Billing Should Move Away From Paper Of The Pony Express Era
#Billing offers a way to reach out to customers, but opportunity is wasted if it is run by operations and ignored by marketing.
Financial Technology
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Free core banking from the ASP model to be future ready
Legendary magician Harry Houdini used to perform spectacular escapes #from handcuffs, straitjackets, ropes and chains, and often combinations of them. One of his most famous and difficult escapes was the 1904 London Daily Mirror Handcuff Challenge, where Houdini managed to escape from a pair of handcuffs that had taken a Birmingham blacksmith five years to perfect.
Read the report Many bankers see the traditional application service provider (ASP) #model for managing their #core systems—renting the use of core #banking software centrally hosted and managed by a single vendor—as a set of handcuffs they cannot pick. The ASP model proved useful in the early 2000s in helping #banks lower costs. Yet over the years, the constant adding on of various components (think digital user interfaces or new payment types) atop 30-year-old #technology has created an increasingly complex maze of systems that is now hard to maintain, difficult to integrate, designed for “vanilla” service, slow to change and costly to service. Add to that the frustration of vendor-controlled product releases that can take the #future of banks’ IT innovation out of a CIO’s hands.
If banks are to have a chance of competing for customers’ attention and business against the likes of Amazon, Google, Alibaba, fintechs and others, they must devise a clever escape from the constraints of the ASP model. Digital rivals are built bottom up on IT systems that are open, scalable and flexible, enabling innovative services, high-speed responses and efficient operations. Banks need the same traits to be future #ready—to connect with broader digital ecosystems and deliver hyper-relevant services (financial and non-financial, human- and automation-supported) through multiple and rich channels in real time. Those banks unable to rise to the occasion risk becoming digitally irrelevant and targets for acquisition.
Luckily, the typical ASP model is not escape-proof. While Houdini was an illusionist who used tricks to perform his death-defying feats, banks can take a few well-staged steps to truly #free their core banking systems and become future ready.
It begins with designing the bank’s future-state IT architecture. For the future-ready bank, we envision the ASP model evolving to serve as the engine for Systems of Record, Messaging and Services activity. It will be open, modern, secure and agile enough to allow for seamless integration of applications, API management, Cloud hosting, and plug-and-play of best-of-breed technology. Rather than having the lion’s share of its IT served by a single ASP provider, the bank provider pool becomes more diverse, fluid and adaptable. Then, banks will need to rewire their IT delivery organisation to adopt a multi-speed approach, operating and simultaneously supporting multiple business objectives. They will also need to “hollow out the core” and diversify the providers of IT technology for greater flexibility and innovation. Houdini used keys and cutlery; banks can use processes and technology to free themselves from the handcuffs of the ASP model.
Read our recent report, Breaking Free of the ASP Model, for a closer look at how banks can break free of their ASP model—and how a few banks are already doing it.The post Free core banking from the ASP model to be future ready appeared first on Accenture Banking Blog.
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Artificial intelligence: Unlocking value from process
I have recently moved to Dublin for a six-month secondment, and have the pleasure of leading our small but growing Accenture Research team based at The Dock, Accenture’s state-of-the-art R&D hub.
This is an amazing space to work in, where that terrible phrase “the art of the possible” isn’t so cringingly hackneyed, and actually means something. In a room close to where I am sitting writing this, there is a team creating software for a space “cube” that will be launched into orbit to gather data for a project (I could tell you what that involved, but then it would automatically self-destruct etc., etc). In this environment, automation could almost feel old hat.
Not so intelligent automation though. This is definitely in the realm of “anything is possible”. Intelligent automation learns as it works. It isn’t just doing what it is told; it is constantly adapting to new situations. Imagine a #robo-advisor that remembers when a customer started to sound agitated during a call, and adapts the number or style of questions they ask on their next interaction, to try to improve the experience? Hyper-personalisation of services is an expectation by which customers will increasingly rank their banking experience, as they become used to having the choices available to them through Open Banking. And intelligent automation is one of the core tools available in a bank’s armoury to get them to this level of service, without (ahem) breaking the bank.
#Banks are in the perfect position to ride this wave of personalised services—if they can adapt to a platform that funnels a customer towards these slicker services. And thanks to intelligent automation, this need not come at a hyper-cost to the business, with fully automated approvals that adapt to a users’ preferences and usage of third parties. Even the potential for fraud could be reduced as a result of IA learning a customer’s patterns of use and being able to spot anomalies and potentially fraudulent transactions.
Aside #from the pure efficiency benefits available from IA, this #technology could also provide recommendations to customers for products and services available to them based on their current circumstances and financial needs, such as an overdraft facility if they are low on funds. Thanks to IA, the bank knows that based on previous spending patterns, the consumer will likely need £x amount to spend until their next bank credit payment is due.
This intelligent automation of services is heavily reliant on data, the last but by no means least part of the AI trinity: People x #Process x Data. And there are numerous ways in which banks are custodians of vast amounts of customer information, which is ripe for a reinvented approach. And they don’t even need to send a cube out into space to achieve this.
The post Artificial intelligence: Unlocking value from process appeared first on Accenture Banking Blog.
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Artificial intelligence: Unlocking value from data
One of the key things I have learnt since recently moving to Dublin is that a little information goes a long way.
For instance, I have already learnt that Guinness tastes infinitely better here than it does anywhere else in the world. Another vital piece of information I learnt the hard way, is that you should never, NEVER, go anywhere without an umbrella. Even if it is a sparkling clear day when you step out in the morning, by the time you reach the end of the road you could easily be under attack #from a sideways-driven sheet of rain…it is not the emerald isle for nothing!
Information is the cornerstone of most of our decisions, and #banks should be no different in making use of the vast quantities of #data that they have in order to determine their next steps or provide new hereto underestimated potential revenue streams.
A slew of regulations about to be implemented, including Open Banking and GDPR, could be seen as an inconvenient obligation—or worse—a threat to the incumbency of the traditional bank. Allowing as they do, greater access to third parties, to the valuable relationship between bank and customer, and greater control to customers over their own data. Banks might take comfort from the fact that customers are currently nervous of sharing their data with anyone other than their bank—85 percent cited the potential for fraud as a key reason they would be reluctant to allow third parties to access their data—in one of our recent surveys. Yet this will only last until a critical mass of a customer’s peers start to recommend an alternative service (think Uberization), and suddenly the returns outweigh the risks.
But fortunately, banks are coming around to the idea that these regulations regarding data management and access are a beneficial catalyst to embracing the next generation of banking services. And that using the huge amount of data they possess to break down revenue siloes centred around a particular product or service, and gain greater insight into their customers, will place banks squarely in the zone to be the innovators of the future.
Banks are still in a position of trust: Most customers would prefer their data be used by the bank, rather than a third party, to provide better services. Although it would be prudent for banks to start adapting the type of service they have now, rather than waiting until they have fixed all their legacy issues, as some appear to favour.
Adopting a data-driven platform model in which a bank is the custodian of this valuable data commodity, and can channel consumers towards products and services offered by others, could create a new revenue channel for banks. They would be able to still offer their own products, but for those they cannot help—perhaps due to risk appetite or a product/service they do not offer themselves—they could conceivably charge other providers a fee for product recommendations to customers.
Providing a secure way for products to be offered and availed of by customers is also within the influence of banks. They have huge amounts of security experience, which incoming financial services providers may lack, and which a bank may also be able to monetise, based on what they know about customers’ needs and spending habits through their data.
Timing is everything though, and waiting to fix all your legacy issues before moving forward could be very costly. Digitally decoupling and adopting a two-speed development strategy to leapfrog over some of these issues, should be more than just a “would like to have” strategy—creating an environment where data can drive forward new products and services, and create multiple new revenue channels concurrently. Developing, deploying, and scaling at speed is within reach of banks, so long as they adopt and adapt to the new narrative of the industry.
As one of Ireland’s favourite sons once said, “Consistency is the last refuge of the unimaginative”, and while the quality of service offered must always be of a high standard, the way in which it is offered or charged for, based on new and innovative ways of interpreting data, is ripe for reimagining.
The post Artificial intelligence: Unlocking value from data appeared first on Accenture Banking Blog.
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Grab, Southeast Asian Transportation App, Snags e-License for Pay Services from Malaysia
#Southeast #Asian ride-hailing app #Grab will now offer mobile payment #services in #Malaysia thanks to the regulatory approval it received #from the country’s central bank, Bank Negara Malaysia today. The app is called GrabPay and will be rolled out in four phases in 2018. It is aimed to encourage customers and SMEs to go cashless. […]
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Kabbage Gets $200 Million from Credit Suisse
Small business lender #Kabbage received $ 200 #million in revolving #credit #from Swiss financial institution, Credit #Suisse. The funds will used by the Atlanta-based Kabbage to scale and expand its lines of credit with longer terms to its existing customer base, as well as some of the larger small businesses. Kabbage now has a total debt […]
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Marcus from Goldman Sachs Surpasses 2017 Goal
EXCLUSIVE- Online consumer lender #Marcus by #Goldman #Sachs has reached its annual #goal for loan originations. Martin Chavez, chief financial officer for Goldman Sachs, showed in a slideshow at a Bank of America Merrill Lynch event yesterday that Marcus had already surpassed $ 1.96 billion in originations as of Nov. 9. “We actually crossed $ 2 billion […]
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Fireside Speakers from Visa and Chain Announced for Bank innovation 2018
Two #speakers have joined the speaker faculty of #Bank #Innovation #2018 for #fireside chats: Avin Arumugam, senior vice president of Internet of Things at #Visa, and Adam Ludwin, CEO of #blockchain startup #Chain. Arumugam was previously head of next-generation payment products at JPMorgan Chase, as well as senior products manager at PayPal. Ludwin founded Chain […]
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More Credit Cards From the Amex and Hilton Co-Brand
EXCLUSIVE – Add another #credit card to list, or rather add four to the ever growing list of #cards. This new collection of cards are coming #from American Express’ co-brand relationship with #Hilton Hotels. #Amex also announced today that it purchased Citi’s Hilton co-branded credit card portfolio, making it the exclusive issuer of all Hilton […]
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SWIFT’s Innotribe Will Seek Lessons From Outside Financial Services at Sibos 2017
#SWIFT’s #Innotribe program will look #outside the #financial #services industry for ideas on how to build on legacy.
Financial Technology
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