By Dave Smith - Consultant, Lusis Payments
It was John Gage of Sun Microsystems who coined the phrase, “the Network is the Computer” - way back in 1984. Understandably, this phrase was originally more of a vision than the reality. However, the ensuing 38 years of computing development has generated incredible progress. With the advent of Cloud computing we now live in a world where on-demand computing infrastructure can be readily purchased and deployed within any geographic region.
Surely we can agree that the computer industry has fully delivered Gage’s historic vision.
However, putting aside the numerous technical achievements we also need to consider the functionality of the software itself. A recent banking experience provided a sobering reality check and several points to ponder.
My “customer journey” started when I needed to update the registered address on my business account. This was accomplished easily enough using the online banking facilities. The real challenges started when I tried to change the address on the associated credit card. I had naively assumed that this could also be done online - given that both my business account and credit card were issued by the same bank.
After a lengthy wait in the phone queue, the support agent for the credit card team informed me that the address change for account had not updated on her system yet. Furthermore, it could take up to 3 business days to complete. Additionally, it wasn’t clear whether I would automatically receive a notification message once the credit card address was changed. What!?
So much for the “seamless customer journey” ideas that I hear being preached at banking conferences.
Today, banks are rightly giving significant attention to their “Cloud Strategy”, whether it be in the planning stages or early implementations. The recent acquisition of Cloud payments specialist, Renovite, by JPMC demonstrates the importance some banks are assigning their Cloud strategies.
In my view, a cloud strategy should not become overly distracted by the technology itself. The staggering levels of investment being injected by Microsoft, Google, Amazon, and others, will ensure that the Cloud will consistently become better and better.
The real question that banks need to ask themselves concerning their Cloud Strategy is what software investments are required to improve operational efficiencies, streamline the customers’ journeys, and increase competitive agility.
Simply shifting the same tired, poorly integrated ‘software blobs’ into the cloud may save a few bucks. It might even win the CIO some Brownie points. But it will do very little to Transform their business.
Hopefully, it is the Transformative potential of the Cloud that will guide the banks’ strategies beyond the short term cost gains.
Contact Lusis Payments when developing your Cloud strategy for solutions that improve your organization's operational efficiencies and improve customer experiences.
by David Smith
As a long serving practitioner in the ATM Industry I have witnessed several policy decisions that really intrigued me. For example, some banks take the stance that their in-branch automation is solely for their own customers. Others, take a more inclusive approach allowing non-bank consumers to use their facilities alongside their own clients. I have certainly experienced both sides of this question in different parts of the world.
As a fan of consumer-centric businesses, I favor the latter approach, although I understand the rationale of the “my customers only” principles. However, the policy thinking around “who will you serve?” becomes further convoluted when you recognize that many banks run promotions to attract new customers, offering money to new customers as a signing-up reward. Sometimes these incentive payments can reach £100 or more.
Surely, allowing non-bank consumers to use your branch automated services can be a powerful recruitment aid. I mean, you know exactly where they are at that point in time, what they are doing, and you have staff on hand to help and advise them appropriately.
Surely this is a good thing, right?
Once you truly embrace every consumer interaction as an opportunity to learn something new, to deepen the relationship, then you fundamentally change the possibilities for growth.
Traditionally, banking automation was mechanically sophisticated but depended on proprietary vendor software to work. Consequently, banks often faced substantial costs for even simple customizations, particularly if they had a mixture of hardware from different vendors. Under these circumstances it was difficult to personalize the consumer’s experience, or to differentiate yourself from your competitors in a meaningful way. An investment in vendor-independent ATM software ensures true portability across any self-service device, thereby reducing costs and creating a greater choice in hardware.
Happily, this restrictive situation has changed significantly with the growing market trust in vendor-independent, multi-vendor, ATM software. Additionally, the ATMIA’s new blueprint architecture clearly separates the task of terminal management from the payments switch, and embraces the versatile ISO 20022 messaging standard instead of the proprietary and more restrictive NDC protocol. These changes eliminate two of the greatest blockers to service flexibility.
Banks now enjoy ready access to affordable self-service technologies, freeing them to create any branch experience they want. The next leap forward in ATM channel excellence is the application of relevant, real-time consumer information in a way that benefits both the consumer and the bank. Specifically, this step involves the deployment of workflow orchestration and machine learning-based recommendation engines.
So, how might a bank leverage workflow and recommendation engine technologies to improve their in-branch experience for both their own, and the non-bank, consumers?
Traditionally, an ATM would collect the card and PIN information before sending any information to the switch. This is all ‘dead-time’ during which the bank has no information about the consumer to act on. In a more consumer-centric approach, the ATM sends the card information to the switch as soon as it is entered. The switch replies with relevant consumer information that can be used to personalize the services offered. In addition, advisory information can be sent to a branch agent’s device notifying them about the consumer, the machine they are using, and what should be done.
Furthering this illustrative scenario, the recommendation engine might determine that a non-bank consumer qualifies for an account sign-up special offer or other guest services based on the number of previous visits, the time of day, transactions performed, etc. Special offer vouchers could be dispensed via the receipt printer for redemption with a branch agent. Simple guest services could include the waiving of the acquiring fees in return for phone number information or other contact details.
Numerous other relationship-building options can be easily and affordably implemented with today’s technology. The biggest obstacle to the creation of consumer-centric ATM channels used to be the infrastructure but this is no longer true. A much larger obstacle, in my opinion, is the legacy mindset among senior stakeholders that rejects the ATM channel as a vehicle for innovation and richer consumer services.
The financial pressures causing banks to close branches on a large scale are highly unlikely to subside any time soon. This situation is further aggravated by regulatory pressures on banks to provide third party access to consumer data – thereby inviting new competition for financial services. Now, more than ever, banks need to focus more about personalizing the consumer experiences they create as a means to strengthen brand loyalty and growth.
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