Achieving the Digital Banking Customer Experience of Tomorrow

Originally posted on http://www.vmware.com by Jennifer Manry

How do you build the bank of tomorrow? More specifically, how do you build the digital banking customer experience of tomorrow? Yesterday, you may have offered no-fee checking or reduced-APR credit lines. Those carrots no longer motivate today’s customers. Instead, banks must set aside traditional perks and create a customer experience that draws people in and keeps their attention.

This is the paradigm Tara Le Friedman, GM strategy performance & transformation, Commonwealth Bank of Australia (CBA) and Tom Gilbert, head of cloud and middleware, Barclays established at VMworld 2021. I was happy to host them as we discussed how financial institutions can build a digital banking experience for tomorrow’s customer.

During the session, “Banking on the Cloud – Fast Path to a Digital-First Business,” the two transformation experts shared insights into what it takes to truly transform and what they learned along their journey.

Customer satisfaction begins with internal transformation

Though we think of digital customer experiences as mobile banking apps or customer engagement portals, the real magic happens behind the scenes. In fact, financial services institutions must build the customer experience from the inside out, beginning with the employee experience.

Barclays managed to pivot its entire workforce, including employees on trading floors and in contact centers, to a work-from-home setup overnight. The instant move to a new arrangement would have been impossible without technologies available in public and private clouds. The bank now uses its data centers more efficiently, improving the performance of its private cloud.

CBA simplified its IT operating environment, in part by decommissioning many of its legacy assets. It has also set cloud milestones. The bank moved 44% of its compute power to the public cloud. Its target for the end of this financial year is 66%.

Giving employees the digital tools they need to succeed introduces a popular buzzword: business agility. With resources in the cloud, IT can more easily set up remote desktops or provision new users for a software platform. Because employees can transition from the office to their living rooms or request additional compute resources seamlessly, they are better able to respond to external customer demands.

Transformations bring new customer experience features and functions

They also lower the cost of processing and storing data that fuels modern customer journeys. Moreover, the cloud allows for increased automation, which reduces human intervention and lowers the risk associated with constant software changes. Benefits like these empower institutions to offer new digital banking features, functions and enhancements faster, more reliably and at a reduced cost to customers.

What might it look like for a banking app to create a brilliant customer experience like customers see in the other apps they use? It all comes down to personalization and convenience. For example, consider offering proactive monitoring of spending to alert to unusual transactions, suggestions for alternate products that help customers improve the quality of their finances, or automated investing suggestions.

It doesn’t make sense for a digital banking app to provide new daily content for users as if it were a breaking news platform. However, banks of tomorrow must create tailored customer experiences for both online banking platforms and physical bank branches. For example, Tom shared with me that Barclays is proud of its mobile app.

Among the various mobile app features is a Barclays app ID. This feature sends identity verification notifications to the customer each time they visit a bank, shop online or interact with bank representatives over the phone. App ID boosts customers’ confidence, because they can be positive they’re interacting with a real Barclays representative and that their financial information is safe. Additionally, app ID is quick and easy to use, so it enhances security without hindering convenience. Features like this help deliver an integrated experience to customers that drives engagement and keeps pace with changing customer needs.

Prioritize prior to cloud transformations

Transforming banking infrastructure is not as simple as moving some data to the cloud. Banks must determine which infrastructure pieces are best suited for the cloud and which apps to decommission, which to migrate and which to leave as on-premises offerings. During our VMworld discussion, I learned that CBA and Barclays have taken a similar approach to prioritizing their transformations.

For either bank, transformation begins with execution factories. Execution factories are constructs that allow IT teams to repeat patterns and activities that improve the speed and efficiency of given tasks.

One of CBA’s key factories was a rehost migration factory, which guided the bank as it migrated 3,500 VMs from on-premises to cloud environments. Barclays used an infrastructure modernization factory. The constructs provided by the IT team are helping the bank shift 2% of its traditional compute power onto the private cloud each month.

Both spokespeople recommended factory implementation to our viewers. They also shared the following takeaways from their modernization experiences:

Banks have thousands of apps and tens of thousands of servers. It’s impossible to modernize this backlog all at once, so prioritization is key. Decide on prioritization criteria, such as risk, cost, efficiency or carbon footprint.
Translate modernization efforts into actionable plans based on these priorities. Align modernization goals with business unit strategies and goals.
Ensure business goals improve the customer experience. Will modernization efforts help reduce settlement time or provide services faster or more cost effectively to customers?
Whatever the decided prioritization criteria, go after transformations that offer maximum value, first.
Don’t go this alone. Modernization is a complicated process and requires expert leadership. Find the right people and consult organizations that have modernized for advice.

Banks of tomorrow must reimagine the customer experience

I believe in change with a purpose. The banking industry needs to reimagine product and service offerings. Their purpose? To create a differentiated customer experience. This experience must keep pace with constantly changing customer needs and integrate digital and physical interactions. To build these unique and engaging customer experiences, banks need benefits the cloud offers. Transformations that introduce agility give banks the power to shape experiences and meet demands. Only through the transformations of today can these institutions become the banks of tomorrow.

Watch the full recording of the session, “Banking on the Cloud – Fast Path to a Digital-First Business” below: