IBM’s Watson Takes On Risk And Regulation In Finance
IBM is offering #risk management and RegTech solutions with sophisticated #technology to reduce time and costs.
Financial Technology
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Does Schwab Have Pizza Envy?
Financial firms need to improve transparency and reduce costs, the CEO of #Schwab told the Morningstar Investment Conference recently.
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Great Customer Experience In Banking Can Be Worth Millions — Forrester
Customers expect clear communications, good web sites and mobile functionality from their financial firms. They want respect and help with their financial lives, and most U.S. #banks don’t rank high in those areas.
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Fifth Third Bank Strives to Make Cincinnati into the Next Fintech Hub
PREMIUM – #CINCINNATI — This city might seem like an unlikely place for #fintech innovation, but it has the ingredients to be just the right breeding ground for financial #technology improvement. At least that’s according to #Fifth #Third #Bank, one of the nation’s 25 largest financial institutions, that is headquartered here. Amber Steedle, Fifth Third’s senior […]
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Talent and transformation: New strategic approaches for banks
Around the world, #banks are engaged in the transition to what we at Accenture call “the New”; they are undertaking initiatives to digitize operations, reduce costs and create previously unexplored revenue streams.
The transition to the New is based upon the twin pillars of #technology and #talent. The technology—in the form of cloud, big data and analytics, #blockchain, robotic process automation, machine learning and artificial intelligence—is readily available, and although it may not be easy to identify the right solutions and to graft these solutions onto the existing computing and data framework, it can be done.
However, as banks are discovering, it is just as difficult to build and maintain the talent pillar as it is to develop or acquire needed technology. Banks are competing for new talent, not only with other banks but with technology start-ups, internet giants and a variety of digital players. Indeed, digital players interested in making inroads into the banking market are poaching talent from the banks themselves.
Banks have not helped themselves on the talent front with their unrelenting focus on cost reduction. They have announced staff reduction objectives connected to plans to digitize and automate. This may please shareholders, but it can hardly be expected to please staffers worried about being displaced by digital technologies. Banks will be unable to compete with the Googles and Apples of the world if they are not seen as valuing the major asset (along with capital and liquidity) embodied in the competency and customer focus of their people.
There are, in my view, three key steps banks need to take in dealing with the “people problem” and the impact of digital #transformation upon the workforce:
- Banks should figure out where they stand on workforce issues. This means either admitting that the workforce is, in effect, a commoditized asset to be managed for optimal efficiency at the lowest possible cost, or making it clear that talent is a competitive differentiation point and that people are central to the success of the organization. Depending on the bank’s overall strategy, either approach might be valid, but claiming that people are vital and then treating them as interchangeable parts is a recipe for failure.
- Banks then need to take actions appropriate to the people strategy they have adopted. Banks’ actions should match up with their stated objectives; for example, few banks have increased their training budget in recent years, even though training might be an excellent path to creating the intellectual property and people asset that distinguishes one bank from another in the marketplace.
- Banks need to acknowledge that they (and their people) live and work within a larger social context. In modern industrialized societies, large employers have obligations to their workers that extend beyond compensation and benefits. Banks contemplating major restructuring or reductions in staff due to digital initiatives should be working with an ecosystem of partners—including universities, government agencies and other potential employers—to develop coherent solutions leading to retraining and employment for displaced workers.
Banks have not yet come to grips with the full impact of digital transformation, including automation and artificial intelligence. In my next blog, I will look more closely at how artificial intelligence will affect banks, and how banks can create a powerful new force by combining AI with human insight and judgment.
For further reading about the impact of technology on the workforce, read Whose Customer Are You? The Reality of Digital Banking.
The post Talent and transformation: New strategic approaches for banks appeared first on Accenture Banking Blog.
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Can Technology Save Bank Branches?
PREMIUM – When was the last time you went to your #bank branch to deposit money? Still thinking? That’s because most daily banking activity has shifted from #branches to the smartphone. But that’s not to say people don’t use bank branches at all. They do, but not for the same reasons as they did in […]
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Finastra Develops An Open Platform For Banking Apps
#Finastra‘s #banking #platform offers a way for financial services institutions to innovate faster, and way for #fintech firms to partner with #banks.
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Solving the delivery conundrum
Guest blogger Mark Welsh discusses how #banks can successfully scale application delivery and meet customer delivery requirements against the backdrop of increasingly complex in-house systems and a worldwide-shortage of software engineering talent.
The Banking landscape is being influenced by significant forces of change. New customer and industry demands mean financial services businesses must bring new features and technologies to market faster than ever. If they don’t, they risk falling further behind the competition, whether that’s rival companies that have transformed and broken free from legacy systems or new entrants with greenfield solutions.
It’s a big challenge. Particularly with a worldwide shortage of software engineering talent and in-house systems that are becoming increasingly complex, as new layers are added onto legacy solutions.
Given these constraints, how can financial institutions meet customer delivery requirements?
How to scale delivery?
#Solving the delivery #conundrum means addressing three areas: People, #Technology and Process.
People
The obvious way to scale delivery output is to increase team size and/or number of teams. But even ignoring the challenge of recruiting/retaining the right developers, you’ll quickly hit the ‘pizza boundary’: Jeff Bezos’s rule that a team should be no bigger than two pizzas can feed.
The number of communication points increases non-linearly with each additional team member, so expanding a team’s size beyond a certain point becomes counterproductive (extra communication complexity outweighs additional capabilities/capacity).
Figure 1: More people = more complexity
Source
Large teams also engender ‘social loafing’. Team members have more opportunities to hide, aren’t encouraged to drive development forward, and are generally less dedicated to team and product success. Sound familiar?
Next question: how should teams be aligned? Product features span multiple lines of business. The same holds for technology: any feature will likely require changes/new development across various architectural layers and technologies.
So, do you split your teams horizontally, matching stack layers and enabling team alignment around key technologies? Or align them around product features, enabling team ownership of a complete feature, but requiring either a sub-structure within the team to align with technology layers or full-stack developers (‘jacks of all trades, masters of none’) that deliver end-to-end?
It’s probably best to mix the two: recruit and train team members to develop across layers (not all layers, there will always be specialisms) and build on a more vertically aligned solution as the feature moves up the stack (with the bottom-most layers delivered as a platform—see ‘Technology’.)
Ultimately, smaller teams with ‘t-shirt shaped’ developers (depth in one or more technology areas/breadth across many) will be much more productive than larger teams with lots of specialists. With the right recruitment and training strategy, it’s possible to create highly productive small teams focusing on a mixture of technologies across product feature areas. That ensures end-to-end ownership within a single team.
Technology
Where possible, splitting the system across the right boundaries will enable independent delivery that supports output scaling. After all, while an end-to-end feature is only delivered once, its constituent parts are delivered separately. However, breaking the solution up can mean the product becomes inconsistent and fragmented for end-users. Having somebody manage the system as a whole is essential.
There’s also increased need for engineering and delivery platform support to ensure consistency and efficient use and creation of assets. These platforms should be managed through ‘Guilds’/communities of practice and, where appropriate, draw on examples like GitHub, npm and stackoverflow for inspiration.
Technical debt is another key factor—ignoring it creates a drain on developer capacity and motivation. Of course, it’s difficult to justify technical debt stories over feature development. But understanding the direct impact on delivery timescales, productivity and production risk will help drive conversations that ensure a balance is achieved.
A key aspect of approaches taken at Amazon, Facebook and Netflix is the automation of repetitive tasks, either by adopting an industry toolset or, where that doesn’t exist, developing it in-house. Giving developers the tools they need has a measurable delivery benefit and directly impacts developer motivation and retention. Typically, capacity investment of five to 15 percent is needed to maintain a good development architecture.
Process
Process and governance are key contributors to the time it takes to get from idea to live. In many banks and financial institutions, processes are put in place as a direct regulatory requirement and cannot be bypassed.
Other, non-regulatory, processes will have often been added or modified in response to delivery issues or production problems. Frequently knee-jerk reactions, they don’t fundamentally address root causes.
All these processes have an impact on motivation. Skilled developers do the right thing not because it’s written down and checked multiple times, but because it’s the right thing to do. But good processes remain crucial—to provide a safety net for new and bad developers (and for good developers having a bad day!)
Achieving ‘good’ processes means continually reviewing them against the risk they’re attempting to mitigate. They must be understood—and wherever possible, automated—to eliminate the variability that’s inevitable when people perform repetitive tasks and (for regulatory processes) to increase speed/quality of compliance.
Taking action
To successfully scale application delivery, we recommend focusing on:
- People: Understand developer productivity and where your key people are, use automation to enable them to focus on building stuff, get the right people in the right roles (t-shirt shaped) in small teams and give them tools to be productive, use Guilds to drive collaboration.
- Technology: Focus on development tooling as much as production coding and continually invest in it, componentize the platform to enable decoupled development and releases, actively manage technical debt, provide managed assets to support consistency/accelerated development.
- Process: Appropriate process and governance continually refreshed, automated where possible.
Each of these areas will balance/constrain/support the other two (e.g. good tooling can enable process automation, which improves developer motivation/productivity). Thanks for reading.
Mark Welsh, Technology Architect
The post Solving the delivery conundrum appeared first on Accenture Banking Blog.
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CitiConnect APIs Support Real-Time E-Commerce Payments
#CitiConnect‘s #APIs #support new business models in e-commerce with 24×7 payment operations.
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Bankers, these five tech trends hold properties to hydrate traditional business
The United Nations’ set of principles to help change the way the world uses and manages water, opens with a profound statement: “Water is precious, fragile, and dangerous…Water and its sources must be respected, because, if neglected, it has the power to harm, divide or even destroy societies.”
Read the report #Technology can be a lot like water. It’s prized for its ability to #hydrate business and society, and we’ve seen its beneficial impact on the world’s unbanked. Between 2011 to 2014, the World Bank reports the number of unbanked individuals dropped by 20 percent—thanks to mobile offerings from #banks and mobile money service providers. In China, technology has moved a cash-driven society to one that had $ 15Trn in mobile payments last year, accounting for two-thirds of the global total. Yet, technology can also be incredibly disruptive and fundamentally change industry structures, creating winners and losers in the process. Think Netflix and Blockbuster; Uber and the highly regulated taxi industry; Expedia and travel agencies.
In banking, both old and new industry players need to understand and respect the impact of fast-proliferating technology—if they are to both tap it for its transformative power and avoid being set adrift in an ocean of competitive sharks.
In our recently released Banking Technology Vision 2018 report, we highlight #five emerging technology #trends that could each spark the next wave of industry disruption. Even in markets that currently look stable and profitable, #bankers must be prepared to deal with the threats and opportunities arising from #these trends to ensure that they are truly future-ready.
Inaccurate, unverified data will make banks vulnerable to false business insights that drive poor decisions.
One of the trends is the emergence of artificial intelligence as a member of the bank workforce, working next to humans in a symbiotic relationship as co-worker, collaborator and trusted advisor. Nearly 80 percent of bankers in our survey believe that this will happen within the next two years. This is fresh water cascading on what is often a technologically dry element of a bank’s operation, where employees lack the innovative capabilities at work that they use and enjoy in their personal lives. AI as a more visible, trained and accountable co-worker can help bank workers perform their work more efficiently, deliver service that builds customer trust, and drive business growth.
Just as water must be clean to be useable, so must data. Eighty-one percent of bankers said they are basing their most critical systems and strategies on data. Yet, 28 percent said that they do not validate or examine the data they receive from ecosystem or strategic partners most of the time, and five percent said they do not validate at all or rarely do. Inaccurate, unverified data will make banks vulnerable to false business insights that drive poor decisions. Banks can address this vulnerability by verifying the history of data from its origin onward—understanding its context and how it is being used—and by securing and maintaining the data.
I invite you to read our full report, Banking Technology Vision 2018: Building the future-ready bank.
The post Bankers, these five tech trends hold properties to hydrate traditional business appeared first on Accenture Banking Blog.
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