A few key questions arose during day 2 of Backbase Connect. How can banks and insurers speed up their digital transformation as the sands constantly shift beneath their feet? Making the decision to get digital right is one thing, going about it is another. Driving digital means hiring people with the right skill sets, huge capital layouts and above all, trying to navigate a maze of new technologies. How is it even possible to know where to invest? Which technologies will last the distance and which ones will simply fizzle out? The answer lies in collaboration, reaching beyond the organization to enlist the right help – this was a key takeaway from this morning’s sessions at Backbase Connect.
A technology partner like Backbase exists to ensure you don’t bank on the wrong technology. By operating within that ecosystem on a daily basis, and engaging with a mature base of technology providers, they already know which solutions are the right fit and are future proof.
The right focus is as important as the right partner, and the advice from AIB, IBM and other speakers of the day was that the focus must be on the customer. Brian Dillon of AIB noted how they undertook a huge project to analyse their customer’s needs. The sheer scale of effort needed to bring all of the expertise in-house to answer those needs was huge, so they collaborated with Backbase to accelerate time to market.
Cognitive banking – not just a spruced-up version of the traditional bank
Kwafo Ofori-Boateng of IBM immersed us in the topic of cognitive banking. He made it clear that disaggregation is here to stay and that banks will increasingly operate as part of an ecosystem. This creates opportunities to build banks on a platform model and it demands some decision-making. If I can’t play the role of all the parties in the ecosystem – which one do I specialize in? Answering this question sets the stage to build on social platforms, allowing a bank to essentially disaggregate itself and by doing so, specialize for success. The glue in all of this is the data, and using it properly to truly understand customers. Rather than being an after-the-fact analysis, cognitive banking taps into the decision making process before customers act, predicting what they will need and actively offering suggestions.
Keeping up with the pace of change
Jens Lottner of Siam Commercial Bank echoed the need to engage customers before the transaction. They have dug deep to change the company DNA as part of an effort to keep up with disruptors such as Tencent and Alibaba. This was vital to success in a continent that is a hotbed of innovation. They took on the challenge of engaging customers beyond transactions, connecting their banking life to other channels. An SME platform was also created in conjunction with a start-up from India, a place for small business owners to connect. A worthy cause – and a rich source of data, which SCB can mine to target communications.
Roberto Ferrari of Italy’s CheBanca! commented on how blends of human and digital have become so common that hybrid is now the norm. Banks are no longer alone in their local industry as global innovators move into their markets. Banks must make data deliver using AI, and these innovators specialise in just that. Tim Rutten of Backbase also noted the prevalence of AI and how the world is increasingly using learning (AI) rather than hard-coded rules to solve problems. AI can help us learn from the mass of data we need to process for meaningful customer insights. It’s still early days in banking, but using AI to sell, assist and advise customers is already gaining traction.
Combining physical and digital experiences
Christoph Wille of Valiant provided a prime example of how human and digital can combine. This Swiss Bank, which as recently as 2015 has no digital footprint, became the first in Switzerland to offer complete digital onboarding by 2016. Despite the growth of digital, as Tammy Gedetsis and Kimberly Collins of Key Bank pointed out, branches are not completely dead, in fact they still have a role to play in any transformation. Valiant have figured out how to build new branches for less than the cost of original ones, whilst bringing them to a new level. Self-service boxes, scanning cameras and fully digital reception desks sit alongside rooms where people can meet advisors for personal advice. For mortgages, conversion rates were still higher with face to face on-boarding than with digital, so they use online channels to prepare for a face to face consultation – a great example of online and offline channels working in harmony to boost conversions.
A telcom gets into digital banking – with incredible results
Orange are a huge Telco brand, yet within 15 months, they managed to open a digital bank that attracted thousands of customers within 10 days. By keeping things open in terms of platforms and requirements, they accelerated their footprint in the banking sector. With Orange Bank, customers can use SMS to transfer money – a telco product becomes a banking product. This was a huge project as it was so new and unique. It required bringing divergent teams together and was watched closely by the market. Andre Coisne of Orange Bank and Anis Chenchah of Capgemini discussed the realities of such a high stakes achievement.
No need to re-invent the wheel
Despite the demands to renew and re-invent, Manuel Schreurs of Backbase cautioned on the temptation to over-customize. He gave the example of the Samsung smartphone, designed on the same principles as the iPhone, yet a huge success. The industry standard really can be good enough to start out on. From there it’s possible to grow and add value. In fact, transactions may fundamentally stay the same, maybe customers don’t necessarily need to re-invent them with you. They want to transact in an easy way, so building on the industry standard is just as valid a way to create something new.
Overall, a day of insights and discovery with a strong mantra: Whether banks or insurers wish to eradicate or enhance what has gone before, the key is to focus on customer needs. What counts is using the right technology to make smart decisions – that is how they can secure their future in an ever-changing world.