December and January are popular times for “trends” and “outlook” articles and posts for the year ahead. What do industry experts expect to occur in financial services or technology for 2018? I enjoy reading these pieces. They’re usually in list format, ‘Top 10 Trends’ or ‘Top 5 Top-of-Mind Issues’, and I enjoy the relatively easy read of a list. The articles – especially those that are technology-focused – always carry an optimistic tone. “Look at all of the cool stuff we’re all going to do this year!” The problem is that I’ve never thought them to be practically useful. Financial institutions and the technology vendors serving them have planned for projects for the coming year well ahead of December. These “year ahead” pieces are teetering on becoming completely obsolete.
In this time of unprecedented pace of technology change, driven by consumer expectations (or is it the other way around?), the strategic focus has extended further out. The fast-approaching future leaves financial institution’s asking what they’ll need to do in order to be competitive 3, 5, 10 years from now. The key is not how processes and systems can support today’s business goals, but how they’ll prepare the organization to meet the goals of an uncertain future. They need to be “future-ready.”
What are “future-ready” systems? Well, from the perspective of a technology provider of origination and account servicing solutions, the answer to this question should be derived from a determination of what will be required for a financial institution to be competitive moving forward. Our conversations with customers and prospects have identified four key areas:
- Promote a first-class consumer/account holder experience
- Drive efficiency and scale for the financial institution
- Promote compliant and secure practices
- Provide the flexibility and agility for the financial institution to respond to changing market needs and consumer expectations
From these four areas of focus for financial institutions, let’s discuss three tenets of a “future-ready” solution.
The first tenet is an easy and intuitive user experience. Ease-of-use cannot be restricted only to consumer-facing channels. Financial institution staff, whether front-office or back-office, should be supported with systems that can be mobilized and personalized moving forward. Most obviously is a case of front-line originators. Having mobile, intuitive, and guided loan or account application solutions will allow them to work in any variety of environments, and more importantly, allow them to focus on sales and service rather than detailed application taking. Looking ahead further, we need to be prepared to respond to member-engagement opportunities or demands of an evolving workforce. Roles such as debt collectors or loan processors, typically tethered to desks or cubicle farms, could see increased productivity and efficiency through mobile-friendly and personalized workspaces.
Of course, optimized digital engagement with consumers or account holders will continue to be of paramount importance. The system needs to allow the financial institution to implement and continuously improve a streamlined, efficient, consistent and personalized experience for its consumers and account holders. Wise organizations will recognize the distinction between the consumer digital experience and the consumer journey. Interactions with our financial institutions are increasingly digital and mobile, so the accessibility, look and feel and ease of use of the digital ‘front-end’ is important. However, efficiently leveraging data and integration amongst systems, streamlining and automating workflow and decisioning and driving out manual and paper-based processes and tasks, will empower a bank or credit union to optimize the journey. This brings us to…
The second tenet which is utilization of intelligent automation to drive productivity and efficiency. Consumer expectations of immediacy, and financial institution’s need to do more with less, will render obsolete processes and systems anchored by paper-based and manual tasks. System supported orchestrated automation will be the cornerstone for trimming time and cost from processes. This is true today. Looking ahead, intelligent automation will be the cornerstone to transformational initiatives at financial institutions.
Financial Institution’s will continue to become more effective in converting the abundance of available data into actionable insights into its account holders and market. Whether the development of advanced queuing strategies to personalize debt collection activities or sophisticated, nuanced credit decisioning rules to optimize loan originations, meaningful, practical application of analytics efforts will be a must for financial institutions in the future. So, a future-ready system must not only automate – it must support rules-based, intelligent automation. That automation must be data-driven and highly configurable, which then brings us to…
The third tenet which is, providing the flexibility and openness required to meet continuously-evolving business needs. Over the past few years, the largest banks and financial institutions have made notable moves in embracing open platforms and collaboration with FinTech companies. In other news, a recent JD Power survey the largest banking organizations improved in overall customer satisfaction, while midsize banks declined. The increase for the big banks was attributed primarily to improved mobile and online satisfaction. These two pieces of news are not coincidental. The largest financial institution’s realized at the time their future success required a level of agility beyond their means. All other financial institution’s, regardless of current size, should take note. Future-ready systems will leverage open API’s to improve information flow and service sharing between systems.
As I conclude here, I realize I’ve just written one of those very “outlook” pieces I somewhat criticized to being with. (It even contains a few lists!) Well, maybe they can be useful… as long as we re-calibrate the timeframe. The future is approaching at unprecedented speed. Make sure you’re prepared with processes, systems, and an outlook that is “future-ready”.