A recent survey1 shows a decline in banking customers reporting positive opinion of their banking experiences, yet many banks are adding new services and offerings. The reason is that 21st century consumers are experiencing new and better service through other retail channels, and are expecting the same service and capabilities from their banks. They are now increasingly digitally enabled, information hungry, mobile and constantly online. This makes for very demanding consumers, who are likely connected through social media to vast networks of other consumers. A good experience reported can have far reaching positive impacts and the opposite is true for negative experiences.
As CTO for TIBCO Asia, I have the opportunity to meet with many banks and financial services organisations throughout Asia. Many dismiss the situation described above, saying that Asia has a large percentage of unbanked population, that digital and mobile networks are having lower penetration and bandwidth and that their customer base is just not demanding a 21st century digital experience. They say that their customers are loyal and will not switch to other providers. Also, by chasing the large Asian unbanked population, banks have the perception that these types of features will not factor into those consumers’ selection of which bank will be their first.
I dispute that position. It is dangerous and could lead to Asian banks losing significant amounts of customers or opportunities to gain new customers. Governments in the region have recognised the contribution that fast networks have on developing their economies and have ambitious plans to significantly improve their network speeds and coverage.
A report on global mobile trends2 predicts that Asia will add an additional 750 million mobile subscribers by 2020, and that the number of smart phones will more than double. With this rapid advancement and adoption rate, consumer demand for digital banking services will increase significantly and the financial institutions with the best offering stand to win the major share of this market.
Modern consumers expect financial products to be delivered via channels that are tailored to their lifestyle. These consumers expect that their financial products, accounts, business and household views are tied together seamlessly.
The role of the financial institution in consumers’ lives is also changing. The modern consumer is always online and connected and they expect to interact with their financial services in a similar manner. Gone are the days when consumers only interacted with their bank once a week or less. Now, consumers expect to have the ability to get electronic notices from their bank for every transaction and also to have the ability to customise their individual thresholds and channels for that communication.
They expect to be able to perform all possible types of transactions from their mobile device, from making payments and depositing checks to scheduling movements of funds between accounts. Modern consumers expect financial products to be delivered via channels that are tailored to their lifestyle. These consumers expect that their financial products, accounts, business and household views are tied together seamlessly using easy-to-navigate features.
Providing these types of capabilities seems like a huge mountain to climb for many financial services organisations. There are many challenges, whether they are entrenched in a legacy of systems or a new start-up with new infrastructure to put in place. There are multiple back-office applications that provide the core functionality that must be integrated. The back-office applications often do not have the right processing models and may be tied to application specific channels or user interfaces.
The channels and end-user devices that must be supported are much more diverse and dynamic than the traditional branch office banking terminal. Indeed, the evolution of end-user devices promises to continue to rapidly evolve. Whatever is put into place must be future proof so that new display and device technology can be incorporated with minimal effort. The rate of change of end-user applications continues to accelerate, given rise to the perspective that apps are disposable, and that apps will be replaced on a frequent basis.
A key ingredient for providing the 21st century financial services and customer experience is a robust and flexible integration platform. It provides the foundation thatties together all of the core back office applications and also the communications to the diverse channels and end user devices. This platform must be more than just integration, it must:
- Mediate between diverse data models and processing capabilities provided by the core banking systems.
- Orchestrate human and electronic processes, manage and govern data quality and provide B2B and open APIs for partner ecosystems.
- Provide big data and visual analytics capabilities so that the business users can rapidly analyse, understand and respond to the changing business environment.
The 21st century banking platform must shift from a focus on transactions where data is stored for analysis at later times to a fast data architecture where all information is available, processed, analysed and responded to in real time.