Pairing up with fintechs can provide quite a few benefits to #banks, as long as they pick the right partners. Banks have been spending more and more on deals just to make sure they don’t get left by the wayside–JPMorgan Chase, for instance, spent $ 600 million on #fintech alone in 2016, according to the bank’s […]
Bank Innovation
Fintechs are becoming more entrenched into the financial ecosystem, with the majority of #banks now firmly on the side of collaboration, rather than conflict. More than 80% of financial incumbents anticipate developing more #partnerships with fintechs in the next five years, according to PwC’s 2017 Global #Fintech Report. However, working with fintechs is nothing like […]
Bank Innovation
Getting customers on track for #financial health is a top priority for most #banks. But while major FIs have the resources and tools in place for helping customers manage and monitor credit, smaller players often lack that crucial infrastructure. In comes #Wallaby Financial. The company, acquired by Bankrate in 2014, rolled out its FI-facing app […]
Bank Innovation
Both branch banking and #department #stores require some re-invention, reduction in numbers or smaller footprints to survive in the face of online competition.
Tom Groenfeldt – Financial Technology
Long ago, houses in northern China were constructed with windows made of thin, semi-transparent paper. To protect their belongings, the residents had to be good meteorologists to ensure that they pasted up the paper windows in advance of bad weather. Waiting until the rains arrived was too #late to act.
Storm clouds are gathering over the #banking industry in the form of a fragmenting value chain, rapid migration to digital channels, encroaching financial #technology firms, and open banking regulations. However, this year’s Accenture Technology #Vision for Banking report suggests that #banks still have a chance to protect their business #before the heavy rains arrive. The report identifies 5 five technology trends that will allow banks to better connect with customers, move staff to higher value-added roles, and position their business for greater digital relevance.
Read the report
For example, banks can now use embedded AI solutions and Robotic Process Automation to personalize and elevate the interactions between customers and employees, rather than having the humans be governed by the machines. Thirty-four percent of the nearly 600 bank executives who participated in the survey are planning to use deep human behaviour analysis to better understand what motivates customers and design the customer experience accordingly. As human interactions become rarer in banking, the importance of each one going well increases. Human-centric technology design is also critical in a world where customers will increasingly interact with their bank through ecosystem platforms and channels not owned by banks. In many cases, banks will only have a fleeting opportunity to differentiate and brand their services to these customers. So in every interaction, banks need to be thinking about how they use technology to make both customers and staff more productive and loyal.
Another key trend identified in the survey is the rise of ecosystems that extend the banking value chain and shift core banking functions outside #traditional industry walls. Banking executives are more likely than average (36 percent of bankers versus 31 percent of all survey respondents) to believe that it is essential to adopt a platform-based business model and engage in ecosystems with digital partners. Seventy-six percent of bankers agree that competitive advantage will not be determined by their organization alone, but by the strength of their chosen partners and ecosystem platforms where much of tomorrow’s transaction banking will take place. Consumers will expect their banks to be there regardless of who owns the platform.
The ancient Chinese were innovators. They soon began using oil to waterproof their paper windows, making them more robust and durable. Banks also need to be innovators to protect their business models as the competitive and regulatory rain clouds gather. The vast majority of customers want a mix of digital and human interaction, so the role of technology is to enable frictionless digital channels while also personalizing and elevating the human interactions to deliver an empathetic, memorable and differentiated customer experience. The rains are coming, and our Technology Vision for Banking is a #guide to waterproofing the windows of traditional banking before #it’s too late.
I invite you to read about all five trends in the full report: Banking Technology Vision 2017 | Technology For People: Banks’ Path to Becoming Their Customers’ Everyday Trusted Advisor and Their Staff’s Employer of Choice
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#Machine #learning is not new, it is just another level of system automation that financial institutions have been working on for ages. But when it comes to successfully deploying machine learning for #underwriting, #banks are better positioned than #startups, according to Sandeep Sood, vice president of software engineering at Capital One. “Machine learning is absolutely […]
Bank Innovation
Microsoft’s Bill Gates knows a thing or two about #technology. As part of his foundation’s education work, Gates has also learned a lot about how technology can improve the quality of schools. One of his observations is that “technology is just a tool. In terms of getting the kids working together and motivating them, the teacher is the most important … we will still need to make sure every student has an effective teacher, and every teacher gets the tools and support to be #phenomenal.”
The same is true for banking. #Digital channels now allow most banking transactions to occur online anywhere and at any time—and at a much lower cost than face-to-face interactions in branches. Yet despite #salesforce transgressions at a few retail #banks, a human salesforce remains a critical asset in the fight to attract and retain customers.
Accenture’s recent survey of nearly 33,000 consumers in 18 countries shows that two-thirds still want human interaction in financial services, especially to deal with complaints (68%) and get advice about complex products, such as mortgages (61%). While digital channels can effectively provide information, most are still a long way from providing the type of personalized advice and guidance that converts a complex and often ill-defined customer need into a meaningful action.
Banks that want to compete and win against pure digital players need to #create differentiation and competitive advantage by investing to integrate their human salesforce and digital channels. The right digital tools and training can make #bank sales people trusted problem solvers, brand ambassadors and advisors who can orchestrate the best combination of in-person and online banking.
Apple is recognized for product innovation and design, but it’s also mastered the art of physical retailing, creating spaces where customers can both interact with products and also receive tailored, personal sales advice and on-the-spot problem resolution from engaged and well-trained staff. Those interactions have now become as essential to the Apple brand as the features and functionality of the products they sell, and that is why Apple stores have the highest sales per square foot of any major retailer in the US, including Tiffany’s.
To create a phenomenal, highly productive salesforce, banks need to adopt a markedly different talent strategy that focuses on developing new digital and social traits.
An enthusiastic, friendly and welcoming attitude will still be important, but bank executives we spoke to say that the top two attributes banking employees will need in the future are proficiency with digital technologies and an ability to quickly learn new skills.
To enable this workforce, banks will also need to equip sales people with relevant and simple-to-use digital tools that will help them create truly personalized and multi-channel customer interactions. As the digital customer experience has improved, customers have noticed that branch staff often have less access to information than the customers themselves do on their phones, hence their satisfaction with ‘seamless omni-channel’ banking has been in steep decline over the last couple of years.
To be phenomenal teachers and advisors, bank staff will need to be enabled with not only the latest technology and most up-to-date information, but also use automation to liberate themselves from repetitive back-end tasks, so they can focus on the quality and impact of their interactions with customers. They also need to work within a sales culture that values the quality of interactions and the emotional connection with customers, not just the quantity of sales made. Just as in an Apple store, bank employees need to be committed to evangelizing the digital revolution, while still recognizing the unique value added by human interactions. As technology continues to improve, the number of human interactions will continue to decline, but the value of each human touchpoint to the bank’s brand will continue to increase.
In a world where many bank staff are worried about branch closures and the migration of sales and service to digital channels, the role of leaders is to convince them that they can be phenomenal—and to provide the training, tools and incentives to lead the digital revolution in banking, not be victims of it.
To find out more, read the recent Efma and Accenture report, The banking sales force—now what?, which summarizes the outcomes of three interactive think-tank meetings with senior bank executives.
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The payments landscape is changing fast due to new disruptive technologies such as open APIs, distributed ledger #technology, cloud, Apple/Samsung/…Pay, and customers’ expectations are changing for seamless and faster payments. Despite this, I can see clear trends through our work with clients and observation of industry developments, and based on these, I have developed a set of #predictions for #2017.
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Read the full report
In the new world of #digital #payments, many #technology developments are driven by #customer #experiences. #Banks are investing heavily in technological innovations and #Fintech relationships to provide better payments experiences to their customers. Even so, there is a stark contrast between the payments experiences of retail customers and #corporate customers. While retail consumers can enjoy seamless, immediate, always-available payment services with advances such as mobile and contactless payments, corporate customers struggle with rigid paper-based processes, fragmented products and relationships, poor visibility into payment flows and more.
However, I see a shift starting to happen in the corporate payments landscape as corporates start demanding the ability to transact in real-time, in an omni-channel environment, 24/7. Banks such as HDFC, HSBC, and others are already launching their corporate mobile solutions in areas including cash management, trade services, reconciliation, authentication and operational support.
Market dynamics are driving corporates to restructure their operating models, and are driving banks to adapt their corporate payments offerings to meet these new expectations (as shown in Figure 1):
Figure 1
The (re)emergence of virtual accounts is a key trend to watch, with banks such as BNP Paribas, RBS and Barclays leading the way in offering virtual accounts to their corporate customers. Virtual accounts provide corporates with better control over their cash management accounts, reduce administrative costs and optimise the number of real bank accounts, thus eliminating the need for cash management products such as notional pools (at least in the same currency). Banks can also consider extending virtual account management features in a multi-bank environment for the corporates who bank with multiple banks.
Corporate portals are another product that banks such as CitiDirect, J.P. Morgan and Barclays have in their corporate payments service portfolio. A corporate portal presents corporate customers with a single view of all their banking services and activities, and for banks it can support greater cross-sell of products, making it easier to roll out new and enhanced digital services.
As banks strive to deliver against corporates’ expectations, they need to invest in new payments technologies, move closer to corporate customers, and integrate themselves into their value chains. If banks themselves don’t move quickly to seize this opportunity, then somebody else will do it first—thus relegating banks to back-office utilities running accounts for others’ front-office payments offerings.
Accenture recognizes the challenges banks will have in balancing innovation with handling ‘run-the-bank’ issues such as regulation and the inflexibility of legacy systems. Those banks that can execute on both fronts most effectively will win out in the race to forge durable, profitable relationships with their corporate customers.
Read more in the full report, Transforming the corporate payments landscape
The post Corporate payments: Catching up with the customer experiences of digital transactions appeared first on Accenture Banking Blog.
Good baseball center fielders can consistently catch a line drive over second base. They do that by instinctively running to a spot that allows them to intercept a ball that is moving at a fixed speed in pretty much a straight line. #Banks would love to be able to use that same technique to predict and meet customer needs. Just predict where the customer is #going, and then stand underneath that spot to catch the mortgage application or the account opening. Unfortunately, customer needs in banking are no longer behaving like line drives. Instead, they’re behaving like knuckleball pitches that move fast, but in erratic and unpredictable directions.
Read the full report
Accenture recently examined rapidly changing consumer expectations in banking in our 2017 Global Distribution & Marketing Consumer Study, which gathered the views of more than 33,000 #customers across 18 markets. The results were surprising. For example, customers’ biggest driver of loyalty now is their willingness to trust banks to protect their personal data. Transactional trust used to be consistently high across the banking industry, but now consumers are telling us that it is a point of competitive differentiation, so cyber security is no longer just a hygiene factor, it’s a customer acquisition tool. The survey also showed a paradox around attitudes to branches. While only a minority of customers now cite branches as their top driver of #bank selection and retention, over 80 percent of them (including the vast majority of millennials) still want the option of visiting a branch—an option that involves high operating costs for the bank if it isn’t a primary driver of account acquisition—so banks need to find the ‘branch lite’ sweet spot that delivers the option value without fatally undermining their economics.
One conclusion to draw is that customer expectations and needs in banking are far more malleable than they used to be when you had well-established industry norms like the s-curve describing the relationship between branch share and deposit share in a local market. Their experiences on digital platforms like Facebook, Amazon, Uber and Google are shaping what they expect from their bank and this highly iterative process is leading to rapidly changing priorities. To track and capture these customers, the implication is that banks are going to need to stop trying to act like center fielders and start behaving more like echo-locating bats. Bats’ flawless adaptive behaviours, including ultrasonic pulses, agile flight and head-aim control, allow them to detect and capture free-flying insects in incredibly narrow time windows. Likewise, banks need to understand not just where customers are, but also how to jink and weave to zero in on what they are going to need and when they are going to need it.
While ideally banks should use complete customer genomes to track individual behaviours, our research pointed to three distinct consumer personas—Nomads, Hunters and Quality Seekers—with broadly similar needs that banks can use to shape offerings and #marketing tactics. Within these broad personas there will still be a lot of insects and knuckleballs that are moving erratically, but at least banks will be in the right part of the ballpark to make a play on the customer with an offer or piece of advice that has a higher probability of being timely and relevant.
I invite you to read the key 2017 Global #Distribution & Marketing Consumer Study findings in the full report, Beyond Digital: How Can Banks Meet Customer Demands? It also details the three consumer personas and implications for banks as they seek to understand—and market to—today’s banking consumers.
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