Ahead of the Sibos 2013 trade show organised by SWIFT in Dubai, UAE, on 16-19 September Sanjay Israni, global head of product development, client access at Standard Chartered Bank discusses the need to develop a more compelling customer-facing banking experience using mobile and business intelligence (BI) systems and a tighter focus on usability and service orientated architectures (SOAs) - all issues he expects to be hot topics at Sibos 2013.
Technology is rapidly changing client interaction with banking partners. Sources of innovation are everywhere, and this is creating enormous opportunities for banks to embrace innovation: by doing so they can differentiate themselves in a crowded and competitive marketplace. Embracing technology could effectively improve the experience of clients and win market share. This article explores the future direction of wholesale banking channels and four areas of innovation that are at the forefront of this change - the mobile, BI, SOAs and usability apps and interfaces; all topics I expect to see discussed at Sibos 2013.
1. Mobile Channel and M-commerce Driving Innovation
The ever-increasing use of mobile devices in our lives is forcing organisations to rethink their interaction with clients and the types of services to offer that can leverage the power of mobile for the benefit of clients. Two components within the mobile landscape have the potential to dramatically improve the user experience - mobile as a channel and mobile at the forefront of commerce (mobile m-commerce).
In the past development of mobile channels has mainly focused on standard product offerings, such as providing transactional and balance information. However, the advent of tablets has created enormous opportunities for banks to start interacting with senior corporate management in organisations via electronic channels, helping treasuries and internal finance departments more than ever before with convenient data sources and reporting tools - not to mention on the move functionality such as trade authorisation apps.
The key is to provide a broad set of relevant banking activities on tablets or sophisticated big smartphones - often called phablets - so that senior management in organisations can make informed decisions while away from the office. Such a view would cut across their entire working capital chain (i.e. investments, trades, borrowings, etc) and provide value-added content such as available investment options; risk v opportunity analysis; regulatory data: rich analytics and targeted research.
The ‘treasurer’s dashboard’ as a concept can bring everything together on a mobile device, providing a portfolio view, and combine this with the aesthetics of a truly interactive user experience. Not only does this offer huge productivity gains for senior managers on the move but it can potentially aid a reduction in risk because better informed decisions can be taken on a timelier basis.
Mobile money leverages the usage of a mobile phone as a channel to conduct commerce. It is driven by:
• The ubiquity of mobile handsets
• Low cost of financial access
• Deep and rapid penetration of mobile into emerging or third-world countries
• Access to the unbanked population in these markets
• The ability for digital money exchange with real-time access to actual funds at end points.
Initial interest has largely been in the peer-to-peer (P2P) space. However, there is now a large push within the treasury, finance and corporate space to tap into mobile money ecosystems to leverage flows across business, P2P consumers and government institutions.
Channels can play a pivotal role in this space. The connectivity, flow of information, user experiences, and ability to leverage the underlying mobile infrastructure all play to the strength of a good banking over-arching banking channel. The key to the success of this ecosystem is broad partnerships among banks, telecoms, intermediaries, electronic e-commerce companies and regulators, thereby creating an inclusive environment for funds to move seamlessly across the virtual and ‘real money’ world.
Figure 1: Mobile Money Market Evolution.
Mobile money ecosystems are mushrooming across the world, led largely by emerging or final frontier markets, but certainly not limited to these markets anymore. A word of caution is warranted given the high risk of undeclared money entering legitimate money flows and the security issues with mobile infrastructure today. However, these challenges can be overcome, if the ecosystem is developed in line with mainstream financial framework and enough flexibility to leverage the power of mobile. The bottom line - mobile is a revolution and none of us can afford to sit on the sidelines of this show.
2. Business Intelligence (BI): Improving Information
Information reporting has been the core offering in electronic channels since the time channels were first introduced. Today, most banks offer a full set of reporting and transactional capabilities.
So why are customers still saying that this is not sufficient information? The problem is that the information provided is a bank’s view of its products and services. Clearly this is not sufficient and clients are asking banks to provide more business intelligence (BI) based on analysis of this data. BI is likely to become a key competitive differentiator in the future and banks should be on top of this technology and able to demonstrate they are at the Sibos 2013 trade in Dubai in a couple of weeks.
Figure 2: The Business Intelligence Ecosystem.
The key elements that can form the basis of the BI ecosystem are:
• A broad-based BI platform that translates data into ‘actionable’ analytics
• A core delivery channel that offers an intuitive and interactive user experience
• A detailed understanding of the customer and industry business processes
• Ability to allow banks and customers to co-mingle data from external environment that influence customers operations
• A secure space where customers can share information between their operating companies and divisions across geographies – effectively a Chinese wall between the bank providing this ecosystem and its client.
Figure 3: The Move from Information Reporting to Business Intelligence Utilisation.
The outcome of a BI ecosystem, at a minimum, would be to:
• Transform reporting into proactive and predictive management of information
• Provide clients with insights into their company’s financial health, including historical data trends
• Enable treasurers to make quality decisions
• Enable treasurers to make timely decisions to manage company risk
• Allow industry comparative with suggestions for improvement and growth.
Implementation of BI principles can significantly reward banks and their customers. It can help companies manage their working capital efficiently and help in expansion beyond their existing geographies based on visibility over business activity, supplier networks and industry knowledge of geographies. All this can help to further strengthen the connection between a customer and its banking partner for a longer and more sustainable relationship.
3. Usability: Wholesale Banks Should Learn from Retail Banks
Usability means the ease-of-use and ‘learn-ability’ of a human-made IT object. The object of use can be a software application, website, book, machine, process, or anything a human interacts with and it is vital to get it right.
The rise of rich web and mobile experiences from the likes of Apple, Google, Facebook and other retail and social media sites has created a revolution in the consumer space. A fair amount of the success can be attributed to innovation in user experiences in this space, the other key factor being content.
Retail banking has followed suit, seeing the value in having consumers interact on their retail banking websites. Wholesale banking channels, with the exception of trading platforms, have generally lagged behind their retail counterparts and the consumer industry but they are learning. The lack of innovation in the wholesale and treasury, finance and corporate space up until now has largely been justified by suggestions that:
• Corporate products and services exposed to end users are too complex
• Corporates are only interested in using channels to execute their transactions
• Usage of channels by senior managers in organisations is limited.
Figure 4: Elements of Usability.
While it is reasonable to say that corporate banking channels are complex, it is not reasonable to conclude that usability is not important for this space. In fact, we believe, usability has greater relevance to wholesale banking. Deploying effective customer-facing tools and technology will help deliver usability, so expect to see this discussed at Sibos 2013 in Dubai during mid-September.
Figure 5: The User Experience Pyramid.
The key to usability is the philosophy of optimising products, services and workflow designs to the user’s needs, rather than forcing the users to change their behaviour to accommodate banking products and services. Figure 5 illustrates the concept of increased user satisfaction as one goes up the value chain of the ‘User Experience Pyramid’. Getting to the top of this pyramid is not easy and can only be achieved if there is a will in the organisation to entrench the ultimate philosophy of usability; creating an emotional attachment between the user and the application.
4. The Right Channels Architecture is Essential: Consider an SOA
In today’s digitised world a strong foundation for channels architecture is a core prerequisite to leverage the true power of electronic channels. An adaptable, flexible infrastructure is essential and adopting a service orientated architecture (SOA) could help.
– Service-oriented architecture (SOA): is the key to this foundation. SOA is not an out-of-the-box technology; instead it is a methodology that enables existing technologies to be quickly configured and reused to meet the changing needs of clients. Channel-specific SOA is defined as a functional, decoupled IT architecture that is fit for purpose, easily scalable and allows channels to remain lightweight by moving core processing downstream.
Key components within this SOA architecture include:
– An Intelligent Channels Service Bus: a highway where various channel end-points can send and receive data from downstream systems in a seamless manner.
– A Common Service layer: Each service is the smallest common set of data exposed to clients. This layer offers opportunity to quickly introduce new products to clients and facilitate exchange of data with downstream systems to create a seamless upstream interaction.
– A rich user experience layer: offering clients a highly intuitive and personalised online experience. The combination of the service layer and rich user experience is often bundled as the ‘Web 2.0’ experience.
So why is focus on architecture important? The banking landscape is littered with fragmented legacy applications; that is why and an SOA can help. Cost pressures have not allowed banks to upgrade much of this landscape. Channels, on the other hand, are confronted with a major shift by end users towards digitisation, the mobile revolution, and the increasing need for intelligent information. Legacy problems can be overcome through architectural discipline, giving organisations the opportunity to innovate.
Innovation thrives in an organisation based on the collective will of its leadership and the few that take up the challenge to innovate. At a time where product offerings across major banks are largely commoditised we at Standard Chartered see innovation in wholesale banking channels as the key differentiator that will allow a bank to stand out among its competitors.
What could be achieved if we were able to capitalise on these innovations? Beyond 2015, we see the future of client experience on wholesale banking channels moving towards a trusted environment into which customers want to come, share their views and co-create. This environment would:
• Be device agnostic: offering a consistent experience across all touch points
• Mobility will be a core driver for future engagement with middle and senior management in organisations
• Offer a complete set of active and passive personalisation, and business intelligence tools to enrich client experience
• Broaden the ecosystem, creating a unique bridge between business and consumers
• Dramatically increase customer satisfaction and become a key pillar for future client interaction
When an organisation embraces the spirit of innovation, it is a win-win situation for all. There are many pitfalls on the path to innovation and it is at these points that a strong leadership which encourages innovation comes into its own. This is not about giving people authority to do something; it’s about creating an environment where they just do it naturally. Imbedding an innovation culture within an organisation allows people to generate new ideas and take those ideas to a successful outcome. Embracing these ideas and having the perseverance to see them through is what will drive the next generation of wholesale banking electronic channels in the years to come.