Consumers in today’s digital economy demand omni-channel service delivery and successful financial service institutions are working to extend their value propositions across all customer channels. From online services to new mobile offerings, organisations must not only meet their customers when and where they are but consistently exceed their expectations with a satisfying and delightful experience.
But this is 1o1 Digital Business! And actually the only question is how to do this at a low cost to income ratio?
A simple way to leverage existing services (then improving your Return on Assets) is to have your existing services being distributed by partners. For one good example of such a practice, we can look to insurance. Insurance brokers don’t sell cars; they sell auto insurance policies. By partnering with car dealerships when a customer buys a car, they are able to offer a best-fit policy at the most optimal time for the customer. As evidenced by the insurance example common to many people’s car buying experience, leveraging partnerships to meet customers when and where they are is a win-win.
This is a great start in leveraging Digital technology such as API Management towards improving your cost to income ratio. However, is this enough in your strategy to develop higher value proposition to your customers? Is this improving your customer experience? Not really…
Direct Service Delivery
Direct service delivery means expanding the value proposition beyond the current products and services financial services are used to push to their customers. This is done by choosing services outside the traditional scope of financial services, combining them with your own offerings and providing them directly to your customer. This can be a distinct, value-add for your customers and, as I’ve previously written about, best accomplished with an API first strategy.
Agility is Key
To effectively extend your ecosystem and deliver indirect service via your partners, agility is key. To start, the idea should be smart, secure and the process painless for the customer to see value. Then, time to market must be quick and costs need to be kept low for the business to really benefit. Secure and managed APIs that link existing services with external offerings together are the key to creating digital banking mashups that deliver customer-valued services.
Agility is provided by a Digital platform that enables banks and other financial institutions to extend services when, where and how they are most needed. The key to true success however is aligning your offerings with likely customer life situations. Innovating alongside your customer can be done most effectively by delivering services both directly and indirectly.
In Europe, the PSD2 makes this more possible for banks than ever before. With the recent adoption of the revised Payment Service Directive (PSD2), banks have to be no longer an island. Other organisations will have access to customer accounts. But beyond being compliant, this regulation provides a unique opportunity to the financial services industry: it opens the door to collaboration across industries to standardise a good portion of the way organisation interact with each other. Actually it provides agility as this part is defined at the Industry level, freeing your time to craft new added value services taking into account this new ability that the regulation will provide.
And it shows already: payment initiation services providers will no more have to go with screen scraping, at the risk of the end customer, same thing with Personal Finance Management service providers who will be able very simply and securely to access your personal accounts. A very recent example is a famous Insurance company who announced (on June 9th) a new PFM offer based on aggregating bank accounts which extend their offer to the end customers…
Then once you are able to set up a platform that closes the gap between your existing services and the external services (in the cloud or with partners), combine them and provide the resulting services to your end customers through with an omni-channel approach, your partner ecosystem leveraged services are limited only by your own creativity!
By Bruno Cambounet, Vice President of Financial Services, Axway.