Turning Banking

Technology Trends into

Meaningful Solutions

IntroductionTechnology 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:

This eBook describes the implications of these five trends and offers a framework for

successfully leveraging new technology to create high-impact business solutions.

Digital

Solutions

Omnichannel

Banking

Data

Analytics

Lending

Innovation

Compliance

and Risk

Management

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.

PROLIFERATION OFDIGITAL SOLUTIONS1

Mobile is transforming how consumers do EVERYTHING,

including how they bank, pay, research and spend.

Camera Storage

Multi TouchAmbient Light

Sensors

Cell Tower

Signal

Wireless

Network

Bluetooth Compass

GPS Microphone

Gyroscope Accelerometer

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.

THE RISE OFOMNICHANNEL BANKING2

MULTI-CHANNEL

Customer

Bra

nch/S

tore

s

Conta

ct

Cente

rs

Dig

ital/O

nlin

e

AT

M/K

iosk

ALL-CHANNEL

Customer

Bra

nch/S

tore

s

Conta

ct

Cente

rs

Dig

ital/O

nlin

e

AT

M/K

iosk

Orchestrated

Referrals and

Opportunities

Data Analytics &

Reporting

OMNICHANNEL

Customer

Seamless Orchestration

of Customer Interactions

My B

ank, M

y F

inancia

l

Needs,

My N

etw

ork

My Personal Profile &

Preference

My Kiosk

My Branch/Store

My Computer

My Smartphone

Transitioning to Omnichannel Banking

THE IMPACT OFDATA ANALYTICS3

“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.

Predictive Analytics Lifecycle

Analysis &

Modeling

Skills

Data

Management

Deployment

and Fulfillment

Tooling

Acceptance

Governance

Quality

Collection &

Ownership

Frictionless

Services

Sanity

ChecksCustomer’s

Perception

Technology

Creating a data-driven organization

Source: Mobey Forum, VODW, 2016 © June 2016 The Financial Brand1. Jim Marous, “Predictive Analytics: Think Big, Start Small …

Just Start Now”, The Financial Brand, July 2016

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

THE IMPORTANCE OFLENDING SOLUTIONS4

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, pre-

approved rate sheet,

granting consumers

perpetual insight into

their personal credit

worthiness and

buying power.

• Preapproved funds

are just a click or a

tap away.

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.

TAKING RISK MANAGEMENT AND INFORMATION SECURITY INTO ACCOUNT5

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

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

Implementation

(Expectations

Misinterpreted)

Post Implementation

(Expectations and

Requests)

Evaluation Process

(Expectations and

Requests)

Definition Approach Fills the Gap

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.

Budget

Deadline

Functionality

Defined Scope and

Requirements

Defined Approach

and Effort

Refined Budget, if

needed

Refined Deadline, if

needed

Refined Functionality,

if needed

One Vision,

One Approach

Each Team Has

Clear Direction and

Understands Role

Clear Deliverable

Timelines

Clear Scope Control

Clear Integration

Testing Scope

Within Costs

Deadlines Achieved

Functionality

Achieved

Implementation

(Expectations Clear)

Post Implementation

(Expectations Met!)

Evaluation Process

(Expectations and

Requests)

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.

Definition

(Expectations Validated

and Set)

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.

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