What the technology, process and people of a future-ready bank look like

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“Your architecture is how you build trust with your customers.” 

This quote from IBM Senior Vice President of Industry Platforms, Bridget van Kralingen, speaking at the Reinventing Financial Services event, captures what the day was about.

On May 22, about 100 C-level executives from leading financial services institutions joined us for an all-day conference about defining what a future-ready enterprise is, and how to build it. It was a packed day of peer-to-peer conversations on how to lead reinvention across the enterprise. Over the next few weeks, we will make insights from the event sessions available on-demand.

Core to the discussion was how we build platforms: how we make fundamental shifts in our technology, processes, people and ultimately our markets to deliver better customer experiences, build skilled workforces, and solve industry-wide challenges. Transformative technologies like cloud, AI, security, quantum, and blockchain were all discussed, in theory and in practice.

The conclusion? Getting started comes down to four critical changes in the way we, as leaders, approach reinvention:

  • A client-centered mindset in everything you do
    Ask yourself, “If I were to rebuild my business from scratch, with all the technology available today, how would I build it?” Think about that in the context of your branch, the on-boarding process, your KYC practices, your security, your payments system. You’d likely throw a lot of your current workflows out. You wouldn’t even consider paperwork. You probably wouldn’t even ask for addresses or social security numbers because there are more secure identifiers now. This radical rethinking, where utility and customer experience sit at the center, is fundamental to success platform building and business reinvention.

The customer-centered mindset doesn’t only change your product or service design, it might change your business model. Margins are shrinking, regulation is fast changing, and interest rates are forcing banks to think seriously about investments. Enter the platform.

Creating a brand new ecosystem that focuses on security, speed and efficiency, while being a fertile environment for new ideas and technology, can deliver a heightened customer experience not seen before in the financial services industry. Some of the most successful deposit products from challenger and incumbent banks alike offer lower rates, but offer add-ons like financial planning advice or budgeting tools. The results have shown huge returns in increased deposits and customer loyalty — while keeping costs down.

  • Invest in your culture — training, onboarding, and engagement
    One of the biggest questions voiced across the industry is how do we make sure our talent keeps up with changing architecture? The answer can be compared to how we rethink client experience, we must apply that philosophy to employee experience, too.

It’s clear that a culture that embraces inclusiveness is one that sees good ideas, makes them best practice and reaps the rewards across functions. Leading financial institutions are investing in AI-powered training and engagement tools to find, retain, train and reskill the best talent.

  • Start small, but strategically
    Client-first thinking and talent engagement are the ante to play. To build platforms and reinvent with technologies like cloud, AI, quantum, and blockchain, start with small, strategic plays. Rob Bauer of AIG put it well, when he outlined his three steps:

    1. Pick your bets where your biggest pain points
    2. Find partners to co-develop ideas
    3. Start small and keep trying

These initial projects in strategic areas help to shine a light on the path forward to  reinvention across the enterprise. Likely, they will reveal the partners or acquisitions that make the most sense, the basic infrastructure needs to remove data silos and staffing or training required to manage new models.

  • Define the opportunity and redefine what winning means
    The biggest shift will come through true platform development, because that’s how to architect for a future-ready enterprise. It’s about becoming an ecosystem for partners or fintechs. It’s about using AI-powered operations to better service customers and employees—this often involves getting careful curation of your existing data. And lastly, it’s about transforming and migrating your legacy environments to secure cloud-based platforms to unlock new efficiencies. For example, using a blockchain platform to stop industry-wide security threats or build trust across your entire value chain.These new technologies build on the advantages you already have, such as your proprietary data and breadth of expertise of the world’s leading financial institutions. Yes, it truly is the age of the incumbent.

Stay tuned for more on-demand insights from the Reinventing Financial Services event.

Learn more how IBM can help you and your financial institution achieve digital reinvention here.

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