Digital 360 - for Commercial Banks

 ‘Design Considerations’ for Commercial Banks

Commercial Banks are no exception to the ‘Digital Tsunami’ that is sweeping the globe. While Retail Banks try to emulate the models adopted by the retail giants such as ‘Amazon’ and ‘Google’ that have emerged as role models in defining  Customer Experience ( CX ), the Commercial Banks are in a fix whether the same ‘copy & paste’ paradigm will work for them, as they are in a  different realm, dealing  with  an entirely different set of customers who are Corporates & SMEs. While a retail bank’s  success will be directly influenced by its end clients who are individuals, the success of a commercial bank will be influenced  not only by its customers but also by how effectively those commercial customers are able to meet their end customers’ needs . While the ‘wholesale’ nature of the commercial banking transactions,  signifying higher volumes & values of transactions per customer ( TPC ),  would warrant different digital strategies and technology systems,  it will be at their own peril for the commercial banks not to adopt extensively to mobility and better Customer Experience (CX)  levels achieved by their retail counter parts.

The Digital 360 initiatives of commercial banks comprise of two complementary parts  :

• The Digital Outside influenced by the end customers and its success defined by
  • Higher Profits , Higher Transparency,
  • Lower Exceptions, Lower Transaction Time Windows

• The Digital Inside influenced by the bank users and its success defined by
  • Higher Productivity , Higher Quality,
  • Lower Costs, Lower  Time to Process 

Digital 360 snapshot

A broad outline of the various business & technology initiatives in the commercial banking space and their classification from their digital impact  can be found below :

• The Digital Outside

Customer Experience(CX)   improvement , Multi Channel Integration ( or Omni Channel ), Multi Device Support ( current & futuristic ), Customer 360 integration ( Customer / Relatioships / Accounts ), Transparency Improvement ( Real time information & Analytics Apps ), Exception Management by end customers, Predictive Analytics ( including various forecasting for  account balances, cash flows, receivables, payables  ), Online & Real time Customer On-Boarding & Account Opening, Channel Innovations, Mobility Adoption, Social Media Integration, telemetrics & wearable technology integration(!!!) etc.

• The Digital Inside

Achieving Straight Through Processing (STP) , Process Improvements ( workflows & Business Rule Engines ), SOA adoption( reusable business components ) , Big data and Analytics , Business Intelligence, Enterprise Real time data integration , Unified Customer data model ( Customer 360 ), Centralized Exception management, Centralized Customer On-Boarding, Better Risk Management,  Adoption to ongoing Regulatory Changes, Better MIS & Reports.

In the Digital World ‘Customer is King’ - be it retail or commercial. According to a recent research by  Bain and Company, which surveyed roughly 83,000 consumers in 22 countries -  ‘Banking customers now handle more of their banking interactions, on average, via smartphones and tablets than through any other channel’. A significant  point to ponder is the fact that the users of the commercial systems ( the influencers ) are after all ‘individuals’  who are exposed to higher levels of Customer Experience in their own retail world and social media. Overall the Digital initiatives should take into consideration Better Customer Experience at  the heart of their design .

Banks will have various business and technology initiatives on an going basis and need to allocate scarce resources among competing projects. It will benefit them to reassess those initiatives from a ‘digital 360’ perspective and adopt a ‘smart legacy modernization’ (SLM) approach. This approach will enable them  incrementally make changes as per business priorities  that deliver the end goals  in their respective projects,  while simultaneously move them closer towards  their ‘digital 360’ objectives. It is quite important that these projects are not designed in isolation but involve some oversight from a ‘digital 360’ design team at the enterprise level so that banks don’t have to overhaul  their systems frequently from a digital perspective. Since the  ‘Digital Inside’ and   ‘Digital Outside’ initiatives are often times complimentary, it is imperative that their design principles take the complete  perspective of ‘front to back’  into account at each design phase. Often times, the ‘Digital Outside’ initiatives fail to yield the expected Customer Experience if the ‘Digital Inside’ design is weak ( ‘Garbage in, Garbage out’, disintegrated data etc ) and vice versa.