By Kunle Awosika
Imagine a world where you could predict when your customers will have their first thought about retirement planning and be ready to help them create that plan in minutes. Imagine you could do the same for a young family applying for their mortgage or a fledgling company deciding where to bank for the first time. Now imagine you can address all these customers’ needs simultaneously wherever they are, anytime, on any device – and without any rising costs.
For many financial institutions, this world might seem far away, but it isn’t. As William Gibson famously said, “The future is here, it’s just not evenly distributed.” Some financial institutions are already ahead in providing flexible, personalised banking services to their customers. Standard Chartered is the latest bank to replace PIN numbers and passwords with biometric authentication, allowing five million global customers to check balances and access investments securely via mobile devices. The move benefits customers who can more easily access services without having to remember complex passwords, while also helping to reduce the risk of fraud for the bank.
Without a doubt, technology is changing the industry fast. The only thing changing faster is customer expectations. To stay competitive, banks are turning to new technologies such as machine learning and data analytics, which are enabling them to offer customers highly personalised, tailored and customised products and services that have been adapted to the current economic situation. The changing financial industry landscape will increasingly allow for ‘manufacturers’ and ‘distributors’ of financial services, which will enable unprecedented combinations of products and increase the need for intelligent systems to guide and simplify choices.
In Geneva, more than 8,000 senior business leaders from global financial institutions attended Sibos, the premier financial services business forum that shapes the future of the industry. Microsoft showcased how banks can re-imagine the customer experience for a digital world, empower bank employees with more effective and collaborative digital tools, optimize operations through improved insight into risk and operational models, and transform products with open, connected systems and highly-automated digital processes.
Re-imaging the customer experience for a digital world
Consumers are increasingly looking for a seamless, omni-channel, and personalised level of service, and financial institutions are working hard to re-imagine the client experience for a digital world, to deliver more value through insights and relevant offers that data-driven technologies can provide.
The Dutch online bank Knabis giving its customers control of their finances in a clear and simple way. Knab’s systems present all of a customer’s financial information in one dashboard – even if this information is held with another bank. This doesn’t just include transactional information from bank accounts; it also covers mortgages, assets, liabilities and other relevant data. The result: customers get a much clearer view of their overall financial situation, and Knab is able to position itself as a trusted advisor that relies on digital as a competitive advantage.
Knab knows that a customer-centric approach keeps people happy and most importantly, loyal. Banks already have a great deal of data on their customers including how they shop, save, and access financial services. The challenge is knowing what to do with that data. Customer relationship and analytics technologies like Microsoft Dynamics and Cortana Intelligence Suite allow banks to mine actionable insights from the data they already have, in a way that respects privacy and compliance, and provide new services, like the Knab dashboard, that win and retain customers. Today’s technologies are setting banks up better than ever before to be able to innovate and create new business models within their existing structures that adapt and make better use of their main competitive advantage—customer insight.
Empower your employees
A great customer experience starts with motivated, productive and truly empowered employees. The way employees collaborate with one another and their customers is changing rapidly, and banks must create workplaces of the future that embrace digital innovation and give their employees the tools they need to excel.
The key to this vision is enabling employees to have a 360-degree view of the customer, from which they can anticipate customer needs and collaborate more effectively with colleagues, regardless of location. Tools such as Office 365 and Microsoft Dynamics CRM make it easy for peer groups to collaborate, sharing information, ideas, and feedback in real time. In the banking industry, this provides significant benefits when resolving complex client inquiries, for example. Employees can also identify new clients with dashboards that make complex data more easily understood, and quickly connect with the right internal experts to help them define the right approach.
Banca March, a Spanish private bank with a workforce spread between Spain, the UK and Luxembourg combines insight with collaboration and productivity using Microsoft Dynamics CRM and Surface to transform their customers’ experience. Regardless of whether their employees are interacting with customers remotely or in the same room, they now have access to all their financial details at their fingertips.This 360-customer view includes customer contracts, contacts, submitted proposals, and requests for information, as well as analytical tools that employees can use to predict additional services customers may require in the future.Since Banca March implemented the solution, 25 per cent of time spent on administrative tasks has been alleviated. This means that employees are now able to spend more time improving the quality of customer service, with Microsoft Dynamics as the cornerstone of their commercial operations.
A data-driven business
Data is key to the transformation of financial services. The amount of structured and unstructured data that financial institutions need to analyse has grown—and will continue to grow—exponentially. It is also an exceptional time for the industry, with unforeseen risk and extremely high regulatory scrutiny. Indeed, regulatory compliance is having a profound effect on the business models of financial institutions. Insight into risk management and regulatory compliance is central and strategic to the industry.Financial institutions that best manage and monetize data will be on a path to stronger risk management and improved operational efficiency.
For many financial institutions, achieving compliance with the new regulatory requirements means investing millions of euros in additional compute power and datacenter space. Mitsubishi UFJ Securities International, a member of MUFG, a global financial group, decided to go about it a little differently. Putting innovation in action, the securities business decided to move its on-premises, high-performance computing (HPC) grids to Microsoft Azure. Instead of buying several hundred more servers, the firm uses the deployment, administration, job scheduling, and monitoring tools in Microsoft High Performance Computing Pack to offload its daily risk calculations to Azure. The power of the cloud gives MUFG’s securities business the agility and infinite scalability it needs to support its risk computations and regulatory compliance, at a significantly lower cost.
Today’s economy isn’t just about goods and services. It’s about sharing information, and making transactions move at the speed of the internet. FinTech ventures are already revolutionising how the financial services market operates, with Mondo becoming the latest digital bank to gain a licence in Europe. And it’s clear that disruptive technologies like blockchain also have the potential to revolutionise how businesses and people transact with each other.
Regulatory compliance will always remain key to the success of these disruptive technologies. In 2014, Microsoft Azure became the first major cloud provider to meet both the rigorous EU privacy requirements for international transfer of customer data, and the world’s first international standard for cloud privacy (ISO 27018). Microsoft then launched a Blockchain as a Service offering in 2015, enabling Azure customers to adopt blockchain in as little as 20 minutes.
If banks want to remain relevant and successfully drive for growth in this digital world, they must innovate inthe way they engage with customers, collaborate with colleagues and operate.Embracing new technologies will enable banks to disrupt their own business models by turning data into insight, transforming ideas into action, and creating opportunities by embracing change.
(Kunle Awosika is Microsoft Kenya’s Country Manager).