Even though some of the most talked about technologies could seriously disrupt the industry, many of them are not yet realities. While understanding future developments is important, we shouldn’t overlook the existing technology concerns in Financial Services. Ultimately, attracting customers is the main priority, and technology is central to achieving this.
So, what will the industry really be putting time, effort and money into for 2017? Here are some of my thoughts:
1. A better customer experience
With the increase in mobile usage, the need to deliver an exceptional customer experience has become more important than ever. In fact, in November 2016, more websites were loaded on mobile than desktop for the first time ever[i]. As a result, a ‘revolution’ in mobile banking usage is under way in the UK. The British Bankers’ Association (BBA) estimates that by 2017 more than one billion mobile phone users will have used their device for banking purposes[ii]. By 2020, customers will use their mobile devices to manage their current account 2.3 billion times, more than internet, branch and telephone banking put together.
Companies need to improve customer experience by investing in advances in technology and building more tailored services and products. An important factor in delivering this is using existing and new data sources, such as social media, to gain customer insights. This will enable providers to deliver more personalised and targeted communications, predict customers’ behaviours, and in essence build data-driven and customer-centric models. Technologies such as Artificial Intelligence, Internet of Things, big data and analytics technology have a particularly important role in providing a better customer experience.
2. More integrated systems
Regulation is gradually driving the industry towards a more open set of business practices, which will accelerate the adoption of Open Banking. Financial Services institutions need to both offer their services and data to be consumed by external parties, and also think more creatively about how to use third-party services and data to support their own offerings.
This would be facilitated by API-centric architectures, application and data integration and better data management. A banking system that has a more agile integration layer will support a more streamlined and adaptable customer experience across multiple products, services and channels.
3. A greater move to cloud
Many operations management systems in place are still based on mainframe or rely on locally hosted infrastructure. These legacy models are being replaced but remain outdated, expensive to maintain, difficult to integrate and query. In the last decade, there has been an industry-wide shift towards web applications and virtualisation opening the door for cloud offerings.
Cloud, combined with Data and Integration strategies, is part of the overall Operation strategy that aims to render better services and products, with improved governance and analytics capabilities. Cloud offers a scalable, manageable technology model that reduces overheads such as IT hardware, maintenance and development. This in turn gives banks more agility to embrace new markets, products and services, according to the consumer needs.
4. More focused data strategies
Risk and Operation Management are often the drivers for the initiation of data programmes, in addition to cost, quality and regulation. As Financial Services are now able to analyse structured and unstructured data, analytics and big data must sit within a broader data strategy.
Data can help increase both customer acquisition and retention, making products more focused to their needs and desires. Additionally, organisations can make better decisions for their business, from evaluating credit risk to detecting fraud.
Automation is advancing in leaps and bounds, meaning routine tasks and rule-based processes can now be completed with technology. Emerging robotic automation platforms are using artificial intelligence and are increasingly mature, scalable and reliable. These solutions are changing the shape of Financial Services industry. Process automation, for example, works 24/7, is more scalable to account for peaks and takes the strain in back and front office solutions allowing people to focus on relationships and good customer experience with real people.
Ultimately, moving to automated processes and solutions, such as robotics, will deliver savings and an improved customer experience. Together with integration and cloud strategies it will allow the business to shift to more agile modern technology base and facilitate a faster pace of change in the customer experience layer to keep ahead of their competitors.
2017 looks set to be an interesting year as organisations focus on their technology strategy to ensure it supports their business model to the fullest.
First published in Bobs Guide 20th January 2017