Digital Banking Creates Opportunity for Customer-Focused Finance
Digital transformation is heralding significant changes in the banking industry. Direct customer interaction through a multitude of channels means that banks must truly know their customers and service them securely. Yet many established banks lack the time and budget to make the kinds of innovative improvements they need to compete in this new marketplace. Fortunately, a new approach can help. Known as customer-focused finance, it involves first lowering costs on older “run-the-bank” operations, then freeing up resources for much needed “change-the-bank” innovations. Typically powered by customer information the bank already holds, these innovations help banks turn raw data into actionable knowledge.
A DIGITAL FUTURE
Imagine a last-place football team that sorely needs new talent, yet spends so much money on uniforms, balls and other equipment, it can’t afford to pay the kind of salaries that top players would require.
That, essentially, is the troubling situation facing many banks today. On the one hand, they desperately need innovation to keep pace as their industry rushes toward digital banking. On the other, they spend as much as 75 to 80 percent of their IT budgets on day-to-day, “keep-the-lights-on” operations. These run-the-business activities are important. But this level of spending leaves bank executives with just 20 to 25 percent of an IT budget available for change-the-bank innovations.
Demands for improved customer experience, competition from startups and calls for operational efficiency, even as regulation and compliance rules become costlier and more challenging, have turned the banking industry on its head. In this environment, organizations must free up capital to innovate — or risk being left behind.
Today’s banks need to adopt a next-generation infrastructure that enables them to save money on legacy operations while adapting to the digital banking world with cloud-based platforms and digital applications.
Download the complete position paper to learn:
- How a new approach can help banks innovate and embrace digital banking
- Why banks need to adopt next-generation, cloud-based infrastructures
- How banks can use a four-layer reference architecture to achieve dramatic transformations and achieve their highest priorities