Madhur heads the Pre-Sales team at SunTec, which acts as the strategic sales centre for the organizations and is tasked with the responsibility of providing consultation to clients and address their business pain points, covering aspects of solutioning, product mapping and business process definitions. Combined with an experience of 20+ years in areas like pre-sales, solution architecting and client engagement, Madhur brings strategic thinking and global vision into this role.
Prior to joining SunTec he was with Oracle Financial Services, having served in multiple capacities during his 12+years with them.
Banks have to try harder. To be fair, they didn’t have to before 2008. Then came the Global Financial Crisis, causing the break-up of the Big Banks, and followed swiftly by the rise of agile Challenger Banks feasting on the consumer distrust. Banks realised they have to move fast to catch up to match customer experiences found in the Retail, Telecoms and Logistics sectors.
Customer experience management must change for the better, and data can help. Utopia for banks is to get their data to a place where they see a single, consistent view of the customer. Although easy to say, it is a difficult goal to achieve at least partly due to cultural and technological legacies.
A bank with a truly digital core would have its entire set of customer data held in one layer which drives customer relationships. This strategic layer is the difference between knowing your customer and losing them to a rival because it makes clear to internal marketing, product and research teams the true value of each individual relationship. It is the only way to drive a consistent, constantly updated and informed approach to customers, who today not only value this, but increasingly expect it.
Digital Transformation is a frightening process for banks. Some would rather keep existing systems in place and promote the same products to the same segments than listen to customers’ demands. This leaves banks selling products which aren’t personalized and with no net new revenues. Incredibly due to the siloed nature of banking infrastructure, most banking back offices do not know what’s being sold last year, let alone today.
It is tempting to start afresh but one of the reasons a ‘rip and replace’ method should be avoided would be the high cost of revamping core banking, to remap and untangle the patchwork of core systems. Moreover, most overhauls actually reduce business value, as transformation projects are often not completed on time. System overhauls meet boardroom demands but are ignoring customer’s real time needs.
Core systems have too much value to be culled. They hold the golden sources of data such as credit card and social security information, these systems are the master log books which then is used to help build and personalize customer experiences. Banks should not do overhauls of core systems unless there is quantifiable business value attached to it. Banks need technical assistance to remain relevant. Enter the Middle Layer.
Becoming digital is a complex process for many banks. Any organisation digitally transforming has to earn complete boardroom buy-in and this requires transparent communication with every business unit and employee. Talking about value creation is a good way to start the dialogue.
The mission of Digital Transformation programmes is to create lifetime value for each and every customer. The digital core leads the entire digitalisation programme because it is the first location where the customer, therefore the bank will see improved experience delivery. The middle layer brings together stable, but aged, systems of record with the modern, all-frills-included systems of engagement. Some banks have misjudged the onion-layered chaos of core banking systems and tried to mould them into systems of engagement with disastrous effects. Going hybrid is the future in banking because, as many have learnt the hard way, systems of engagement should not be used as a system of record, nor vice-versa.
The middle layer bridges the two worlds of old and new, valuable and flashy. The layer provides banks with real time data in a single place and the ability to integrate existing systems with external systems from ecosystem partners through open Application Program Interfaces (API). The middle layer enables banks to have complete data sets and build a narrative around a customer.
Systems of engagement are where customer experience is taken to the next level. The front line applications used by customers who is interacting with the bank via a variety of channels. A customer can build a relationship with a bank from the voice-enabled Amazon Echo and Google Voice to ‘Selfie-Style” mobile payments from Mastercard.
The challenge of having a plethora of touchpoints for banks is to maintain an accurate narrative with the customer. Context of the consumer and how she behaves is stretched across social, digital and mobile channels. It is important to note how the customer engages with the bank and even more useful to know where they engage. Knowing a customer well requires analysis of historic and real-time data to produce an offer which profits the customerthe bank.
Banks are still being unfortunately driven by their legacy core products. Customers are looking for solutions, not products. Consumers have so much choice today for financial services, including from providers who aren’t regulated banks. Systems of record were not built for 21st century agility and they do not have the ability to compartmentalise customer personas, produce a bundle, nor offer self-service for customers.
Banks require their product catalogue to be as nimble to meet the growing demands of the population of Millennials. Nearly nine out of 10 surveyed by Forbes anticipate a life event happening in the next three years, such as student loans, buying a home, getting married, having a child or getting a car loan. These are significant opportunities for the primary banking institution of the customer. Becoming number one on the shortlist requires banks to evolve to a customer-focused mindset to get to the right customer with the right products at the time of need.
Core systems are very effective in speaking downstream to back office operations, however modern banks require systems to speak up and out to front-end applications or connecting with partners through an API network. This is where the digital core can assist with up and downstream communications. Customers move quickly and banks should co-operate with FinTech brands if they feel they could mutually benefit from a partnership. The inability to collaborate could lead to banks disappearing into the background as their customers feel more comfortable in using virtual, app-based services.
Regulations such as Payment Services Directive II (PSD2), which goes live in less than 12 months, is putting pressure on established banks to let third parties use the information stored in their systems through the implementation of Open APIs. Banks should see this as an opportunity to build an API ecosystem to make effective use of the large pools of data they have through their partners. Through API banking, heritage banks can learn new tricks and discover the most efficient ways to become customer focused. In a world where digital capital is defined who a person is linked with on social media, it is time for banks to review who they hold court with.
Banking IT revamps are not for the faint hearted and some banks would attest with delayed implementation timelines. To marry siloed core systems to state-of-the-art systems of engagement used by customers, banks need a digital core sitting on top of all data. This digital core will be the mainstay of customer experience, and the value of the banks will be determined by the partners they are connected with through APIs. The opening of the once stuffy financial services industry could well bring greater social equality to any population as the means to manage their finances have become easier to use. The Fourth Industrial Revolution advances civilization through simpler financial services.