Many banks that are building towards a customer-centric business model face a common challenge: they have too much software and applications running through multiple lines of business and channels, say Mike Cook, a partner at IBM. Not only is it difficult to gain a 360-degree view of the customer in such a complex environment, but maintaining such an environment is a huge expense for many banks that soaks up investment that could be going to strategic goals like customer-centricity, he explains.
“CIO’s never strove to run an organization with so many applications as many have today,” Cook relates. “It’s too complex to try and do something new when you have 3,000 apps on 100 different platforms. Just staying current in that kind of environment is a huge expense; and if you can’t stay current then you have compliance problems.”
This complexity seen across the industry is driving demand for software-as-a-service offerings, Cook notes. “We have many clients that say they won’t buy any new software -- they want everything as-a-service. No one gets any joy out of managing the software,” he shares.
[For More on This Topic: Customer-Centricity A Long But Worthwhile Journey for Banks]
Simplifying the IT environment becomes a more urgent imperative as banks try to cut through organizational and IT silos for a full view of their customer relationships. IBM partnered with Zafin earlier this year to offer Zafin’s miRevenue platform for relationship-based product and pricing management as a solution hosted by IBM. The platform acts as a centralized hub sitting between a bank’s core and its other systems that can collect data from all of those systems for a 360-degree view of customers.
Customer-centricity can mean different things for different banks, Al Karim Somji, Zafin’s CEO, says. But any bank that is customer-centric will need to be able to increase their number of products while pricing based on their customers’ full relationship with the bank, and then pulling data from their product and channel systems back to sales and marketing, he adds. That is made much easier by a cloud-based solution that can support multiple channels and lines of business as-a-service, Somji suggests.
“Banks that are talking about customer-centricity need to be worried about their business, not about their IT environment,” Somji comments.
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And providing the platform on a multi-tenant basis also saves cost for the banks, IBM’s Mike Cook adds: “We can give big bang functionality at a low cost.”
In contrast, the cost of not moving to a customer-centric model could be very high for banks, Cook says. Banks can look to the development of retail commerce online as an example of the effects that digital disruption will have on banking, he argues. “I look to retail as a canary in the coal mine… the retail banks are going after the same consumers that retailers are. E-commerce was won by Amazon and eBay. I think we’re heading for a similar showdown in banking, where there will be winners and losers.”
Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio