You Don’t Need to Break the Bank to Make a (Better) Bank

And it’s probably a lot easier than you expect.

What we do know is that it should start with customers. You all need to bring down costs, be more competitive, grow revenues, and meet a myriad of regulatory requirements. But you won’t achieve any of that if you cannot engage better with customers. It’s a tough balance to achieve and one that will require new technologies to offer the scalability, flexibility, and innovation required.

But you don’t need to break the bank, either in monetary outlay or physical upheaval, to achieve those end results. Banks exist because of technology, but for too many that infrastructure has become outdated and unwieldy and unable to meet the higher standards now expected.

The good news is that to improve the IT estate, it no longer needs to be a matter of “rip and replace” or “big bang.” It is a process that can be managed from different starting points and with varying rates of change that enable access to the newest capabilities. The secret is to start small and scale quickly.

A key element of that process and the successful integration of the new technologies required such as cloud, data analytics, and AI/ML will be working with the right specialists. But more on that later.

INDUSTRY EVIDENCE

A recent survey commissioned by Finextra shows that although 68% of finance firms said they are ready to commit more funds to improve customer-facing technologies, some 60% agreed that this ambition is being hampered by legacy IT infrastructure and data silos.

It is therefore clear that the start of a digital transformation journey will be customised to individual businesses that can show:

A commitment to change.	An acknowledgement change is needed to drive efficiency.	That change will treat customers better.

Finance professionals already recognize the importance of using new technologies, with 70% in the survey saying artificial intelligence will be critical to be able to deploy advanced, dynamic, and intuitive offerings. But there is uncertainty about where to start.

The common denominator to the success of any change will be data and how you use it. Data has become a financial institution’s lifeblood, and it is only by addressing how the data flows and is deployed will banks be able to meet those higher standards now expected.

THE JOURNEY

So where to start? Well, it sounds obvious, but by making a plan. That doesn’t mean just a list of tactical fixes of areas that are broken. It means deciding what the end objective is, how that will be achieved, and what building blocks need to occur for it to happen. That blueprint will vary from business to business, depending on the status of current IT infrastructure, skills, and resources.

There must be clear leadership from the top of the organization to make this work and buy-in from both business and technology groups, while engaging a partner with experience to ensure a smooth adoption of the technologies that will be central to the eventual success.

So, back to the customers. Users want seamless, omnichannel access without having to repeatedly provide basic information to be offered appropriate advice and opportunities tailored to current needs that leverage existing data and other relevant information.

Our survey showed that the top three customer complaints were:

Having to re-enter information when pursuing an enquiry.	Appropriate products being difficult to find.	Wasting time due to chatbots not being able to answer questions.

These and other faults need to be addressed. We call this hyper-personalization where the moment a customer initiates an engagement with the financial service provider, it not only recognizes the person but can immediately demonstrate that.

It can pull together records from current and savings accounts, loans, cards, mortgages, and other business the customer has done (possibly even transactions with different banks – if permitted) to make educated suggestions about future relevant and interesting options.

This could be swapping out expensive credit card debt for a cheaper unsecured loan, or a higher returning investment opportunity to redeploy excess cash held in a non-interest earning current account. Most finance firms still find this difficult as it just wasn’t possible to integrate data from disparate parts of the organization for the benefit of the customer.

FOUNDATION STONES

But to put the customer first, the critical stepping-stone, is the deployment of a cloud platform that can sit above the silos, from where data can be extracted to be analysed and redirected by various APIs to become more useful. It becomes the pathway towards change.

The final piece of the jigsaw, that competitive differential, is how the organization elects to improve its direct engagement with customers. Chatbots have been sporadically deployed in the industry, but with limited success, as we saw from the survey.

AGE OF THE AVATAR

The next evolution will be an avatar-style response, supported by much more relevant data, both about the individual and the appropriate corporate products and services. This could also include capabilities like LLM (large language modelling) that open even more possibilities. Given the importance of partnerships, we have worked particularly closely with NVIDIA to get this next AI-led step right and were delighted to be recently named their Outstanding Impact Partner.

NVIDIA Announces Partners of the Year in Europe, Middle East | NVIDIA Blog

NVIDIA has used its experience in graphics, gaming, microprocessors, and high-performance computing to bring new powerful and realistic capabilities to business. And financial services are among the immediate beneficiaries where the combination of high volumes of transactions as well as high-value transactions create a perfect storm for the benefits of smart digital tools to be realised.

The meteoric rise of ChatGPT has demonstrated that generative AI can unlock enormous potential for companies and individuals. Whether simplifying time-consuming tasks or accelerating 3D workflows to boost creativity and productivity, generative AI is making an impact across industries — and there’s much more to come.

This has enabled SoftServe to leverage the NVIDIA AI platform to deliver bespoke digital avatars backed by customized large language models for hyper-personalized customer experiences that can make a real difference in finance.

More detail about how this works can be found here: Generative AI Delivers the Promise of Digital Avatars for Enterprise | SoftServe (softserveinc.com).

CONCLUSION

Banks and insurers might think they have an insurmountable obstacle to climb given the complexity, cost, and clumsiness of their current IT infrastructure with the ambition of hyper-personalization, AI, and digital transformation out of their reach.

Our experience proves otherwise. Results show that customers vote with their money (via their phones and laptops) by supporting those finance providers, who are bold enough to provide the smarter and more sophisticated means of engagement they have become used to elsewhere.

The future is here. It’s easier to embrace than you might think, and we are here to help make it happen for you and your customers.