Turning Banking
Technology Trends into
Meaningful Solutions
Introduction
Technology is changing the way customers interact with their bank,
impacting deposit services, lending and payments. The most significant
technology trends in banking today encompass the areas of:
Compliance
and Risk
Management
Data
Analytics
Digital
Solutions
Omnichannel
Banking
Lending
Innovation
This eBook describes the implications of these five trends and offers a framework for
successfully leveraging new technology to create high-impact business solutions.
1
PROLIFERATION OF
DIGITAL SOLUTIONS
Innovation in digital technologies dramatically changes the way customers
interact with their financial institutions.
Mobile technology has transformed consumers’ lives. A smart mobile device
provides much more than phone calls, serving as:
• The primary tool for capturing (and sharing) memories: camera and video.
• A global positioning device.
• A map to anywhere.
• Access to e-mail and calendar systems.
• A means to surf the Internet.
• Storage for passwords and other personal data.
Mobile banking services are growing rapidly to include functionality such as
checking balances, paying bills, transferring funds, locating ATMs and branches,
and remote deposit capture.
Camera
Multi Touch
Cell Tower
Signal
Storage
Ambient Light
Sensors
Wireless
Network
Bluetooth
Compass
GPS
Microphone
Gyroscope
Accelerometer
Mobile is transforming how consumers do EVERYTHING,
including how they bank, pay, research and spend.
2
THE RISE OF
OMNICHANNEL BANKING
When contacting a call center, customers have begun to expect the bank’s agent
will already know who they are and what the inquiry is about. If a transaction
started online and the caller needs further assistance, any other channel should
pick up on the transaction without any repetition from the customer.
Banking customers expect to interact with their institution through more than
one channel. In the omnichannel environment, the bank’s channels communicate
activity instantly. The graphic on the next page depicts this industry transition in
which customer transactions integrate seamlessly between banking channels.
The key is to provide self-service tools to the customer for activities best
conducted directly online and to provide more advisory services such as
planning to save for a college education, with a personal touch. Any transaction
or customer interaction should become seamless between digital and personal
channels.
Transitioning to Omnichannel Banking
Orchestrated
Referrals and
Opportunities
Data Analytics &
Reporting
Seamless Orchestration
of Customer Interactions
My Bank, My Financial
Needs, My Network
ATM/Kiosk
Digital/Online
Contact Centers
Customer
Branch/Stores
Customer
ATM/Kiosk
Customer
Digital/Online
OMNICHANNEL
Contact Centers
ALL-CHANNEL
Branch/Stores
MULTI-CHANNEL
My Smartphone
My Computer
My Branch/Store
My Kiosk
My Personal Profile &
Preference
3
THE IMPACT OF
DATA ANALYTICS
“There is also huge opportunity
for banks with predictive
analytics,” states Sirpa
Nordlund, Executive Director,
Mobey Forum. “From now on,
it’s all about the data. With
predictive analytics, banks and
credit unions can not only
generate a 360 degree view of
their customers’ financial
behavior, they can anticipate
their needs and create highly
personalized services that
surprise and delight them too.” 1
Data analytics plays and
increasingly important role in a
financial institution’s decision
making. Predictive analytics will
help guide tactics and set
strategies for savvy bank
executives.
1. Jim Marous, “Predictive Analytics: Think Big, Start Small …
Just Start Now”, The Financial Brand, July 2016
Predictive Analytics Lifecycle
Skills
Tooling
Analysis &
Modeling
Acceptance
Collection &
Ownership
Governance
Sanity
Checks
Data
Management
Quality
Customer’s
Perception
Deployment
and Fulfillment
Frictionless
Services
Technology
Creating a data-driven organization
Source: Mobey Forum, VODW, 2016 © June 2016 The Financial Brand
4
THE IMPORTANCE OF
LENDING SOLUTIONS
Lending via mobile devices, with one-to-one target marketing based on data
analytics, can predict quality candidates for online loans. Additionally, as
peer-to-peer lending continues to grow, it has the potential to become a threat to
traditional banks. Banks have partnered with mobile lending providers to offer
consumer loan origination from the convenience of a smartphone, shown in the
diagram on the next page.
Many small and mid-sized banks are also moving to outsource lending functions
that a trusted outsourcing partner can do better, faster, less expensively or even
more safely. In the traditional lending area, outsourcing the various functions has
become attractive to institutions looking to reduce overhead in consumer and
commercial lending operations. All aspects of lending are candidates for flexible,
cost-effective outsourcing solutions, including:
• Loan origination systems
• Imaging systems
• Workflow management systems
• Collections
Example of Lending via Mobile Device
• Don’t wait for
consumers to come
to you.
• Use your knowledge
and your data to
better serve their
financial needs.
• Personalized, preapproved rate sheet,
granting consumers
perpetual insight into
their personal credit
worthiness and
buying power.
• Preapproved funds
are just a click or a
tap away.
5
TAKING RISK MANAGEMENT AND
INFORMATION SECURITY INTO ACCOUNT
A recent CIO Survey from Aite suggests staying
current with banking regulations and fraud risk
weighs heavily on the minds of financial services
technology executives. They need to realize strong
information security requires:
• Very specific expertise
• Continuous training and retraining
• Complex tools
• Expensive infrastructure
• Management rigor
More and more investment is being made in
technologies that provide safer systems to protect
data. With the expansion of access points to a bank’s
customer data, managing entitlement growth should
be considered for every device and user. Banks must
evaluate security and risk management tools, and
entitlements, making it an integral component of any
technology deployed going forward.
What is keeping large bank
CIOs awake at night?
• “Keeping pace with
technology while
maintaining regulatory
compliance.”
• “Staying current with
banking regulations”
• “Fraud risk.”
• “The speed at which we
need to change and the
amount of change
needed to stay
competitive.”
Source: Aite Group’s 2014 Global CIO Survey
The typical approach for implementing new technology
at banks involves working through an evaluation
process that defines and budgets for new system
deployments. High-level requirements should be scoped
at this point in the deployment process. After that effort,
the solution moves into an implementation phase.
Often, between these two steps, an information gaps
develops. As a result, technology implementation
occurs without meeting expectations while costs run
wild. The typical approach creates a gap in the
deployment process.
Typical Approach Creates a Gap
Evaluation Process
(Expectations and
Requests)
Implementation
(Expectations
Misinterpreted)
Post Implementation
(Expectations and
Requests)
High-level Scope
Budget
Deadline
Functionality
Multiple Visions,
Multiple Approaches
Team Set Own
Direction and Define
Own Role
Teams Only Know
Final Deadline
Scope Control Issues
Integration Testing
Scope Unclear
Cost Overruns
Deadlines Missed
Functionality Missed
Scope and Vision
Different
?
The solution definition process depicted below closes the gap between sales and implementation steps,
seeks to identify true business requirements and defines the exact parameters of the implementation,
ensuring that all participants in the deployment are on the same page.
Definition Approach Fills the Gap
Evaluation Process
(Expectations and
Requests)
Budget
Deadline
Functionality
Definition
(Expectations Validated
and Set)
Implementation
(Expectations Clear)
Defined Scope and
Requirements
One Vision,
One Approach
Defined Approach
and Effort
Each Team Has
Clear Direction and
Understands Role
Refined Budget, if
needed
Clear Deliverable
Timelines
Refined Deadline, if
needed
Clear Scope Control
Refined Functionality,
if needed
Clear Integration
Testing Scope
Post Implementation
(Expectations Met!)
Within Costs
Deadlines Achieved
Functionality
Achieved
Any new technology deployed in banks must rely on well-defined scope and business requirements in
order to deliver intended benefits. A common, well-constructed set of business requirements results in
on-time and on-budget technology implementations.
Summary
Customers will interact far more frequently with their bank, albeit less
in person and mostly via digital channels. Financial institutions will
also utilize data and sophisticated real-time analytics to identify, target
and service customers while mitigating risk and devoting resources to
information security. Banks deploying increasingly complex
technology solutions must rely on comprehensive business
requirements and a solid solution design in order to gain benefit from
new technology deployments. A process that identifies requirements
leads to a thorough design that ensures that a financial institution will
leverage new technology trends instead of reacting to them. The
benefits of this comprehensive approach provides banks with greater
efficiency and speedier customer service through
increased automation.
©2016 FIS and/or its subsidiaries. All Rights Reserved. FIS confidential and proprietary information.