The Importance of Banks Going Digital

The Importance of Banks

GOING DIGITAL

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In a more and more digitalized world, it's notjust time for banks to pull the trigger on

modernizing the ancient legacy core system, it’salso time for them to realized the importance

of digital onboarding.

American customers are demanding betterproducts and better experiences from their

banks. As technology becomes faster and moreconvenient elsewhere, it is expected of thebanking experience as well. And the risingnumber of digitally-based banks is going tomake this a more urgent problem to solve.

According to this Accenture.com article: “The2014 North America Consumer Digital BankingSurvey of nearly 4,000 bank customers in the

US and Canada, evidence suggests thattraditional banks have a somewhat uncertain

relationship with their customers despite the factthat in the US nearly 40 percent of customers—64 percent in Canada—have been with their

current bank for over the past decade or more.

Results of the survey indicate that customerswant a bank that’s nimble and proactive, one

that can be a part of their daily lives. The ideaof “convenience” in banking is undergoing a shiftaway from branch locations and toward digital

products and services that mesh with consumers’"smart" mobile-empowered lives. Also, banks thatcling to the status quo risk being viewed morelike utilities that conduct financial transactions.“

Core legacy systems in banks keep informationin a number of independent, unlinked areas, whichmake updates impossibly difficult. Updating onething often means that someone has to go inand manually change that one thing in every

core and system that the core is connected to.This includes areas like onboarding, billingsystems, and the customer relationship

management system. They all must be updatedindividually, which can take months to complete

per individual update.

Onboarding clients used to be a very operations-based and compliance-driven enterprise, not setup for optimal customer service because thecustomers coming in to your banking systemwould interact with banks face-to-face, with

employees and managers who (hopefully) putexcellent customer service at the forefront.

Now that you may never have a customer walkinto a brick-and-mortar location in the entirety of

the time that are a banking customer, theinterface and buildout of your onboarding is thefirst touchpoint your clients will have with your

bank. And possibly the only touchpoint.Successful banks who seek customer retentionneed to understand the importance of an error-free, friendly, and adaptive system from the

beginning.

The recent system failures at Westpac, HSBC,NatWest, who all had customers unable to bankwith their institution, and SunGard whose glitch in

a legacy system led to a disruption of thepricing of billions of dollars of assets, and hadto involve financial regulators, are all prime

examples of the way that layering technologyon top of fundamentally outdated core legacysystems can only be considered a stop-gap, and

can never a permanent solution.

Attempting to add digital channels on to theaging core will only serve to magnify theoutdated system’s flaws. While many in theindustry speak doubtfully about the ROI of

completely overhauling a legacy system to abrand new core, and the risks associated with

such an overhaul are high, the high demands andexpectations of the consumer and the newer

competitive digitally-based banks will ultimatelyend up making the decision for you.

The analytics power of updated technology andthe way that it can monitor trends, habits, theamount of time lingering on a page is an

immeasurable benefit. The more data you cancollect, the more profiling of the needs of theconsumer, the more arsenal you have at yourdisposal to give them exactly what they want.

Harnessing modern technology fromthe first interaction to the coreprocesses will, in the end, be thedetermining factor in the battle for

customer loyalty.