November 04, 2013

A differentiated customer experience is increasingly becoming a key competitive advantage in financial services, but banks need to change how they innovate to achieve that differentiation, says Eric Disend, a partner and leader at Capco Digital.

“I’ve often seen where a team gets a great idea and a project gets started, and then along the way you start to bring in constraints like compliance,” Disend relates.

Once those constraints are brought in, the idea at the heart of the project tends to get watered down, Disend observes, and the end product winds up being a vanilla offering. The differentiated experience gets lost along the way as compliance, security, legacy back-end systems and other considerations take their toll over the course of the project.

[Check Out How USAA Has Improved Its Customer Experience: USAA's Greg Schwartz Keeps IT's Focus On The Customer Experience]

Moving forward banks will need to be more collaborative early on in the development of their projects to avoid this issue, Disend says. “You need to bring in different teams earlier on so these constraints don’t come in later and have a negative impact,” he explains.

Banks have to focus on becoming more like startups in terms of being highly collaborative. “As spending comes back during the recovery, banks should use those resources to reinvest in innovation. They now have the opportunity to say we’re a tech organization, and we need to think differently,” Disend recommends. And part of that is figuring out how different teams are going to be aligned over the next several years to work together, he adds.

Beyond greater collaboration, Disend also says that banks need to be more determined and focused to achieve differentiation. “There needs to be a desire to create a differentiated model,” he notes. “To simplify the customer experience, you really need to drill into the details. You have to be determined to push boundaries a little harder.”

That focus and determination can get lost when the constraints set in, and then taking the constraints into account becomes the focus, Disend shares. Collaboration can help ameliorate that issue, but it will still be up to the IT teams to stay sharp and keep their focus on the details.

ABOUT THE AUTHOR
Jonathan Camhi is a graduate of the City University of New York's Graduate School of Journalism, where he focused on international reporting and interned at the Hindustan Times in Delhi, ...