The banking industry, while one of the oldest institutions, is often disrupted by the changing world around it. Being pushed by consumer demands, changing legislature, and competition from other non-financial industries, banking must create more agile workflows and processes to keep up. Digital Transformation is a phrase we use often to describe this pivot in processes, but it can take on many forms.
Many times, industries observe and borrow from other sectors to determine what might help them. Banking is no exception and can use a variety of techniques to keep the industry evolving in the fast paced world of today.
Use Customer-First Thinking
2020 and beyond has brought a new requirement of companies, complete transparency, and a concern for their customers. Long gone are the days where banks and similar companies can focus on what’s best for the bank. User experience is the driving force for consumers and a make or break for many of them. In fact, 96% of customers say their experience interacting with a business is a deciding factor when it comes to brand loyalty.
Because of this, banks should focus on creating a friction-less customer experience. Paperless transactions, more online resources for investing, and a better customer support pipeline are all at the top of the list to be improved in the banking industry. Investing in better user interfaces for mobile apps is a first step many banks have taken. They can also take that one step further to improve on resources available, and increase customer service reps available at any given time. Some bank chains have already deployed 24/7 chat customer representatives, allowing customers to access help at any time.
Modernize Legacy Systems
While many sectors have started implementing Cloud, big data or similar technology, few have as much physical data as the banking world. By modernizing existing core systems with technology like DevOps or microservices, companies can create a seamless integration and delivery. Ultimately, by updating legacy systems and digitizing physical paperwork, banks can make a seamless workflow for their employees, and improve customer experience for end users. Not to mention, create a more secure atmosphere for sensitive data and have improved data governance and tracking.
Collection methods and transmission standards are some of the pain points for companies, according to the OFR and SEC. The OFR also lists the following as common issues with banking and financial institutions;
- Missing or incomplete data requirements
- Inaccurate instructions and a lack of resources to support data reporters.
- Lacking data quality, often from incomplete reports.
By modernizing legacy systems, companies can address these common issues, and improve workflows simultaneously. While updating systems may take time upfront, the payoff is big. Updating now, with the help of one of Intellective’s technologists, means updates in the future will be easier with our seamless implementations. Meaning, your company can make improvements without disrupting your current workflows.
Invest in Their Work Force
While automation is a helpful tool in any sector, it cannot replace humans with a detailed understanding of the industry they work in. A company or industry can pour money into improving technology, but if the culture and people do not adapt, then it is all for not. Employees make up a large portion of the operating costs for banks. In the coming years, the employees will need to learn new and improved technology to support the important customer experience. In fact, 56% of the financial workforce will require new skills in the coming years.
What can the banking industry do to support their current employees? By providing them training and supporting continuing education, the company will see a significant ROI. Not only will employees bring back new skills to the workplace, but their new appreciation for improving technology can also further improve workflow and processes. The Office of Financial Research states, that the final step in having better data collections is to provide a mechanism for data reporters to ask questions and obtain help. Continuing training and resources means better data governance overall.
Valued employees are happier employees, and they are more loyal, meaning a smaller employee turn- over and less on-boarding costs in the long run. People who enjoy their job and feel fulfilled are willing to give back more to the company and provide a better user experience.
Case Study
As a case study, JP Morgan recently launched COiN, an AI program created for loan processing. Why is this a huge step for the banking sector? It combines excellent customer experience and modernizes the data collection process. The program uses image recognition to compare agreements. It boasts completing tasks in seconds, compare to the 360,000 hours the same task would take with human labor. Does this mean layoffs for the company? Not according to Matt Zames, the banks CTO. Rather, he cites that this frees up the workforce for higher level projects. This finishes out our triad of points. By modernizing processes, JP Morgan was able to create a better user experience through faster workflow times, and allow the banks’ workforce to focus on higher- level tasks, and invest in employee training.