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Customer relations: how cloud contact centre solutions have taken over the banking sector

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By Dominique Toubin, VP Channels & Alliances, Odigo

 

Although the banking sector is mainly known for its retail banking business, it can actually provide myriad other services such as consumer credit, business savings, car rental, electronic banking, etc. As such, this sector should not be looked at in one dimension, but rather in the plurality of its businesses. A natural consequence of this is that there is a need for diverse customer relationship management. While this can be a challenge for many businesses, the right technology and know-how, such as contact centre solutions (CCaaS), can help cover all the needs of this industry.

The evolution of retail banking under the impulse of digitalization

In the early 2000s, the banking sector was mainly known for its radical digitalisation of retail banking. This transformation had a direct impact on the number of bank branches, and due to the widespread use of online banking, their numbers are constantly decreasing.

At the same time, banks are positioning themselves as being capable of offering a simple and fluid experience, centred on digital channels. However, it goes without saying that retail banks will have to go further to sustain their business models. According to recent forecasts from Exton Consulting’s prospective report, which looks at the evolution of retail banking by 2030, the profitability of its activities will be undermined by new banking players. The historical resilience of traditional banks is fast becoming a distant memory. It is therefore urgent for retail banking to rise up to meet its four biggest challenges: bank pricing, loyalty, digital marketing and customer experience.

A diverse customer relationship and solutions

One of the main services banks offers is the dual handling of customer relations in both in branches and contact centres. However, the solutions used are often varied and misaligned between branches, contact centres and back offices, which impacts the quality of customer service. It is therefore in the interest of banks to use so-called “scalable” solutions, capable of covering all the needs of the banking sector, such as retail banking, consumer credit, insurance, car rental, etc. in a uniform manner. These solutions must be designed to benefit customers and their ever-evolving needs as much as the branch advisors.

In addition, most banks have set up multiple ways to communicate with their customers. However, banks need to be able to quickly identify a contact and provide contact centre agents with all the relevant information about the customer in real time. Once identified, the customer should be sent to the agent who can best respond to and support their request. Contact centre solutions (CCaaS) can significantly help facilitate customer identification and provide agents with a real-time profile of the customer and their context (VIP, preferred channel, current requests, history of interactions, etc.). Once this information is coupled with customer segmentation rules, contact centres can implement the most relevant routing strategy possible.

The role of the bank advisor in the quality of customer relationships

Banks need to be able to manage a large number of interactions, whether in the branch, in the contact centre or in the back office. Often, they are seeking to rationalise the number of telephone numbers, emails and accounts in order to simplify customer access to their services. However, to do this, they need to have a holistic view of the customer, and the only way to establish this is through an omnichannel approach.

Banks need to be able to automate calls that are of low priority, in order to free up advisors for tasks that are of high priority. Through integration with presence management tools (Teams, Jabber etc.) agents can be integrated into the same contact centre management solution. This means agents can manage phone calls and emails when they are not in a physical appointment. And when they are busy, calls can be distributed according to business and segmentation rules, either in the branch or in contact centres, in order to optimise productivity and customer satisfaction.

Overall contact centre solutions add value for banks by providing services that can be accessed from anywhere, at any time, and through a variety of channels. This omnichannel approach is prompting banks to reshape their customer experience in favour of digital.

Banking

The Future of Capital Markets: Democratisation of Retail Investing

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Nicky Maan, CEO of Spectrum Markets

 

Over the past decades, global capital markets have undergone tremendous changes. There have been significant technological advancements as well as a radical overhaul of regulation both in terms of the universe of new requirements and their enforcement regime. Those paradigms, however, aren’t the only ones that have changed at the outset of this millennium. A baby boomer generation is about to retire and enjoys the bequest of pay-as-you-go pension systems in many countries plus the financial heritage of the post-World War II generation who had saved most of their money. While the impressive global welfare development of the last 50 years is undeniable, next generations have to get used to a much higher degree of uncertainty and a much stronger need for self-determination in many aspects, including personal finance.

The Covid-19 pandemic is an often-cited incidence when it comes to explaining the significant growth of retail investing. While it certainly had an accelerating effect, it’s not the sole reason for the increased participation of retail investors in capital markets. Rather, it’s a development that’s been in the making for some time now, with digitisation playing a key role as the enabler of the unprecedented level of access the retail investor enjoys today.

The rise of modern, user-friendly apps has made it easier than ever for individuals to get involved in trading. At the same time, retail investors’ level of sophistication has increased significantly, thanks to a higher level of financial education and a much more demanding attitude. They have a much better understanding of overall market mechanisms and are seeking a broad range of trading features once reserved for professional traders. This is true also for investment products that are more sophisticated, like securitised derivatives.

The emerging class of retail investors is heterogeneous, with distinct motivations, investing behaviours and financial goals: by participating in the capital markets, they can take ownership of their financial future, not only to ensure retirement and long-term financial resilience, but also to improve their socioeconomic status. Retail investors across the world have been flocking to financial markets in greater numbers over the last few decades, as the value of assets has trended upwards and the opportunity to grow wealth has been made available to a broader population. New companies are using improved technologies, innovative platforms and services, and products to widen access.

In this context, maintaining investor engagement and trust in capital markets has become more crucial than ever. The need to cater for the demands of retail investors is driving innovation and the development of investment solutions that benefit everyone. The impact of this trend – also referred to as the democratisation of investing – is no longer being ignored by the industry.

While this shift is creating a new era of financial empowerment and stability, it also presents new challenges that must be addressed. Moreover, despite all the significant progress, there are still gaps in investor protection, information reliability, personalisation, and financial literacy, that prevent retail investors from fully obtaining the benefits of the capital markets. To tap into the full potential of retail investing, the industry must build a responsible and sustainable ecosystem, leveraging technology and innovation to address these challenges and provide retail investors with the tools they need to achieve their financial goals.

To better understand the implications and solutions for a more responsible retail investing ecosystem, access, education, and trust are the critical components[1]. First of all, retail investors need access to investment solutions that are outcome-oriented and easily accessible. Alternative investments, such as private products, should be made available, but with a focus on responsibility and sound financial practices. Secondly, education must be tied to financial health and investment and retirement planning, providing practical, actionable information. Companies and policymakers must approach financial education in a way that resonates with retail investors to provide a general understanding of why and how to invest. Finally, trust is paramount in the capital markets, and the industry must work together to build and maintain it by providing access to reliable information and being transparent about performance, data breaches, and fees.

In conclusion, the capital markets are undergoing a fundamental shift, one that requires the financial sector to adapt quickly and proactively. Retail investors are driving this change, and it is crucial for the industry to better serve and support these individuals by leveraging technology to help bridge the gap and provide individuals with the tools they need to achieve their financial goals.

[1] Source: report by Accenture and BNY Mellon on the retail investing market: https://www3.weforum.org/docs/WEF_Future_of_Capital_Markets_2022.pdf

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Banking

How poor data governance is crippling banks

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By Philip Dutton, CEO and Co-founder of Solidatus

 

It may have started ‘Dear [Chief Executive Officer]’ and ended ‘Yours sincerely’ but the tone in swathes of a letter from the Bank of England’s Prudential Regulation Authority (PRA) to UK-based banks felt more in keeping with a note from an angry headteacher to the parents of a wayward pupil.

Delivered earlier this year, the seven-page document (PDF) contained instructions on a wide range of topics including credit risk, operational risk and resilience, model risk, and financial risks arising from climate change. And the message was loud clear: banks need to get their houses in order.

As CEO and Co-founder of Solidatus, these subjects are closely aligned with my areas of interest.

Phil Dutton

But, along with a few paragraphs on data, the section that really caught my eye focused on risk management and governance, something that, when done right, mitigates the risk of fines and creates money-making or money-saving opportunities – but we’ll come the specifics at the end.

Part of a wider discussion on financial resilience in the letter, it’s something the issue has been bubbling under as an unresolved going concern ever since the global financial crisis of 2007 and 2008.

 

Global problem

And that’s the thing: while these frustrations were aired by the Bank of England, this is a worldwide systemic problem. Yet despite warnings from regulators, banks continue to fall short on data governance regulations, the Bank of England’s intervention simply being the latest piece of criticism of their approach to risk management, data governance and production controls for regulatory reporting.

Effective governance ensures that data is consistent and trustworthy and doesn’t get misused. It should be a priority for any organisation dealing with wide-ranging information across multiple systems, particularly in regulated industries. But it’s a disturbing reality that most banks have inadequate standards, resulting in weaker security infrastructure, poor decision-making and lack of compliance.

So why are most banks so reluctant to invest in improving their data governance standards, preferring to take a more reactive approach and waiting until they’re pulled up by regulators?

In this article, I go on to suggest answers to this question, setting them in the context of the top data governance challenges banks face, what needs to happen to improve data governance in banks, and whether the PRA’s letter is likely to have any impact.

 

Data governance challenges

The root cause of these problems is that most banks’ governance practices over the years haven’t kept up with the pace of change in technology, the proliferation of data or the number of systems used to hold this data and the ever-increasing set of regulations that create obligations.

Rewind 25 years or so, and a small tech stack with IBM at its foundations would be simple to manage, the flow of data between systems being sufficiently limited to keep track of without tearing your hair out. But those days are behind us, and now there’s a tendency for banks to have their heads in the sand rather than face and respond to the new reality.

This careless attitude could cripple their businesses, either through fines or simply because the data you need to make informed decisions is getting lost in the clutter.

This governance-centred section of the Bank of England’s letter focuses on counterparty risk management, chastising banks that “despite regular messaging from the PRA on the subject, these events [Russia’s invasion of Ukraine and volatility in the nickel and long-dated gilt markets] demonstrated that firms continue to unintentionally accrue large and concentrated exposures to single counterparties, without fully understanding the risks that could arise”. But the problem stretches far beyond this into general business negligence.

At its core, poor data governance presents multiple challenges, including:
• Lack of visibility into your full landscape of data sources, usage patterns and/or control gaps;
• Your suite of tools and platforms not meeting your needs across internal and external stakeholder groups, meaning they’re not future-proofed for an evolving regulatory landscape;
• Implementation of change programmes being slow and hampering strategic business objectives;
• Badly thought-through or non-existent integration of compliance into business processes and controls, with linkage to regulatory obligations; and
• Limited insight into regulator expectations and interpretation of requirements.

The goal is to drive operational efficiencies and risk mitigation. But how?

 

Improving your data governance

Governance is a multifaceted discipline. It boils down to better embedded practices and processes, but these must be combined with the right software solutions, ones that allow you to truly manage the infinite complexity through operational blueprints of active metadata. Leveraging your existing data and systems captured across your bank in context to provide insights from the past to create action plans in the present to achieve the desired future state.

Relying on Excel is negligent and relying on 1st or 2nd generation data governance platforms is no longer acceptable.

Ultimately, it’s taking the first step of data discovery. To do that, you need to:
• Automate the capture of lineage and understand the connections between processes, data, controls and reports to applicable regulatory obligations;
• Connect existing catalog information, such as asset inventories, data dictionaries, processes, risks, controls, and other enterprise taxonomies and/or hierarchies;
• Trace internal risk appetite framework(s) to policies and standards to external regulatory requirements; and
• Link self-assessments, internal audit and external examiner results.

And that means using more versatile software.

 

What will the impact be?

You might be seeing the light, but I’m left asking: will the Bank of England’s letter have a significant impact across the sector?

Well, yes and no. The letter itself doesn’t explicitly lay out what the consequences of non-compliance are. It also only has official oversight in the UK.

To counter that, though, the law is already well known, even if not reiterated here. If you’re not complying, it’s more likely a question of when, not if, the regulators will come knocking. Furthermore, the Bank “will continue to work closely with our regulatory counterparts on these topics”; the UK isn’t an outlier here.

And this is before we look at the sheer increased efficiency of smart data governance. With the right software used well, your efficiency savings can be immense. 90%+ cost savings aren’t unheard of when it comes to mapping and monitoring your data and systems, with the resulting data discoveries you make creating huge opportunities not just to save money but to make money.

So, whether this letter itself has any impact is moot; the world is moving towards an imperative to improve governance regardless.

When better governance also gives you a competitive advantage and improves data discovery, why wait to get your house in order?

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