Today’s consumers have high expectations when it comes to the customer experience. Fueled, in part, by the anytime-anywhere access and personalized experience they’ve come to expect from their favorite retailers, consumers are bringing these same expectations to their banking relationships.
It is no longer sufficient for banks simply to provide 24/7 account access, online banking services, or on-the-go mobile check deposits. Today’s banking customers have elevated their service delivery expectations -- demanding that banks demonstrate a complete and holistic understanding of their unique needs as well as ways in which to best serve them, on their terms. This includes rapid and “frictionless” processes across the customer lifecycle, including new account origination and customer onboarding.
“Know me. Empower me. Wow me!” These simple statements encapsulate the mindset of today’s consumer. While straightforward and direct, many banks struggle to meet even one of these requirements for basic business processes.
As the equilibrium of the banking relationship continues to shift overwhelmingly in favor of the customer, banks must fundamentally change the way they do business. They must move from the historical “stove-piped” product and account-centric silos to be truly customer centric, drawing the customer toward the bank and its services rather than pushing products out. While there are many processes that can benefit from implementing this approach, one in particular stands out: origination.
Anyone who has experienced a mortgage origination process can attest that it is an emotional process, equally thrilling as it is nerve wracking. During the process, borrowers (customers) are required to submit a variety of sensitive financial information to the bank for assessment, including tax returns, prior paychecks, credit card statements, and bank account balances. Today’s customers undertaking this process are demanding more transparency into the loan origination process, seeking to know where their applications stand during processing. As a result, banks have an enormous opportunity to engage the customer at the critical “starting point” in the relationship to establish a foundation of true customer centricity, which can solidify a potentially long-term relationship.
A customer’s origination experience does not start with the application form he or she submits. Rather, it begins with the customer’s first interaction with a bank, which is frequently initiated from the bank’s self-service portal. Banks must be able to seamlessly manage the complete customer onboarding process, from the first interaction to the first meeting and the final offer, while adding value throughout the process.
For example, when an individual considering purchasing property initially visits the website of a bank to research finance options, he or she may enter high-level details about the purchase, even calculating payments and projecting fees with an online calculator. A bank can then capture that information, and follow up with the potential customer to discuss plans and present options.
For example, the banker and potential customer could meet informally at a coffee shop that is convenient to the customer, where the banker could present ideas via a tablet, with all necessary customer and product information at his or her fingertips. When the consumer is ready to proceed, the bank can use much of the information previously captured to pre-populate the formal loan application and then offer a convenient, individualized document repository where the customer can upload documents, such a pay stub, to qualify for the loan. Then, the customer can track the application progress online, much as consumers expect to be able to track packages from their favorite online retailers. This type of retail-like fluidity is indeed possible in the financial services industry, but achieving it requires resolute focus on transformation.
For banks to effectively achieve true customer centricity, they must take a close look at their technology infrastructures to determine if the systems and processes are ready for this new age of customer service delivery. All too often, archaic, legacy IT systems prove to be a major obstacle in this process. Banks must make the decision to execute a technology modernization strategy to address fundamental issues with their IT platforms, with a view to enable transformational business outcomes. These modernization strategies must include technology principles that are characterized by the following:
- A modern platform, featuring a native, service-oriented architecture comprising cross-channel, coarse-grained services including (for example): account summary, any-to-any funds transfer, real-time offers, and account aggregation services.
- An enterprise-class security architecture covering bank staff, customers, and third parties. The security stack must be both role and channel aware, allowing for differences in security rules (e.g., limits). Security instrumentation should exist within the technology infrastructure and not in the application code, ensuring consistent enforcement of the bank’s security policies.
- A fully “multi-multi”-capable solution that supports multiple brands, entities, currencies, languages, and time zones within a single operating instance of the platform, designed and engineered for scale and performance that reduces total cost of technology ownership. Only a modern banking platform with a well-considered data model can provide this multi-entity, multi-brand solution within a single platform.
Clearly, modern banking requires modern systems. To meet today’s massive business change agenda, banks need modern and agile technology, but most are encumbered by aging systems rapidly approaching obsolescence. At a time when banks must transform their business models, they are also confronting the need to fundamentally transform their IT platforms. To achieve real and holistic customer centricity, banks must deploy comprehensive, pre-integrated solutions that enable them to take the complexity and cost out of technology and focus investment on executing a strategic transformation of their business. Without this transformation, financial institutions will undoubtedly see more and more customers forego building lasting relationships with banks and opt for non-traditional banking partners.
Nafisul Hasan is a senior director in the financial services global business unit of Oracle. He currently manages the Global Solution team for Oracle Banking Platform. He has more than 17 years of experience in delivering banking transformation projects across the globe. View Full Bio