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Transformative Retail Banking
By Sangy Vatsa, EVP & CIO, Comerica Bank [NYSE: CMA]
1. Digital Banking – being able to offer most everything on a customer’s digital device of choice, like a smart phone, in a paperless way and in minutes while offering the banking center services for building and nurturing relationships. For e.g., completing paperless customer acquisition with digital signatures, all from your smart device and in minutes.
2. Co-bots – purposeful and automated collaboration between robots (commonly referred to as “robo” or “bots”) and humans to offer exemplary services. We refer to this as our “High Tech/High Touch” approach to have the bots focus on highly repetitive and more predictable transactions and having the bot-assisted humans focus on high-value and complex transactions. For e.g., Retail contact centers where typical customer email inquiries get answered by bots in seconds versus what traditionally took up to a couple of days; and as a result, freeing up the customer-service professionals to assist with other value-add services such as promoting and selling a mortgage product. Such automations, including robo-advisors are enabling the “the service to sale” opportunities.
3. API-based Fintech Services– these are the services offered by start-up firms with innovative financial offerings. While the initial focus of some of these companies may have been to displace financial services firms, that approach has evolved over the years. These companies have realized that customer trust, relationships and regulatory experience take time to build. Instead, they are now focusing on their core competency and collaborating with tech-savvy financial institutions to drive API-based integration of their innovative digital technologies. It creates a win-win. For e.g., there are a wide range of Fintech firms offering API-based capabilities in the areas of cybersecurity and artificial intelligence to help banks speed up their time-to-value.
4. Blockchain – it is a shared ledger technology that allows participants in a business network to transact assets where everyone has control, but no one is in-control. It provides a single point of truth for digital transactions. Once the transactions have been validated, transactions and digital signatures of transactions are immutable. This technology is continuing to mature, and it is positioned to offer many advantages either individually or in conjunction with other emerging technologies, like quantum computing. For e.g., financial institutions are starting to apply blockchain-related technologies in the areas of cross-border payments, smart contracts and fraud management.
At Comerica Bank, the Retail Bank team, the Marketing team and the Technology team are co-envisioning and co-creating our future capabilities.
Our Bank is known for raising customer expectations by offering customer-rich products and services. Fast maturing and adoption of digital technologies in everyday use is further elevating those expectations for our customers and our colleagues
Retail Banking is going through major transformation and multiple forces are driving the above trends. Customer expectations, rapid technology advancements, regulatory requirements, disruptive new entrants, and demographics are driving banks to take an objective look at their strategies and operating model. And more importantly, how best to delight their customers while growing brand equity.
The Delight Factor
Customer expectations are being shaped not just by banking experiences, but influenced by experiences customers have in their day to day lives. Customers expect banking services to be ubiquitous–available wherever they go and accessible from the channel of their choice: mobile, web, voice, chat, messaging, banking center and social media. They expect those experiences to be intuitive and personalized coupled with frictionless security. While offering services on channel of choice will become a standard expectation, that will not be sufficient to keep customer actively engaged. Recognition of “context and intent” is critically important and being able to respond in a timely and personalized manner will be needed to fulfill the promise of exemplary product and service offering. Furthermore, providing “channel-switching” while maintaining context and intent will make the offering complete. For instance, think of a customer who can consume a service from any channel of choice, switch channels as needed (for e.g., switch from mobile app to a voice call) and their context and intent is maintained and recognized; and followed by a personalized response. Such capabilities are starting to become real in the banking industry and such a practical approach to “omni-channel products and services” is helping create the delight factor.
From a technology standpoint, at Comerica we are engaged in all the above trends, and furthermore, we are taking a three-pronged approach to enable growth and success of retail banking. We are focused on improving both our “colleague and our customer experience” by modernizing the banking centers, digitally transforming our contact centers and pursuing an overall data-centric digital transformation that provides a modern and engaging experience across channels. Below are some quick examples of the approach banks like Comerica are leveraging to transform.
Banking as a platform:
The foundational element to stay relevant is to have a strong obsession with “human-centered design” and delivering that through an agile platform approach.
Modular and Adaptive Products
Designing and building API-enabled product features in a modular way that can be quickly assembled for use across lines of business. While this provides cost optimization and speed to market it also provides consistency of experience to customers who do business with the bank across lines of business.
Usage of multi-factor biometrics (such as voice recognition, facial recognition and fingerprint) are on the rise. Banks are piloting solutions that reduce the friction of authentication and allow channel-switching with ease. The banks are at a good place to move this trend towards creating digital identity that can be used beyond their financial interactions.
While the benchmark for product delivery and consumption is being set by the “non-banking natively-digital” companies and by the next wave of customers (like the millennials) respectively, many of the forward-thinking banks still own the loyalty and trust of their customers with their bias towards customer-centricity and relationship nurturing. Aided by the modern technologies that are helping to create a more level-playing field, banks need to continue their digital transformational journey and selectively and “constructively” disrupt themselves before others do it to them.