In two weeks, 11,000 of the world’s most prominent financial services professionals from 4,500 banks, fintech companies, insurance and wealth management firms will attend Money2020 in Las Vegas to discuss topics like digitization, blockchain, open banking, regtech, customer experience, Internet of Things (IoT), and artificial intelligence. Cisco’s Director of Industry Solutions, Jason Bettinger, will take part in a discussion on Tuesday, October 24 about the future of technology in banking.
However, before you can become a bank of the future, you first have to future-proof the bank. Below are three areas to focus on as you think about how to secure your place in the digital future.
1. Use data to help customers manage their money
Some interesting findings about consumers’ relationships with money emerged from a 2017 survey by ReD Associates and Cognizant:
- 37% of consumers say finance and money challenges are their biggest source of stress, far surpassing stress from their jobs and health issues
- Twice as many consumers described their financial providers as wanting their money (42%) vs. helping them get more out of their money (21%).
- Financial institutions are seen as utilities: 90% define their relationship with their bank by simple transactions, such as depositing money and checking account statements.
- Less than one-third of consumers have experienced a financial services professional from their bank reaching out to ask them about insurance, retirement savings, or maximizing their assets.
The study concludes that overall, consumers feel like they don’t have control of their finances. But at the same time, banks are uniquely positioned to help customers achieve financial goals and guide them through complex financial decisions.
Perfecting the customer experience isn’t about developing the next, best digital tool. It’s about allowing the customer to interact the way they expect to, not the way their provider wants them to.
Translate consumers’ financial data into information that is meaningful for them.
Banks that build better models to inform predictive analytics and behavioral forecasting while respecting consumer privacy will better understand when their customers are about to experience life events with big financial implications. Migration to a hybrid-cloud based infrastructure allows financial institutions flexibility to leverage big data for real-time insights, identify patterns, and offer better probabilities. When banks begin to leverage their massive data stores to help customers gain control of their finances, they can become more relevant and differentiate themselves as digital leaders.
2. Empower staff to collaborate
Even though it may seem that transactions are migrating to digital experiences, customers still want the option of human interaction. According to the Accenture 2016 North America Consumer Digital Banking Survey, 87% of U.S. consumers plan to visit branches and want to interact with humans when they do. Banks must integrate digital and physical channels to improve the customer experience and operational efficiencies.
- Empower bank employees with technology and data to offer the best advice at the right time so that they can empathize with customers and solve problems intelligently and quickly.
- Develop a “bring your own device” policy so that customers and employees can use similar devices and platforms.
- Remove repetitive administrative tasks tied to complicated processes to make staff more productive and engaged.
The Accenture 2016 North America Consumer Digital Banking Survey notes that the winner of the talent war will employ an agile workforce:
- 72% of bankers believe corporate bureaucracies are stifling productivity and innovation. Yet bankers are less likely to consider an increase in innovation via dynamic teaming (36%) as the top motivator for an agile workforce.
- 76% of bankers agree that organizations that are able to build a strong agile workforce will win the war for talent.
- 81% agree that organizations that successfully integrating an agile workforce into their business model will gain a significant competitive advantage through innovation.
Excessive bureaucracy and cumbersome processes are at the root of organizational drag and the slow-to-innovate nature of financial services. Process-focused employees try to run the bank, whereas those with an agile mindset try to change the bank.
Through collaboration technology, bank employees can develop greater business agility by breaking down the silos that naturally develop between lines of business, and by identifying better ways to work together inside today’s challenging regulatory environment. A collaborative culture that encourages innovation through iteration will ensure digital bank models work.
3. Support a future-proof digital business model with a future-state core network
Nearly 90% of the banking executives participating in the Accenture 2016 North America Consumer Digital Banking Survey agree that their organization must innovate at an increasingly rapid pace just to remain competitive, but less than half (47.8%) say they are investing comprehensively in digital as part of their overall strategy.
The U.S. financial services industry is hampered by immense, monolithic software and a conservative approach where change takes place slowly. Financial industry analysts from Gartner maintain in their 2017 Strategic Roadmap for Networking that this traditional culture has paralyzed the industry, resulting in U.S. banks falling behind not only agile fintechs but also financial services peers around the world. As open banking begins to take hold in the U.S. as it has already done in Europe, network components in financial institutions will be required to become more modular, API-driven and often controlled by systems outside network operations.
The number of digital devices that must connect on a daily basis to the network is steadily increasing and mobility is taken for granted due to customer Wi-Fi access, the IoT, and employees bringing their own devices. According to Gartner, to meet emerging digital business demands, the digital banking network of the future must become simpler at all stages.
Join us at Money 20/20
The digital future is upon us, and it requires a foundation strong enough to support the rapid pace of change.
- Join @JasonBettinger during Lunch with the Innovators at #Money2020 on Tuesday, October 24 from 12:00 p.m. – 1:00 p.m. PST. He’ll discuss where financial technology will move the industry in the next 3-5 years, along with fellow panelists from @ACI Worldwide, @DBS Bank, and @Infosys.
- Please use code CISCO250 to save $250 off your registration fee. Register now.
- Are you a financial services leader attending the conference? Register to attend a complimentary luncheon on Monday, October 23 to learn how your organization can leverage the Apple and Cisco partnership to accelerate mobile transformation and reinvent customer experience from inside out!
For more information about Cisco Financial Services, please visit our website.