Strategy

3 areas banks should embrace to address customer experience

Having worked with many financial institutions on product launches over the last several years, it is clear that customer experience remains a key focus. The banking sector continues to invest in emerging technologies as digitization accelerates, the pressure of commoditized services mounts, and emerging branchless disruptors nibble at the market share of retail banking.

A great customer experience encapsulates both digital and physical channels and introduces interchangeability between the two. However, banks are struggling to rapidly adapt to this omnichannel strategy. Focusing on three areas in particular can help while also accelerating products to market amid rapid digitization as well as deescalating costs.

The microservices movement

To improve response speed to customer feedback and take advantage of a changing market landscape, banks must invest into aging core systems via the introduction of microservices. Microservices enable IT organizations to create a loose-coupling model between industrialized, slow-to-make-changes, non-core banking systems and the agile, nimble and customer-centric endpoints, such as web and mobile.

Microservices for banks

In other words, customer needs can be met quickly through digital customer experience touch points, while the industrialized core is upgraded in a more linear, slower fashion.

Embracing Agile in the banking sector

We’ve seen even a small initiative, such as a retail mobile banking application take a Tier 1 bank over two years to take to market with costs exceeding tens of millions of dollars. That’s an extremely long time for today’s technology-enabled consumer, not to mention the associated costs. Maneuvering a fleet is not an easy task. 

Lack of speed and high failure rates are influenced by the way banks plan, fund, and manage delivery for digital experiences. Oftentimes, new strategic initiatives are still planned and funded using a lengthy business case process that locks in all requirements ahead of time and then facilitates execution using a waterfall delivery method. Since waterfall manages risk poorly, costs often rise due to last-minute change of scope (refer to Devbridge’s Waterfall vs. Agile infographic). Furthermore, quality assurance costs keep going up due to brute-force, manual testing methodologies applied to software. There’s a better way, however.

Results delivered

These approaches enabled a North American Tier 1 bank to launch a brand new mobile banking platform in just six months, with an investment of only $2.5 million. Working together with bank employees across the organization from operations to IT, we helped deliver the product while transferring the agile skill set. To date, the bank has transitioned a majority of the commercial banking software to agile and demonstrated improved time-to-market.

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