The past several years have been transformative in the banking world. Technologies that were considered cutting edge not too long ago -- like mobile remote despot capture -- are now commonplace. So how will technology change banking in 2014? We asked some industry experts for their predictions.
The Rise of Self-Service Channels
Bob Grasing, RE Nolan
The top trend for banking in 2014 will most certainly be to provide more customer access and functionality for self-serve options. The predominant discussion regarding technology focuses on whether banks can match customers’ want and need for mobile applications that address their changing requirements. This is about creating solutions that they will want as much as it is keeping pace with what the top 25 banks are already offering. Continued reduction in branch transactions just provides further evidence of where customers are heading.
That said, with the rush to mobile banking, many banks are providing solutions to customers through remote applications that their staff cannot perform at their own banking centers and call centers. Making this consistent will become a necessary technology in 2014. Accordingly, tablet applications will be advancing to point-of-sale staff in banks so that the face of the bank is uniform and not on two generations, as it is viewed by customers today.
We will start to see a shift to web-based solutions from the old stubborn platforms that traditionally have been the backbone of the industry’s delivery system. This shift began in 2013; however, we will begin to see it escalate as answers for solving the changing customer needs are depoliticized in the strategic decision-making processes. There has been much discussion about a cloud-based design and, if this is the strategic direction selected, the shift will come quickly. The banks that will be most successful will apply customer appeal to their technology design and try to understand what their clients will want and need in the future rather than just what they like today.
Making the Shift to Identity 2.0
Jenni Palocsik, Verint
Attacks by professional fraudsters on financial institutions are rapidly growing, and their methods and tools are getting more sophisticated. Losses related to fraudulent activity—like account takeovers and fraudulent credit card transactions—can reach tens and hundreds of millions of dollars. The need for fraud prevention and authentication to help secure customer accounts has intensified, driving organizations worldwide to seek out and invest in technology and services that better detect fraudsters, reduce fraud losses, mitigate risk and improve the customer experience.
As we move into 2014, the most important bank tech trend will be the adoption of “Identity 2.0”—augmenting the contact center’s authentication process with predictive analytics across voice biometric, account, call and other metadata. Verifying identity becomes not just a fixed question-and-answer process, but a data science across multiple factors. By analyzing an interaction via a combination of “voiceprint” screening and other predictive factors, financial institutions can stop more attacks and fraudulent transactions, better identify and track known fraudsters, and improve the authentication process for legitimate customers.
While contact centers work continuously to reduce unauthorized account access, they must be careful not to negatively impact the overall customer experience. Historically, voice biometric solutions were deployed as a standalone solution—without incorporating other factors—and required caller interruption in order to be somewhat successful. These offerings were discontinued mainly due to their effect on the customer experience. In contrast, by combining with other factors in the overall predictive analysis, the voice biometrics of Identity 2.0 can operate passively—without customer interruption. This enables banks to silently stop fraudsters while accurately authenticating legitimate customers at scale, improving not only security but also customer satisfaction.
In order to be effective beyond the short term, financial institutions need solutions that evolve in response to the ever-changing nature of fraudulent attacks. These Identity 2.0 technologies will utilize multiple forms of biometrics and predictive analytics, and other tools like speech and text analytics, to keep pace with customer needs while thwarting unauthorized access.
Improving the Customer Experience
Christine Barry, Aite Group
During 2014 banks will be focused on improving the overall experience for customers. This will include continued enhancements to online dashboards that place greater control in the hands of customers. Gone are the days of banks determining what and how information is presented to customers at the point of login to online banking sites. Through the use of customization tools and widgets, customers will determine their experience and have faster and easier access to the information they choose. The banks will also have their own dashboards better informing them of customer needs, profitability, and product usage so they can better serve them. The ways in which information is presented will also advance. On the business side this will mean new reports that customers actually use rather than feeling the need to create their own. Reports will be more interactive rather than static, and will have more drill-down capabilities. Analytics will also start to play more and more of a role in banking to further improve customer service.
Today analytics is primarily used for fraud prevention and risk management. We will begin to see banks using it for cross-selling and ultimately to determine the next most likely product a customer may need. Down the road, customers will be provided information that helps them better understand their own patterns and product usage relative to their peers. While many banks still need to "get their data in order" and clean up inconsistencies and multiple sources, those able to leverage analytics will be able to differentiate themselves in the market.
Finally, as mobile payment capabilities advance in consumer banking, the corporate side of the bank will play catch up with new mobile offerings for both the smartphone and tablet. The goal for 2014 will be for banks to improve banking experiences for customers, keep them on their sites longer for greater cross-selling opportunities, and begin offering more added-value services that prevent the risk disintermediation, which is now a stronger threat than ever before.
Using Advanced Analytics to Know Your Customer and Drive Business
Steven Ramirez, Beyond The Arc
As social media adoption among consumers continues to accelerate, 2013 saw many financial institutions expand their use of social platforms such as Facebook and Twitter. While social media provides institutions with a greater opportunity to connect with their customers, it can also provide extremely valuable insights into consumer behavior. Armed with this information, banks have an opportunity to significantly impact the success of their marketing efforts to both new and existing customers.
Social media is one component of the Big Data equation. The key to successfully utilizing social data lies in transforming it into truly actionable insights by layering in analytics and combining it with other sources of data.
In order to win and retain customers in 2014, financial marketers will have to acquire additional competencies. For example, data science and predictive analytics can help banks synthesize all of these inputs to better target the right customer with the right offer at the right time. Advanced segmentation strategies that help to identify niches based on consumer behavior can significantly boost marketing effectiveness.
Traditionally, segmentation has been used to divide customers into groups based on their demographics, attitudes, or buying behaviors. This helps in trying to target specific groups with the message that will best resonate with them. Utilizing predictive analytics, previously hidden patterns in the data help banks to generate more in-depth customer segments. The resulting segmentation is more precise and nuanced, and is ultimately based on the likelihood that a consumer will accept a given offer. The result is a win-win situation as customers are offered more relevant products and services, leading to a more profitable relationship for the bank.
Beyond segmentation, there are several other ways that predictive analytics can positively impact your marketing success in 2014. These advanced analytics techniques can help you to boost cross-sell, taking advantage of the data to determine which products to offer to which customers. Analytics can also make upsell campaigns more effective, by looking at the patterns in how relationships evolve over time. Predictive analytics can also be applied to your Voice of the Customer program, to identify customer pain points and develop strategies to reduce attrition.
Social media, Big Data, and Predictive Analytics are some of the forces reshaping the way that bank marketers think about their roles. If you’re not harnessing these capabilities yet, you may be missing opportunities to more clearly differentiate your bank in the marketplace.