Minute by minute, the financial services industry finds itself competing, adapting and reacting to disruptors. By now, we understand that the pace of the fintechs and non-banking entities surfacing and vying for our clients and our revenue streams is not slowing down.
In addition to the emergence of new players and models for traditional banking services, concepts for managing our business—scaled agile methodology, public cloud and APIs, infrastructure as a service, AI, robotics—are now delivering a real wakeup call to banks. These new capabilities are posing a litany of unanticipated paths to both grow and protect our business and clients
So, how are banks actually dealing with the disruption? It’s not a “beat them or join them” decision any more.
Banks must look beyond investing in expanding product or increasing relationship managers to grow and instead, really challenge their business strategies.
Dealing with disruptors should be less about the race to market with a new product feature, because for banks striving to build meaningful and lasting client relationships, once a race to market is over, that’s where the real test begins.
Given the heightened disruption in recent years, banks’ natural response has been to increase their technology investments on new client-facing technology. Every bank feels the pressure of rising client expectations around ease of use and is inclined to arch toward providing the new tools and services to accommodate mounting expectations.
However, the client experience cannot hinge entirely on the new technology a bank provides; the performance of that technology and its ability to strengthen relationships is just as, if not more, critical than its availability.
Now is the time for banks to ensure the attention they are giving to new capabilities is not coming at the cost of creating solid operations strategies. Banks don’t necessarily need to take themselves out of the race to deliver new capabilities, but rather, work to strike a balance between innovation and operations, cementing ongoing service as a fundamental part of the equation.
Putting operations at the forefront
If a new tool designed to save clients time or offer them new conveniences is not well-executed or operated, how valuable will it remain?
How important will the solution be in a year, or in five years, if there is not a solid plan in place for continued maintenance?
To truly compete with the disruptors, banks should be putting operations at the forefront and designing operations strategies at the onset of an implementation cycle.
Beyond addressing how clients will use a new solution, on the front end banks need to determine how ongoing client engagement and continuous delivery will look. What are the related service, support and operational experiences around that new solution?
As banks work to distinguish themselves in a crowded marketplace, it is more important than ever to operate new tools and capabilities with the same thoughtfulness with which they are launched.
Challenging longstanding concepts
Improving the client experience from an operations standpoint certainly adds new layers of complexity, requiring many banks to challenge some of their traditional concepts.
For instance, to truly modernize operations, banks should be working to dissolve the customary division between “client-facing” and “non-client facing” employees. This separation no longer aligns with today’s client interactions that occur in a growing number of channels, especially given that a single transaction or experience often begins and ends in completely separate channels.
If a client initiates a transaction, such as a loan application, online but completes and signs the application at a branch location, he or she isn’t necessarily relying on the service of just a front office or just a back office employee. There is mutual accountability for this transaction and for this client’s experience.
After all, if the online portion of the client’s transaction is simple and convenient, but the handoff from that interaction to the branch interaction is not seamless, that initial, positive digital experience loses some of its value.
Redesigning operations to support a true omnichannel model toward banking must start by reducing the separation that traditionally exists between client and non-client facing employees.
Today, everyone in some shape or form is “frontline.” Thus, banks should be fostering shared responsibility for what’s most important—the client.
Extending the value of digital
At SunTrust, one way we are emphasizing operations and leveraging the concept of shared accountability, which we refer to as One Team, is by identifying new ways to extend the value of digital to our traditional channels.
Of course, digital has an ever-expanding impact in the form of client-facing, self-service tools; the volume of transactions taking place through our online and mobile channels is growing continuously.
However, to us, digital is also a service platform. In addition to its client-facing functionalities, digital enables us to accomplish objectives such as eliminating paper in certain areas of the bank and accelerating key processes.
We are also using digital to move data in a way that is more secure from a risk perspective and that allows us to share insight from clients’ digital transactions with employees in our branches and our client contact center. By leveraging the success of digital within these traditional channels, we can arm employees with data they can use to understand our clients’ needs and to better engage with them in any channel, or even in multiple channels.
We also placed a considerable emphasis on our operations strategy when we implemented a new loan origination platform, nCino, in 2016. Knowing that speed fuels today’s competitive lending environment and that clients’ top priority is to receive faster lending decisions and faster funding, the adoption of this platform represents a considerable milestone for the bank and our commercial lending business.
With nCino we automatically gained a single sales and service platform, but in addition to these inherent operational benefits we also thoughtfully designed our operations to unify sales, fulfillment, and servicing.
We have continued to mature our operations around this platform, and as a result are effectively meeting the ultimate goal of accelerating client delivery. The ongoing success of this platform exemplifies the importance of committing to modernizing infrastructure and reshaping operations, while keeping the client experience at the core of our strategy.
Building a more agile bank
Refining an operations strategy also supports our work to become a more agile bank.
As we consider new ways to deal with the disruptors and gain a competitive advantage, we are developing in close partnership with the business, using contemporary methodologies to deliver new technology capabilities faster and in a way that facilitates continuous fulfillment and servicing .
We are evolving the bank’s operating methodology through our Business Accelerator program, which combines agile development with concepts such as design thinking, continuous delivery and modernized infrastructure to bring these new technologies and capabilities into our environment.
Our Business Accelerator methodology is rooted in this philosophy that operations and technology should be built together hand-in-hand—while remaining in constant alignment with the business. As Business Accelerator changes how we bring technology to market, it is also promoting collaboration not just across IT and operations, but across the enterprise and in direct support our clients’ needs.
Focus on fulfillment
The banking industry has worked hard shed its “slow to change” reputation. There’s no denying that we have made great strides, and as a collective industry have become more flexible and quick to adapt in recent years. These advancements can be credited in large part to banks’ rising investments in self-service and client-facing technologies, and change continues to be driven by amplified competition.
However, as banks determine the course of their technology investments, they should be weighing the positive, long-term impact of aligning operations strategies to the development or adoption of new capabilities. While banks can still count on client numbers to grow as a result of launching new tools and services, client relationships last based on a bank’s fulfillment of those services.
Banks should be giving more careful consideration to ongoing client engagement, viewing client interactions more holistically and operating their technology in a way that supports not just experiences, but that fosters relationships.
We all want to impress our clients with the latest and greatest that technology has to offer—there’s no denying that. Who doesn’t want to hang with the “cool kids”?
However, truly putting clients first means investing in tools that might not be considered sexy and that might not attract millennials (and now Gen Z) immediately and in droves.
Instead, dealing with the disruptors means making technology and operations decisions that will help give clients confidence in the financial decisions they are making with your bank, allowing them to worry less about their finances and instead, focus on the moments in their lives that truly matter.