Though the the journey to true customer-centricity for banks may be a multi-year process, they still can realize immediate business value as they continue along that path, according to Simon Paris, global head of financial services for SAP.
Paris, speaking on transformation in the industry at the International SAP Conference for Financial Services this week in London, advised banks to set expectations as they attempt to move to a customer-focused, customer-centric model.
"This is not a short cycle, it’s a multi-year transition going from channel-centric to customer centric," he said. "However, it doesn’t have to be a multi-year journey to value." Paris added that banks don't have to deploy new technology and systems in a "big bang" approach, but can pursue rapid deployment in a phased manner to achieve this.
"No longer can you take six or nine months to release a new product, you have to do it near instantly," he added.
This is all part of a larger trend in the industry, said Paris, of moving away from the legacy environment of large-scale IT shops towards more standardization, simplification and modernization. This comes at a time when "banks are no longer competing with just other banks," he noted, but rather with telecom companies, internet service providers, and the likes of Square, PayPal and Google. This shift is what makes customer-centricity such an important goal for banks to achieve, and having the proper technology to do so is a big part of that. One such technological capability needed by banks is sophisticated data analytics, which is how they can pursue relationship-based pricing for their products, Paris noted.
"You need to anticipate the customer, which you can do through the power of predictive analytics," he said.
But it's not just about technology in and of itself, Paris added. Banks need to be convinced at the board level that the fundamental way in which they operate needs to be changed. "The management…needs to convince the board level that what worked thirty or forty years ago isn't sustainable," he said.
Banks also need appropriate change management, in both dealing with the existing tech and ops staff and the "inherent fear of change" many organizations have.
While all this is happening, banks, of course, must navigate an increasingly burdensome regulatory environment.
"There is a plethora of regulatory hurdles to comply with, and it gets worse between now and 2019," Paris said. "How we deal with that is one of the main topics in developed markets."