of same old services. Hackathons would be a good starting point in this regard.

In terms of quality of services, the platform must monitor the producers stringently and incorporate ranking systems like we have in well-known platforms such as Android and iOS. They should set QoS standards and prevent producers that do not meet the QoS from participating in their platforms.

The value for banks in this model lies in the power of the network effect. Once there is critical mass of high quality producers on the platform, new customers gravitate towards it. Ultimately everything is served through the bank’s core services so it is a win-win situation where the bank’s platform consummates matches, producers expand their reach, both the parties earn revenue, and customers benefit from greater choice.

True Open banking

This model goes one step further than the platform bank and adds the possibility of offloading few of the banks’ development tasks to selected partners through open APIs. UI development is a prime candidate for this. It is said that a UI becomes outdated in less than 12 months. While banks can focus on enhancing the core offerings, tasks such as UI development can be taken up by firms specializing in the domain.

API standardization

The evolution of open banking greatly depends on API standardization. The regulation has fully detailed API specifications in the UK, but in other regions there is still a need to arrive at a common agreed standard. To this end, collaborative ecosystems would be of great help. One such ecosystem is the Banking Industry Architecture Network (BIAN) which is dedicated to speeding up innovation in the industry.

Monetization

There are many proposed models which are being tried currently for monetization of Open APIs. While this is a separate topic in its own right, few of the models being considered are subscription based, usage based or freemium models where basic services are free and advanced services are charged. With many regions going live, we will be getting a good idea of some widely adopted and accepted models.

To sum up

As with any new paradigm, open banking unlocks endless possibilities. But the adoption and full utilization depends on multiple factors including regulations, willingness of players and optimum business models. In the near term, it seems that, banks will move towards full compliance and start offering third party services through open APIs. Based on customer feedback and market evolution, banks are expected to slowly move towards the platform model. But whatever approach banks choose, the focus should be on creating and enhancing value for customers through their services. Monetizing these services, although central to any business model, is secondary.

Open banking and platform model

Open banking is going to be the next biggest wave in the financial services industry. It will be as instrumental in creating exceptional customer experiences and accelerating business growth as AI or embedded analytics. As per the 2018 Infosys Finacle Efma Innovation in Retail Banking survey, 65 per cent of respondents feel that over the next one year, open banking APIs will have the greatest impact on innovation in retail banking.

The importance of open banking lies in the fact that it has the potential to change the face of banking as we know it today. It paves the way for banks to move from pipeline to platform model. According to Marshall Van Alstyne, a pioneer in the field of platform models and author of the book Platform Revolution, whenever an industry has moved from pipeline to platform business model, it has witnessed unprecedented growth. We are about to witness this inflection point in financial services industry.

The platform business model

As opposed to pipeline model where the value is created by producers and consumed by consumers, the platform model enables the users of the platform (producers and consumers) to create as well as consume value. The platform model works on the basis of two-sided network effects and relies on both producers and consumers to enhance value of the platform.

How to build a platform bank

There are a few key points that need to be taken care of while building an extensible platform bank. Many points are common for any platform business but there are a few specific to banking too.

Platform strategy

The single most important decision banks have to make is whether they should create a proprietary platform or become a part of a broader platform sponsored / created by multiple parties including but not limited to other banks, fintechs and industry consortia. A large bank with elephantine market share may try to go the Apple way and create a stand-alone platform, but given that the area is still emerging and there are no proven strategies, it’s wiser to get into some form of collaborative platform. Besides reducing the risk, it also serves to meet a wider standard and hence be more attractive for developers on the platform.

Platform regulation

A platform creates value by enabling exchanges between the users of the platform. To this end, there must be a proper governance model in place to regulate such exchanges. We have many well defined regional regulations to govern open banking. These regulations can act as a good starting point for platform governance. They regulate the basic data exchanges and focus on protecting customer data. Banks should follow these guidelines to build their platform business.

API strategy

There are two aspects to this – external and internal. Externally, the focus should be towards standardization of API. If the platform is part of a bigger consortium, then it is easier to have API standardization. Furthermore, external ecosystem players such as Banking Industry Architecture Network (BIAN) can be brought on board to ensure compatibility.

The internal part deals with getting a bank’s data ready for APIs. Just creating a wrapper over existing APIs doesn’t serve the bigger purpose of Open APIs. Banks need to optimize their processes to make them ready for open APIs.

Banks should also create a developer portal and sandbox in the early stages to ensure building and growing developer communities that create substantial value.

Choosing the right technology and development approach

To build something as complex as a banking platform, the underlying technology stack should be highly capable. The infrastructure should be flexible to provide compatibility with the advanced services that are available. Various options such as microservices should be considered before zeroing in on a technology stack.

The development approach should provide banks a quick turnaround. Banks should be highly agile and must churn out PoCs of the platform features quickly. The platform should adapt to the market feedback and that too very quickly.

Solving the producer vs. consumer value-puzzle

As with any platform business, banks must find a way to address this issue. Producers gravitate to any platform if it has a high number of consumers. Consumers join a platform only if there is value generated by producers. Generally, in such cases, one of the two parties have to be subsidized to use the platform. In case of banks, one part of the mix is already present in the form of traditional customers. This should be reason enough for developers to join the platform. Still to get a critical mass, banks can deploy various strategies. Investing in select fintechs can be one option. Other options include appathons to generate ideas. Banks can build their own apps as well to demonstrate the power of the platform.

Monetizing the platform

This ideally is the last step once all the other aspects have been taken care of. There is no prescribed playbook for pricing of APIs. But banks must ensure that their API strategy and API monetization strategy are in line with their business and platform strategy. The pricing can be different for different users: partner, fintech or other ecosystem player. Again all usual models apply, be it usage based (pay per API call), subscription based, revenue share based or may even be as a one-time fee. Banks may need to experiment with a few pricing strategies before they finalize the one that best meets their goals and strategic intent.

Closing thought

Building a platform bank nee
ds meticulous attention to detail in all aspects, right from the platform strategy, technology architecture, API strategy and ultimately monetization strategy. Although failing in any of the aspects does not spell doom, it is imperative to fail fast. With evolving API standards and innovation in banking technology stacks, it may be some time before a standard working normal may is established. As is the case with any industry, getting the basics right and keeping pace with change and direction of change in the industry is foundational to building a successful platform bank.

Introduction

User journey and customer journey are the buzzwords in the IT industry, given the need for redesigning applications for a better user/customer experience. When it comes to selecting or prioritizing software applications for redesigning, from amongst multiple applications that provide similar critical business functionalities, user experience is often the deciding parameter. Most organizations are trying to redesign user experience and end-customer experience of their existing IT applications. In the last two decades, many financial institutions have also revamped and reinvented their existing software applications to meet enhanced business processes, but sadly, little attention is given to improve customer or user experience. The software industry was weighed in more on delivering functional competence than on executing design principles.

Functionality vs. experience

Functionality of applications was the key priority in the early days of this century. However, focus gradually shifted to the user ‘experience’ of applications and how they aid automation and digitization. As part of the development of user interface, now more emphasis is laid on the number of clicks required, minimal and relevant fields exposure to the user, inbuilt analytics etc.

After the onset of mobile revolution across the globe, the applications which were initially developed to work on computers/web browsers required redesigning to make them compatible with and capable of running on multiple mobile devices. The ease-of-access and wide usage of mobile devices necessitated innovations in mobile applications. A plethora of mobile applications started popping up to meet almost all the daily needs of consumers, be it ordering food/grocery, making bill payments, booking movie tickets and so on. These user-friendly applications set the expectations of the end consumers even for the enterprise and complex banking services applications.

Some software institutions started building front-end applications to improve customer/user experience. These can be interfaced with a business application to provide better UI. While they saw initial success, limitations were soon visible either in design or in the change process.

Need for design expertise

Many IT companies have started hiring design experts to meet the emerging needs of the industry. While it is easy to design smaller consumer applications with limited use cases, it is more challenging to design larger and complex enterprise applications.

In a banking software, there are many areas which need to be considered for ensuring better user and customer experience. Some of them are:

Collaboration of domain and design skills

A design expert’s expertise is screen design, but business process and software code development are not his/her prowess. It requires a collaborative effort involving design expert, business user, software developer, technology architect to develop a comprehensive software with desirable customer experience.

Smaller applications are more flexible and successful as the designer, programmer and subject matter expert is a single person in the initial stage of development. This may not work well for enterprise applications. Redesigning and reimagining existing screens for multiple business use cases for an enterprise application requires knowledge of the domain, the business life cycle and the underlying software programme. Here, the architects, programmers, business analysts and designers are different so that they can focus on specific functions. Although if the designer has knowledge of other functions, it is an added advantage.

Concepts for an ideal design

Redesigning a screen is not just optimal alignment of fields, but it should have a logical workflow and navigation to serve business functionalities. When business requirements are complex, designing of screens might take more time than writing the line of code. It is preferable to design new screens rather than reworking on the existing screens.

Furthermore, different screens may appeal to different customer segments. The choice depends on the processes/practices followed in different geographies and banking functions. Prototyping design to suit a specific market or process may not be ideal but a design which delights a larger audience has higher chances of success. Many software companies are decoupling the business functionality from the user interface layer.

Conclusion

User interface or customer experience is a journey that evolves and matures with the evolution of the software. It is rather difficult to achieve 100% design-perfect software with all business needs and workflows embedded, and which also lends itself to digitization and automation. It is ideal to develop a technology software in the cloud which can be used to build a user interface/experience layer on top of any business application or any IT platforms. A business user should be able to download it and build the UI with simple configuration. An AI tool to test the UI layer based on multiple parameters can help achieve uniformity. Embedded analytics/AI built within a software can suggest alternative designs at the software development stage.

Banking – The conventional way

In traditional banking, bank accounts are opened by the end customers/consumers to conduct critical and common banking transactions – payments and transfers, loan disbursements and repayments, forex transactions, investment and private banking etc. Sometimes one single operative account and multiple sub accounts are opened by the customer and there is a possibility of opening multiple operative accounts for different purposes. Customers also open accounts in different banks for varied needs. This is increasingly visible across the middle class/urban/privileged or high net-worth customers (HNI) in India. Currently the process is to enable these accounts with online (internet) banking, mobile banking, and ATM for customers to access and perform transactions anytime anywhere with security and password control.

Different banks provide products and services in different lines of business and differentiate them from competitors’ products with interest rates, charges etc. They charge the customer for a few services and pay/collect interest for investments/lending as required. The balance ultimately reflects on the Profit and Loss statement of the bank. There are standard message protocols /APIs built within these products and services which are exposed based on security/rules and regulations of the home country which can be consumed/published by software vendors/banks/Fintechs as needed.

Open Banking/APIs and Bill Junction

With the technology advancement of mobile and with data provisions through different technologies like GSM, 3G, 4G, 5G, the customer/authorities can access critical data with controls and consent as required – few countries have provided online integration mechanism with passport, national identity / security number, or driving license authorities to store, update and retrieve information using APIs. With the concept of open banking and open APIs, most of the banks and software providers are opening up the core and surrounding solutions allowing their APIs to be consumed by the external world with strict consent/access and control.

Multiple countries have started the process of introducing bill junction/desk, payment junction/gateways so that any type of payments can be routed through these interfaces. However, these are mostly one-time or a weekly/monthly recurring activity and can be easily templatized. For this, one needs to register with a bill junction with provision for ad hoc payments and mechanism for settlement.

Product/Services gateway junction

A junction/gateway for accessing and availing different products and services of multiple banks/financial service/fintechs by customers based on selections is also an option. Gateway junctions can also enable customers to close and complete the transaction in a few clicks. Considering the micro-services architecture design with collection of services, it is only a matter of time before one will be able to pick the services and use it as required. With security controls, accessibility of data, opening and completing transactions through mobile applications or devices and choosing the best services out of the listed options can be considered. Without restricting to a single bank/FI, one should be in a position to avail the best services /offers and it should be seamless. The customer is not restricted to one institution and should be provided ample choice and the best of offers from multiple banks/FI.

Banking transactions without a bank account/Bank

Options need to be explored for fulfillment and settlement of banking transactions without maintaining a single account/multiple bank accounts. Without a bank account, one needs to create alternate storage of funds with a unique identity for the customer. This could help in settlement of transactions as per need. It would be a deviation from the fundamental concept of banking/financial ecosystem wherein banks have till date survived on the basis of the traditional lending and financing interest-based business. However, banks need to innovate and explore new revenue opportunities continuously given the changing regulations and increasing customer needs.

A concept of transparent processing, access, storage and movement of customer documents is Block chain. Block chain has also conceptualized distributed ledger instead of single ledger concept. However, settlement for block chain transactions still requires customers to have a bank account.

The road ahead

To conclude, with the concept of open Banking, API availability, micro services, digital transactions and transaction overdose, it should be possible for the customer to do banking transactions with/without a bank account. This can bring in models / avenues for storage of customer data and account balances and this role can be played by an intermediary appointed by the Government with strict supervisions and monitoring. Though such a concept will limit the scope of the banking system, it will also open up more opportunities for the system to explore new models. The allocation of excess funds can be assigned to qualified fund manager/robot who can use AI and analytics to deploy funds across the globe in financial instruments which can provide better returns, liquidity and can be used for settlement of transactions. From the customer’s perspective, banking services and products will move more towards commodity business with the concept of use, pay, settle and balance excess funds with investments in lucrative financial instruments worldwide. After software-as-a-service, platform-as-a-service, this will be the rise of true banking-as-a-service.

Digital Empathy for the Color Blind

“Blue is the richest color for me” Mark Zuckerberg told The New Yorker.

“I can see all of blue.”

According to The New Yorker, Zuckerberg is red-green colorblind. The color he sees best is blue.

What does this mean?

Zuckerberg can see things as clearly as other people; however, he is unable to fully see red or green light.

We now know why blue happens to be the color that dominates the Facebook website and mobile app!!!

What is color blindness? Does it impact one’s ability to perceive colors?

I got curious to understand it further.

Color blindness or Color vision deficiency is the reduced ability of human eye to distinguish between shades of certain colors, mostly red or green or sometimes blue and yellow.

The below is an image of kite perceived in normal vision vs. color blind vision.

One can observe that the visual palette for a color blind does not perceive red and green as distinct colors.

This poses challenges in multiple spheres of daily life where indications are based on colors, for example traffic lights, reading maps, buying clothes.… the list is long!

Imagine how Facebook would appear to its CEO if it was red or green!

I googled to understand more.

Google! Does it ring a bell?

Google logo is heavy on colors!

My instant thought was how a color blind would perceive this logo. And here it is…

Google logo perceived by a person with normal vision.

Google logo perceived in case of less sensitivity to Red
(Protanopia)

Google logo perceived in case of less sensitivity to Green
(Deuteranopia)

Google logo perceived in case of less sensitivity to Blue
(Tritanopia)
(Image source)

That is the Google logo perceived by color blind eye based on the degree of sensitivity to colors!

Statistics reveal that color blindness affects 8% of males and 0.5% of females globally.

This means that about 8 out of every 100 visitors to a website or an app may not be viewing or experiencing the information and color-based indications as they are meant to be.

Being a banker by profession, I pondered on the many color blind customers who access the digital channels or apps for performing the banking transactions.

My reading led me to understand that banks can adopt holistic and inclusive design practices that are color-blind-friendly and provide a common user experience.

Given below are few good design practices (not exhaustive) gleaned from my reading and experience.

Supplement colors with symbols and text

The image below provides dashboard view of the total expenses incurred by a customer for a period based on transactions in the bank account.

The bank has provided symbols and descriptive text against every colored legend. The customer can hover on any particular color in the chart to understand the category with value. Additionally, textures and patterns in graphs would be even better!

Use text along with colors for alert messaging

The image depicted on the left is for applying for saving account using mobile banking app. Here green line indicates a successful entry and red calls for the attention of the customer to input data.

A color blind customer may not recognize the color of lines; however, the supporting text signals an alert for input of required data.

Avoid problematic color combinations

Certain color combinations such as red and green, green and brown, green and grey, are a nightmare to the color blind. Avoid using these combinations while designing websites as it gets hard to interpret the information.

Use color blind simulators

There are color blind simulators (e.g. Color Oracle) using which designers can perceive how a color blind will experience the design.

Integrate with bot

Banks can integrate their digital platform with voice assisted bots or chatbots that guide and help accomplish tasks or fetch information with natural language.

Design for accessibility

The Web Content Accessibility Guidelines 2.0. laid out by the World Wide Web consortium lists the guidelines for users to access and use web content equally.
A few banking websites such as Bank of America (Source), HSBC private banking (Source), J P Morgan (Source), also have a webpage dedicated to accessibility.

My final thoughts

There has been a rising influence of digital in banking and financial services.

The global mobile banking report published by KPMG with UBS evidence lab, reveals the number of mobile banking users globally is forecast to double to 1.8 billion over the next four years.

One can deduce the proportion of color blind customers accessing banking channels in this overall number based on global statistics.

It is imperative that design teams at banks are cognizant of the challenges faced by color blind people. Every customer counts. A frustrating experience can lead to lost conversion and sale.

So what if there are problematic color combinations that need to be excluded?

There are a lot more colors on the palette that can drive creativity yet foster accessibility!!

References:

Banks can devise various policies and strategies for customer experience, but at the end of the day, it boils down to only one basic thing – Are these strategies and steps really resulting in the improvement of customer experience?

In this blog post we look at a few important elements of customer experience enhancement for real tangible results.

Reimagining customer journeys for the digital world

With the world going gung-ho about digital experience, what exactly does a customer look out for when he/she signs up with a bank which claims to offer distinguished experience as a result of customer journey reimagination efforts of the bank? The ease with which a customer is able to fulfil his/her banking requirements so that his/her business and day-to-day activities are not affected makes a difference. Ideally, the customer’s time shouldn’t be spent doing banking transactions. To that end, nearly all leading and progressive banks are reimagining journeys to offer contextual services, products and advice across existing channels such as mobile, new channels such as voice assistants and channels yet-to-emerge such as intelligent devices.

Immersive experiences with digital technologies

The banking requirements of a small business owner differ from that of a trade finance customer or that of a salaried person. Different customers have different requirements. Banks catering to various segments with personalized digital experience definitely can be pioneers in the field of digital technologies. For example, an employer would want to upload and distribute salaries on the last day of the month at his time and convenience without any dependency on this bank. Similarly, an exporter/importer needs to perform his trade-transactions timely in a safe, secure and cost-effective way. Now exporters and importers can employ blockchain technology which is the safest and the most secure technology on the block, without any intervention from a bank. A retail customer would want to get a loan sanctioned with minimum paper work and approvals and with the click of a button.
The customer may not be a subject matter expert. But the customer needs to be provided the most convenient ways to perform everyday transactions using the most user-friendly interfaces and technologies. Also, one needs to understand that a baker’s dozen holds prominence even today.

Essentials of a successful customer journey program

Every customer journey needs to embody the following principal points – simple Interface capability, effective implementation timelines, inbuilt validations to mitigate risk, cost effective solutions, easy-to-use banking experiences, and an exciting loyalty program. These are some of the essentials of a successful customer journey program.

KPIs for customer experience in the digital world

KPIs are used by key bank personnel to gauge the overall performance of the employees or the products. KPIs and metrics for the level of customer satisfaction/attrition can provide banks a clear picture of the results of the customer experience initiatives and effort, allowing them to align, adjust or course-correct their policies and strategies.

Redesigning customer journeys in corporate banking

Corporate customers generally hesitate to switch banking relationships. A bank who can simplify a corporate customer’s journey is sure to find a loyal customer for a life time.  Banks should provide their customers secured channels and platforms to carry on business transactions. Easy-to-use upload formats for bulk uploads are a must-have feature for a decent digital experience.

All said and done, it is also imperative that digital experiences complement the traditional human touch in banking. A bank may employ a chat bot or any other kind of virtual assistance for quick real-time banking, but bankers who can empathize with a customer and his/her goals and priorities are equally important. At the end of the day, only when the end customer’s journey and consequently the overall experience is simplified and contextualized, does the bank really leave a mark behind.

Introduction

Artificial intelligence (AI) as the name implies, is a technology-driven attempt to make machines think and act like humans. The advances in various streams of computing and technology are increasingly making it feasible to implement AI in almost all walks of life. So, imagine a future where machines “think”, “speak”, “learn”, “memorize”, “move” and “do” everything the way we humans do? That is what Artificial Intelligence (AI) seeks to achieve. The core of AI is essentially typifying and codifying the human brain for its ability to gather, process, and store complex patterns of sensory data (audio, visual, tactile, smell etc.), and then make intelligent and rational decisions out of seemingly conflicting data.

The powerful and unique brain powers conferred survival benefits to human ancestors and helped them evolve into complex but harmonious human societies. Now with humans trying to mimic themselves completely with machines in these times, evolution seems to have turned a full corner. We can put such machines to many creative uses – acts which humans don’t dare to do or are prone to make mistakes while doing. For example, accessing hazardous substances in a nuclear plant or reaching out to dangerous places on rescue missions, or assisting doctors perform precision surgeries and so on.

AI in Banking

When machines can perform human tasks more powerfully, faultlessly and routinely than humans, we have a case made for replacing humans with those machines for automation. While many tasks have been automated from the time technology entered our realms, AI-inspired automation is a completely different beast altogether. When it comes to banking, there is no doubt that AI-based automation will revolutionize, disrupt and likely turn banking on its head.

To look at the possibilities of AI and automation in banking could mean looking at what is likely to be still done with human intervention. The AI chatbot of present times can metamorphose into robots which will perform all the routine yet complex banking transactions with utmost sincerity and alacrity, all the while keeping the visiting customer engaged with the most courteous behavior. The robot can be armed with complete social, biological, scholastic and career profiles of the customer along with the ability to gauge the customer mood using body sensing means, so that it can optimize and offer the most pleasing and plausible experience every time.

The future of Banking with AI

Experts say that, AI will likely replace half the human jobs in financial services industry, in a decade. The prospects for job losses look intimidating and stark but that is beside the point. With the need for human intervention drastically reducing from the front desk to back desk to management, it remains to be seen what kind of bank we will come to experience in say 50 years from now. Maybe there will be owners of banks, their slew of automated robots doing the bank operations and a few humans for some essential work. This opens up the possibility for banks to be owned by anyone who has the capacity to buy the most powerful robots to run the bank which gives best-in-class experience to customers. Since robots lend themselves to easy changeability in software, regulations, processes and all the required changes are continually fed to the robots, they can undergo seamless and real-time updates.

The Differentiator

It is very difficult to speculate what will differentiate one bank from another when automation takes over completely. Since AI enables self-learning, all robots will learn and perform most tasks efficiently and quickly. The sophistication of the algorithms in learning new patterns, and the speed with which these machines pick new knowledge could perhaps determine the differentiating factors. That may also even out in due course.

It is clear that as robots become more and more sophisticated the difference between a human and a robot will blur. In the banking context, transactions that call for ‘human touch’ are still governed by the transitory moods and personalities of the individuals concerned. This is a basic limitation of human-based transactions that can never be overcome. With robots and full-blown chat bots and robots which are continuously learning from experiences and are armed with each customer’s emotions, body language and background detail, digital technologies can deliver experiences similar to those delivered by humans, sans the transitory moods. In a way, banking as we know and practice today, might come to an end and will be replaced and dominated by 100% effective and efficient humanoids who will offer more than a human touch.

Conclusion

The meaning of human existence will need to factor robots that will replace them in almost all walks of human endeavors. In essence human existence will likely become one of greatest redundancies even if one assumes that humans will find answers to the problem of meeting the livelihood needs. For banks, one can foresee a large number of automated AI-based robots working feverishly and meticulously, serving its customers located all over the globe equally well. It will be a totally different economy altogether, an AI driven economy at that.

Analytics is one of the most transformational technologies today, which finds application in multiple industries like FMCG, hospitality and services, manufacturing, financial and banking, retail etc. There has been a rapid transformation in the way the technology works. Analytics is embedded in most of the technologies, and provides competitive analysis of business performance. Technology-driven analytics such as AI, automation, robotics with analytics, are proving to be increasingly disruptive.

Gartner predicts that natural language generation and AI capabilities will be standard fare in 90 percent of modern analytics platforms by 2020, and that at least half the analytic queries will be generated or automated using those technologies in the same time frame.

Machine learning with analytics is embedded in digital banking like internet banking and mobile banking, where there a large number of customer interactions take place. With machine learning and natural language processing, customers can search in their natural language or interact with chat bots to address their queries. In the process, the analytics engine embedded in the application is used to analyze and understand the customers’ behavioral patterns, their preferences etc. in order to provide the right products. Big data is used for predictive and prescriptive analysis to understand the customers or help to make important decisions and strategies based on the outcome.

Banks widely use analytics for various processes including loan application processing to gather customer data and present it to the credit officer to make the right decisions, predict the longevity of the customers’ relationship with the bank, understand the products relevant to the customers, and understand which customer type or line of business to target in order to maximize revenues.

Banks using analytics can provide an array of customized products and personalized services to their customers. A reality check needs to be in place to understand if this brings value to the customers. Analytics used by banks – is it a boon or a bane for the end customer? Advertisements for deposits, credit cards, and loans bombard customers on every digital channel, in the process customers may end up choosing a product or service not required by them.

In order to gather customer feedback, market research techniques which involves surveys are used. In-app feedback on digital channels enables personalized feedback from the customers and helps to offer customer-focused products and services. Analytics is used to analyze customer feedback and provide relevant advertisements to them. Analytics should also be used to determine the products / services which are least interesting to the customers and remove them from their immediate view. Say for example, if a customer does not click an ad related to credit cards then a bank can refrain from presenting to the customer again for a stipulated time period. Instead, the bank can show ads or information about the products / services which are relevant based on the customer’s day to day transactions. In case a customer has huge balance in the savings account, ads related to term deposit products can be posted to the customer to help them maximize their return. Providing different and competitive products with attractive interest rates and terms is not sufficient, banks need to provide products relevant to the customer for higher customer retention.

While most products and technologies come with embedded analytics, it is the need of the hour to invest in dedicated infrastructure for analytics in order to reap higher benefits. A survey conducted by Bank of America in 2016 shows that 62% of Americans cite digital as their primary method of banking. Thus it is clear that more and more customers are opting for digital banking and investment in digital technologies is indeed a competitive advantage.

References –

The opportunity to re-write history or create history comes very rarely and creating a smart city is one such great opportunity for digitalization.

Smart cities are a global phenomenon and they present an unprecedented opportunity to apply most aspects of smart technologies for the larger good of the society.

The concept of a smart city stems from similar objectives across the world, the stakeholders remain the same too more or less, and the mode of execution is mostly the same as well. However, they will be quite unique to the region they are built in, since they will be built for personalization and convenience of their citizens. An elementary translation of this aspect to technology can be the aspect of micro services – we mostly know why we need micro services, what should be its construct, and we often talk about standardization of services. Each micro service serves a specific purpose.

Smart cities have a templatized construct of a large scale digital platform and we can do a quick mapping of business requirements of a smart city to digital technologies essential for building a real smart city.

Smart cities get the tag of “smart” not once they are ready, but from the very moment their design and conceptualization begins, which involves laying smart infrastructure that is eco-friendly and high-speed data-enabled connected infrastructure through IoT which lends itself to big data analytics to be consumed by government, service providers and of course residents of the smart city.

The basic infrastructure also thrives on smart mobility options which are applied not as an afterthought, and this aspect truly transforms a city into a smart city. Smart mobility encompasses smart, connected and frictionless payment experience to users.

Digital identity plays a pivotal role in creating an experience that harnesses the true potential of a smart city and lends itself for multiple use-cases including that of blockchain-led contracting, to efficiently execute government schemes to elevate socio-economic aspects. It reduces paper work and provides greater convenience with enhanced safety to the city’s residents.

Smart governance will not remain a buzz word but will be a reality through the above mentioned-aspects of smart infrastructure, smart mobility, and digital identity supported by big data analytics, IoT, Blockchain with a natural extension for all of this through AI (artificial intelligence).

Now, where all of this gets even more interesting for banks is in terms of the role they can play.

Banks can come in at three distinct levels:

But the key aspect here is, it is not sufficient for a bank to be “smart” here. It has to go two steps further and get “smarter”, because the success lies in how well banks can adopt and apply themselves.

Here are a few ways for banks to get smarter and not just stay smart:

With banking software platform providers, banks can co-create along with an ecosystem of hardware service providers. Finacle Digital Engagement Hub is one such solution that gives enough ammunition to banks to get smarter for a smart city!