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In today’s unpredictable environment, IT investment can be your secret weapon.
With financial services (FS) spending more on IT as a percentage of revenue than all other business sectors, IT investment can be a strategic enabler for the digital, personalized, user-friendly, and experiential banking, highly demanded by the consumer looking for superior last-mile customer experience (CX).
As data, technology, and compliance complexity grow, it is encouraging to see banks seizing the opportunity to transform their business models – and remain relevant – within a post-pandemic economy and amid escalating customer expectations. However, layering new models on top of legacy infrastructure creates complicated and interlocked processes that are difficult to automate. Have you heard about the spaghetti IT syndrome?
Though front-end, customer-facing systems have been an IT modernization priority, RoI, in terms of improved CX, has been somewhat lackluster. In fact, half of bank customers surveyed as part of the World FinTech Report 2020 said their primary firm does not offer an integrated experience, which makes it impossible to access all their accounts from a single platform. In short, customers say bank services are not up to speed with the WOW factor they have come to expect from non-traditional players.
So, why aren’t banks’ CX improvement efforts paying off? The answer might be in the bare-bones attention firms have given to their middle and back-office operations. These ignored, behind-the-scenes processes are chilling the positive impact of front-end investments.
Legacy systems, paper-based documentation, and cumbersome manual processes clog the digital ecosystems that banks are diligently creating. Banks may support 300 to 800 middle and back-office processes, many of which are complex and span different siloed business units, slowing down the entire IT system.
When back-office operations don’t align with front-end functions, mobile apps or website interfaces must assume sole responsibility for driving customer experience. The reality is that superior CX depends on an end-to-end value chain and interconnected platforms. This includes everything from well-timed customer engagement and convenient onboarding (in the branch, online or via mobile phone) to no-surprises middle and back-office operations such as eKYC, digital contracts and signatures, as well as loan or credit approval, and underwriting.
Front-office operations are the tip of the customer experience iceberg
Collaboration by design offers a path to transformation
Undoubtedly, the alignment of the middle and back-offices with the front end can be an arduous journey. Although legacy infrastructure upgrades or overhaul are necessary, phased implementation can be a prudent approach for banks concerned about business continuity. Sure, transformative initiatives can be handled in-house – yet another addition to the long laundry list of ongoing IT updates. Or, banks can collaborate with FinTechs that specialize in the design of agile, user-friendly technology and modern, open, and evolutive platforms.
Collaboration by design is an efficient, three-step approach to upgrading high-impact middle and back-end operations.
Transformation through collaboration with mature FinTechs (scaleups) can boost bank productivity and reduce time to market. Relationships between FinTechs and banks were once competitive, but time and today’s new normal now make them a synergistic imperative. FS players can no longer go it alone. To ensure survival and maintain profits during the unpredictable times ahead, partnership is the golden ticket.
Questions, comments? Reach out to me on Twitter or LinkedIn.
I am the Global Head of Capgemini’s Financial Services Market Intelligence Group. I am responsible for Capgemini’s global portfolio of financial services thought leadership initiatives, with a focus on an outside-in perspective, including the renowned yearly World Reports series and Top Trends books in Financial Services. I oversee a team of strategy consultants and sector analysts who deliver a wide range of strategic research to help Capgemini’s financial services clients across the globe to address complex related to the future of Banking and Insurance.I was previously the Chief New Technologies Officer (CnTO) and FINTECH Lead for Continental Europe at Capgemini FS, with the mission to closely work with the Financial Services Institutions on their major challenges of digital transformation. My focus has been on engaging with FinTechs and InsurTechs scaleups to actively and efficiently embed them with Capgemini Financial Services clients. For that purpose I launched the Capgemini ScaleUp Qualification program, an end-to-end methodology to evaluate scaleups maturity to effectively collaborate with corporate. By end of 2019 more than 70 ScaleUps around the globe were already qualified though this unique-in-its kind program.I am a Payments expert, with 20+ years of industry experience at Visa and PayPal with roles spanning from APAC Head of Visa Consulting, up to PayPal regional MD in South East Asia & India and Middle East. Since 2013, I am a serial Fintech entrepreneur, launching Telr (www.telr.com) in Singapore and Dubai, an online Payment Gateway, which has won the “2014 Start-up of the Year” award in MENA. I advise several high-growth and disruptive payment startups in Washington, Singapore, Barcelona, Beirut and Dubai and sat at the Board or Chairmanship some of them. I am a certified “Scaling Up” coach; an inspiring thought leader, and enthusiast speaker on the future of payments in Emerging Markets.Elias has lived in US, LATAM, APAC, Middle East and Europe and is fluent in English, French, Spanish, Portuguese and Arabic.
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