Digital disruption drives change

Date: Mon, 03/21/2011 - 20:34 Source: Capco press department

Capco's Nick Levy offers banks a transformation checklist for their digital banking plans
Digital disruption drives change Rob Heyvaert, CEO, Capco

Financial services firms need to transform their digital platforms to create bottom line growth through increased levels of loyalty, engagement and sales. With increasing levels of online engagement across their customer base banks are increasingly re-assessing their digital proposition with a view to acquire and retain customers. Nick Levy, Managing Principal at Capco, the financial services business and technology consultancy, says: "there is a ferocious pace of change within the digital domain and this requires banks to reconsider their approach to providing access to their products and services online. Banks must adopt more flexible and capable platforms to ensure they are able to bring consumers innovative and engaging services which ensure they remain relevant in the digital domain where social networking, person to person payment services and new market entrants are increasingly challenging the relationships banks have with their customers.

Consider this
It took 38 years for radio to attract 50 million listeners. 13 years for television to attract 50 million viewers. In just 4 years the Internet attracted 50 million surfers. Facebook has more than 600 million active users, people spend over 700 billion minutes per month on Facebook, there are more than 200 million active users currently accessing Facebook through their mobile devices. YouTube has more than 2 billion views per day, 24 hours of video are uploaded every minute and more video footage is uploaded to YouTube in 60 days than the three major US networks have created in 60 years.
As the range of digital banking propositions matures and banks move to deliver enhanced features and capabilities, executives are increasingly being asked to reconsider their underlying business and technology capabilities to deliver more and deliver faster.
This transformation journey for digital banking is now entering a critical phase. The checklist below shows what financial services institutions need to do to prepare for the changes ahead.

A transformation checklist
    - Define a target for multi-channel engagement - what services, to which customer segments; consider what it takes for your business to deliver a great customer service in the digital domain, for some customers the digital channel will augment an existing relationship with the bank and for other customers it will be the relationship

    - Deliver incremental change to transform customer behaviour - very simple services such as SMS alerts drive customer adoption of the digital channel, innovation such as advice and guidance requires higher levels of trust but all of this transformation can be delivered with a transformed digital platform designed for flexibility

    - Understand the shifting demand and create platforms which support innovation - moving from the cash paradigm / cash replacement the mobile banking (NFC) proposition must be able to deliver seamlessly to meet customers' user experience expectations (link in Fax machines and pagers - rate of adoption v rate of decline - rate of IPAD adoption - number of searches on line each day)

    - Leverage the insight and data flows available from real-time interaction - close looped marketing delivers improved customer loyalty by converting insight; multi-dimensional analysis allowing high levels of customisation can drive significant sales

    - Security is not a solution - risk based and flexible identity and access management ensures flexibility to support emerging technology and functional innovation such as real time payments (faster payment) and drives higher levels of customer activity on low cost channels

    - Pervasive computing is here - tablet, smart phone and mobile applianceadoption has reach a tipping point, access to the internet on the move is here; location awareness and more powerful devices are driving a user interface transformation and improving usability. Support a digital proposition for segments of customers who only ever access services on the move via connected devices."


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