Banking

HOW CAN CLOUD-BASED ANALYTICS HELP BANKS DRIVE DIGITAL TRANSFORMATION?

By Paul Jones, Head of Technology, SAS UK & Ireland

Fintechs are turning up the heat in retail and corporate banking. As smaller, more agile providers have entered the banking market, customers are getting used to a higher level of service – a personalised, digital experience that guides them to make quicker, smarter decisions about their finances. For traditional banks to compete, they need to transform the way they operate. On the retail banking side, that means digitising customer-facing services. No queuing in branches, no paperwork. And when customers apply for a credit card or loan, they get a decision in seconds.

Meanwhile, on the corporate side, the aim of transformation is often to enable an everything as a service (XaaS) strategy, building smart packaged offerings such as treasury as a service or risk management as a service, which the bank can both consume in-house and provide to enterprise clients.

Data-driven digital transformation

To foster this type of digital business transformation, banks need to redesign both internal and customer-facing processes to embed data-driven decision making. By integrating intelligent automation and decisioning capabilities into their operations, banks can eliminate paperwork and manual processing. This will greatly improve service levels to customers while keeping the cost-to-serve to a minimum.

The creation of these data-driven services depends on the ability to design, build, test and deploy processes that embed predictive models using both well-established statistical methods and new artificial intelligence and machine learning (AI/ML) techniques. The development life cycle for these models is inherently experimental. It’s vital to try different approaches, test the results, and iterate on the candidates that offer the greatest potential. To remain relevant in the digital age, organisations must deliver such experiments with agility and speed.

The obstacle of legacy infrastructure

The problem is that banks’ traditional IT architectures – built around legacy on-premises systems – are a uniquely bad environment for developing these models. Due to the experimental nature of the models, it’s very difficult to forecast what type of infrastructure banks will need for upcoming projects. For example, different machine learning algorithms run best on hardware that has been optimised for that category of model building. If you invest in a cluster of servers with a particular configuration of memory and processors, it may only be suitable for a small subset of the work you actually need to do. And every time you need to change your approach, you’ll face high fixed costs and a long lead time to get the right infrastructure in place.

Instead, you need an IT architecture that allows you to set up experiments quickly and manage them flexibly. When an idea doesn’t work out, you should have the ability to fail fast and cut your losses. And when an idea succeeds, you need to get it into production rapidly and roll it out for enterprise-scale deployment.

The promise of cloud-based analytics

The cloud is the perfect environment for these exploratory projects. It gives you the freedom to spin up almost any type of infrastructure within minutes, and either scale it or shut it down instantly depending on the results.

Cloud environments also free you from dependencies on departmental silos and the quirks of your internal network. They give you a green-field site where cross-functional teams can collaborate freely, enabling you to build models that combine domain knowledge from different areas of the bank and create opportunities for XaaS offerings that would never have been possible in the past.

Regulatory hurdles

While most of the major public cloud providers now offer a range of analytics-specific infrastructure services, they come at a price. Once your data and models live in a particular proprietary cloud repository, they can be difficult to get out again. You’re locked into their infrastructure for the foreseeable future.

Besides the commercial implications, this lock-in poses a major regulatory problem for banks. According to the latest consultation paper on outsourcing and third-party risk management from the Prudential Regulatory Authority (PRA), regulators expect banks to be able to port any outsourced services over to another provider or bring them back in house without any risk to business continuity.

The right tool for the job

I’ve had conversations about moving to the cloud with CIOs at banks of various sizes, and this issue of portability has been a recurring theme. They are looking for analytics solutions that work with any vendor and run on any cloud platform – or move between platforms – without significant disruption. In fact, since many banking use cases involve analysing data that is too sensitive to store outside the internal network, one of the most-requested offerings is a hybrid cloud/on-premises solution. Banks could then perform experimental projects with anonymised data in the cloud and then bring the successful models back into their own data centre for deployment in production.

Finally, while there’s a lot of buzz around AI/ML techniques, it’s important to recognise that they are not always the best option. Traditional statistical methods can be equally powerful, cost less to maintain, and can be easier to explain and audit – an increasingly important capability, as a recent legal case in the Netherlands demonstrates. My advice is always that banks should look for a single platform that gives equal support to both statistical and AI/ML modelling techniques and provides easy-to-use visualisations that make models easier to interpret. This allows your data scientists to pick the best tool for the job. And makes it easier for you to ensure the safe and responsible use of your data.

We’re working with a number of leading banks to power their digital transformation initiatives and build towards the XaaS future in the cloud. Find out more about what’s possible with cloud computing.

Banking

WHY BANKS NEED TO EMBRACE WELLBEING IN THE DIGITAL EXPERIENCE

Howard Pull, Head of Digital Transformation Strategy at MullenLowe Profero

The impact of the COVID-19 crisis on the economy has been huge. Over the past six months, youth unemployment figures have dropped, wages have stagnated and GDP has fallen by a record 20.4%. The drop in GDP is worse than the 2008 Financial Crisis, the Winter of Discontent and the Great Depression.

While the furlough scheme and other government measures have provided some much-needed financial support, the prevailing social and economic conditions have made money worries increasingly common. According to a recent survey from MullenLowe Profero, during the pandemic 40% of 18-25-year-olds are afraid to look at their bank account, with a further 40% stating that thinking about their money has a negative impact on their own personal wellbeing.

In response to these rising financial concerns from account holders, it is clear that banks need to help people – especially young people – feel more confident in managing their money. In particular, banks need to provide more educational support to their customers about how they can make the right financial decisions. This means designing tools and support services to enable more people to effectively manage their finances.

With 60% of consumers aged 18-25 believing that banks should help them have the capacity to absorb a financial shock, financial institutions also need to adapt their products and services to meet the needs of more uncertain account holders.

Adapting services, however, is easier said than done. The pandemic has radically shaped consumer behaviours and therefore the old rules no longer apply. For example, while consumers in the past may have preferred to discuss financial matters in person at a bank branch, risk of infection and the widespread use of digital tools has meant that the majority of young people want banks to provide wellbeing services online.

Digital experiences are also important to the future success of any bank. According to MullenLowe Profero’s report, digital experience is now the number one reason why young people choose a bank. Therefore, it is clear that banks during the pandemic and beyond need to reevaluate their operations and shape their personal wellbeing strategies around digital tools.

Community and Global Wellbeing

MullenLowe Profero’s report into financial wellbeing found that young people weren’t just concerned with their own personal wellbeing. They were also concerned about the importance of community and global wellbeing too. In fact, over half of 18-25-year-olds agree that the events of the last few months have made them seek out brands that do better for the world, with another 50% stating that the importance of a local community has increased during the pandemic.

Community wellbeing is concerned with the importance of local areas and the businesses and organisations that are based within them, whereas global wellbeing is concerned about the entire world. For banks, showing support for areas local to their branches and customers as well as issues affecting the globe such as the climate crisis is important to maintaining the trust and support of account holders.

Focussing banks on concerns around community and global wellbeing requires banks to assess their impact on the wider world. In other words, it forces banks to check who they support and where their money could be better placed. For example, young people want to be recognised for their positive behaviours. 56% of 18-25-year-olds want rewards and benefits for purchasing ethical and sustainable products and services.

The findings of the report found that young people across the board want financial institutions to reflect their values and to help them manage their finances. With COVID-19 continuing to wreak havoc on our day to day lives, banks can provide much-needed support by offering educational help as well as creating products and services that actively manage an account holder’s finances. They can also step in and provide support to the wider community and world by taking measures to reward ethical and sustainable behaviours.

Banking

IMPROVING THE BANKING EXPERIENCE THROUGH INFORMATIVE AND ENGAGING VISUAL COMMUNICATIONS

Javier Lopez, General Manager Vertical Solutions, OKI Europe Ltd

Banks play an integral role in daily life. However, everyday opportunities such as attracting new customers into branches to open an account, or promoting new offers and services to existing customers, can be lengthy, expensive and cumbersome processes – especially when tailoring communications to the specific requirements of each branch, or differing customer needs.

Quickly creating and adapting in-branch visual communications to communicate and educate cost effectively while remaining on brand can be a challenge, especially for banks that have networks of branches and print their visual communications centrally or use third-party suppliers.

Building trust through signage

Visual communications can help build trust and satisfaction between you and your customers. The ability to create and print personalised communications on demand can not only instil confidence in your brand, it can also offer the flexibility to quickly adapt to financial trends and fluctuations in interest rates. This is particularly important in today’s volatile market, so that you can keep your customers informed while remaining competitive.

Javier Lopez

Printing in-branch and on-demand is an immediate and cost-effective way for banks to communicate with customers. With the right printer on-site, branch staff can easily create and print signage and customer communications as well as everyday documentation to a professional quality as and when needed. This saves on the cost of third-party suppliers and eliminates lead times for essential signage.

The ability to print a comprehensive range of collaterals in-house including freestanding and hanging banners, posters, self-adhesive floor and window stickers, as well as personalised leaflets and direct mailers, can help keep customers informed about the latest services and offers. It can also be used to remind both customers and staff to adhere to social distancing guidelines. Furthermore, the same printer can be used for day-to-day documents such as personalised mortgage or loan offers.

A message that sticks

As the world adjusts to a new normality, OKI Europe Ltd recognises the challenges banks face when encouraging social distancing and has teamed up with Floralabels to offer free* social distancing media and artwork to create self-adhesive floor stickers that can be printed quickly and easily from an A3 colour printer such as the C800 Series. Floor stickers can help ensure customers maintain safe distances while queuing at counters, kiosks and ATMs. The free stickers include self-adhesive floor circles (285 x 285mm) and rectangular floor banners in two sizes (215 x 900mm and 297 x 1,320 mm) with various designs and messaging options to choose from.

Achieving ROI with a do-it-all device

When it comes to printing in-branch, implementing a printer with unrivalled media flexibility will provide the best return-on-investment. Not only will the bank be saving on printing and delivery time and costs, it will also save on storage space or potential wastage as well as offering the flexibility to be more reactive to market trends in a timely manner.

OKI’s multi award-winning C800 Series A3 colour printer is designed to take up a minimal footprint and will supply everything from 1.3m metre hanging and freestanding banners to posters, self-adhesive floor stickers, window stickers, leaflets, flyers and much more on a diverse range of materials. Featuring OKI’s pioneering digital LED technology, the C800 Series delivers professional quality results, at high speed and on-demand.

Banks are vital to helping people and businesses prosper, supporting economic growth. Investing in cost-effective do-it-all devices that enable the fast rollout of eye-catching, professional quality collateral will help banks and their customers thrive.