Taking your bank from good to great: First 5 areas of focus

What can take your bank from good to great? That is the question we have been looking to answer for the last 6 weeks, and so far we have delved into five areas of focus. Our Tour de Transaction Banking is halfway to our finish line and this week I wanted to hop off the bike and recap our route, a midpoint highlight reel if you will.

Stage 1: Real Time Everything - Real-time is certainly a buzzword, and in this posting we discussed how real time payments are just a small piece of what the market is demanding. What we are really talking about is real time access, real time access to alerts, real time access to account information, real time access to market information, as well as real time access to payments of all types (domestic and international). Legacy systems and cost have been our primary points of blame, but to enhance the customer experience and elevate your offerings, real time needs to become more than just a buzzword in your bank; it needs to become a reality. 

Stage 2: PowerPoint is stopping Greatness - The letdown of the “great PowerPoint promises” of payment hubs in the past decade are undeniable. Too many payment hubs have tried to replace the legacy and have come up short. A true hub needs to embrace the legacy. Start by front-ending it and protecting it from the latest technology. Let the hub be the integration layer; don't build point-to-point interfaces. Then you can start to gradually bring the legacy payments capability into the new and do less in the old structure. True greatness comes from understanding and using all the tools available. Embrace the old and utilise the new.

Stage 3: Sticky Corporates and SMEs - It is no secret in the Transaction Banking world that the stickiest relationships are the largest corporates (logically this makes sense as the larger the relationship, the more interaction points you’d likely have). More often than not, there is one segment banks neglect to give “proper” attention to, the small and medium enterprise segment, commonly referred to as the SME. The funny fact is that the SME market represents the biggest revenue opportunity for a bank, but is often the segment that is given a disjointed proposition. The problem is that some banks treat their SME customers as small corporations within their otherwise big-corporate systems. Others provide the SME banking services that are more often considered consumer focused. In both cases, neither quite provides the SME with the most relevant service. The banks that figure this out will be the banks that thrive in the coming years. 

Stage 4: Cloudy with a chance of greatness -Cloud is no fad—it is the past, present and future—and banks need to think about how they can take advantage of it. Running in the cloud means you can have as much or as little processing as you require at any time of the day, saving money and effort, while being faster to market. But there’s more. The true value is that of a shared experience, which enables a bank to benefit from the experiences and input of their peers. Not so that it looks the same to the customer of course (we all want to differentiate), but the general goal is a common one.  The knowledge of the cloud operator is likely to be world class to the point where they should be the global experts on how to run and get the best out of this particular service. 

Stage 5: Don’t just replicate, elevate - Focusing heavily on what you currently offer as opposed to embracing what you could offer is a major detractor for some IT operations. In many IT projects, we hear the first goal is to merely replicate what the bank is currently doing, with no goal of net gains. Much money is wasted in this effort and often times the overrun impacts the banks from reaching their actual goals of bringing to market exciting new functionality. New solutions always have something shiny and cool to offer and we should be looking to leverage as much of this as possible.  ‘As is computing’ is no strategy.  But of course you must also be certain that the new system can deliver on all its promises. Don't buy solutions with the promise of the future without being very, very sure you'll ever get there.  Phase 1 needs to be about what you need to move forward, and what it takes to get new customers, not just replicating what your current system already does. 

I am looking forward to hopping back in the saddle for the continuation of this series. I am hoping you have picked up some useful ideas so far and I would encourage your feedback and thoughts as we continue on this journey. We’ve got you to very good, now let’s get to great.