The banking and financial services industry is being increasingly pushed to cater to constantly changing customer demands at pace. One of the key aspects in this is to allow for hyper-personalization in the way customers and prospects are treated. The goal is to address a customer segment of one – tailored services which address each unique person.
However, achieving a customer segment of one requires the same fundamental business and functional components on the ground. Whether it is product and service definition, or a customer acquisition strategy there are definitive patterns that can be identified and applied seamlessly. What matters most is the ability to put these multiple components or “tiles” that can fit next to each other to create a broader picture. The “tiles” can be of different colors, shapes, and sizes. As long as their edges are “sharpened” through some core architectural best practices that enable composition – the ability to rapidly add or replace a functional “tile” without sacrificing the whole picture.
At Persistent we call this the Digital Mosaic – the unique, powerful combination of cloud-based services and applications a business can combine for the optimum service and business model.
Add to that the impact of the Coronavirus and this shift has only accelerated.
For established players, it’s the opportunity to move legacy systems towards the cloud. For de novo banks it’s the opportunity to build whole businesses from the ground up – often targeting previously under-served segments. Significantly, it removes the traditional dependency on complex, legacy IT infrastructures (and departments), replacing them with flexible, rapidly deployed, cloud-based software as a service solution.
There’s also been the shift to mobile banking – consumers expect it and indeed many new banking services forgo physical locations. This is only exacerbated by the current stay at home requirements. We now have large numbers of remote employees, forcing the industry to reconstruct back and front office systems.
Underlying everything remains the ever-present requirements around security, online identity, governance, and local regulations.
The power and flexibility of digital mosaic has never been more critical.
We’re seeing four key imperatives with our banking customers, large and small:
- New products and services must be rolled out rapidly.
- Mobile and digital-first is a given.
- New customer onboarding must be frictionless – as easy as possible, digitally done, including approvals.
- The front and back end business must support a dispersed environment while still being secure and following all financial services regulations.
To address these imperatives, we work with customers through key planning phases:
- Define digital strategy taking a customer-first approach (this can be hard for established financial services typically organized around lines of business).
- Re-imagine customer acquisition and retention.
- Re-imagine employee workflows to enable and support the transformation.
- Develop the timeline for phased execution and adoption.
We have at our disposal a multitude of cloud-based services – in particular for cloud-based banking solutions – as well as the latest solutions around customer interfaces and experience, data analytics, and machine learning/AI (such as sophisticated bots for customer service).
Leveraging Data for the Ultimate Customer Experience – a Segment of One
For the most effective customer experience, the bank must know everything about them – whether retail customers, small businesses, or high net worth individuals.
A bank must anticipate customer needs whether it’s to start a business, buy a car or vacation, a first-time homebuyer, or a college fund. The bank must become an integral part of a customer’s life, not just one-off, random transactions.
Harnessing advanced analytics, predictive, and spending pattern models all exploit the incredible opportunities presented by the massive amounts of data now have available. Data and third-party data sets provide deeper insights and in turn actionable services to customers. As a first step, organizations need to have a data strategy that unifies relevant data sources, enabling advance analytics and harnessing AI, ML and deep learning algorithms make that possible, which makes data the banks’ most important asset.
The Digital Mosaic in Action: Gojoko – Helping UK Credit Unions Compete
London-based Gojoko supports a network of British credit unions to help them grow and expand into modern financial institutions. The company provides management services, technology platforms, marketing expertise, and regulatory guidance to help them deliver sustained growth and best in class services to members.
Gojoko’s mission is to change the unsecured personal loan market to become sustainable challengers to high-cost lenders, particularly targeting near-prime customer base. Through its partner My Community Finance, Gojoko gives ethical lenders access to the loan market. Today My Community Bank is the fastest-growing credit union in the UK.
Working with Persistent and Mambu, and running on the AWS (Amazon Web Services) cloud platform, Gojoko provides a banking technology ecosystem with the agility to rapidly design, launch, service and scale client banking and lending portfolios.
Gojoko provides management services, technology platforms, digital customer interface, advanced digital marketing, and regulatory guidance to its banking customers – with the agility to rapidly design, launch, service and scale client banking and lending portfolios.
It’s a great example of a new UK fintech startup taking on major, entrenched financial services players with better, cheaper services and building businesses from scratch (mobile-first, no physical branches, using big data, AI/ML, etc.). It’s an effective way to acquire a cutting-edge banking platform without significant capital investment.
“For us to help our credit union clients compete against the much bigger and better-funded established banks, we must be faster and nimbler in how we help them do business. We provide a platform that is flexible and scales quickly, which in turn allows the credit unions to offer a very compelling product.”
– Continues Tobias Gruber
Critical Success Factors
The test of success is top-line growth. But also look at the speed of time to market for new products and services, and the time to open new accounts with all necessary screening, as two critical paths.
It requires the ability to adopt new cloud-based offerings fast, efficiently, and with little to no disruption, which means working with experts on the best in class cloud services and how to compose and integrate the very best digital mosaic for a business.