Boosting digital banking while cutting costs

For years, companies have faced a tough decision—invest a princely sum in technology transformation or reduce costs. 

Traditional banks feel pressure to digitally transform and become “banks of the future” something tough in ordinary times, but even harder in a softening economy. But banks that don’t do this rapidly and at scale face irrelevance. Why? Consumers, commercial customers and employees have heightened expectations for their employee and customer experiences. 

To survive—and, if they’re lucky, thrive—in an era filled with increasingly nimble and savvy digital startups, banks have been forced to reevaluate their priorities, leading to difficult choices and tough tradeoffs. Enhance customer experiences or lower costs? Invest in employees or invest in improving technology? 

There’s good news for banks that feel stuck in this unenviable position: You can have it both ways and avoid the tradeoff. It just has to be done right. The key is to break down the silos that have existed since before banks began their digital transformations.

It won’t be easy. Transformation has been historically slow at banks due to their size and complex infrastructures, while current banking environments complicate the creation of differentiated customer experiences. Inside the bank, business processes span departments—affecting other areas of the enterprise, feeding other workflows and involving multiple systems—with humans always working in the middle.  

Breaking down the process silos 

No business process at a bank lives within one technology stack. Banking environments are complex constellations of technology. Core banking platforms and other technologies are not evolving at the marketplace’s rate of change, nor are they supporting the bank in achieving its differentiation goals for customer experience. 

Banks often focus their digital transformation efforts on the front-end engagement layer, making it easy for clients to interact and submit information. But processes break down behind the scenes once work disperses across teams. While front-end engagement is important, it’s not enough to keep today’s customers loyal. 

Consider this scenario: A customer or client wants to change their credit card limit or block/unblock a credit card. This should be a simple request, but due to data silos, the self-service portal is still limited to questions and answers from knowledge-based communities. The self-service portal is reactive and not proactive, resulting in the client having to reach out to support or fill out a request form. This request reaches an employee in the front office who then initiates a manual and disconnected process to address the concern. The onus is still on the client to contact support to resolve any issue. Not good. 

Disconnected teams and systems complicate the most common banking requests, and, in turn, complicate client experiences. When efforts are not harmonized, business is less productive. Even a simple customer request could take days, perhaps weeks, to get resolved. There is no single system of record for each client, which makes it difficult to manage client experiences and drive personalization. 

Bank employees largely rely on spreadsheets and emails to track work, and they must swivel between multiple systems to access information and perform manual process tracking. As a result, the resolution time is longer than necessary, resulting in a poor customer experience. This fragmented architecture fuels poor client experiences, pushing them to reconsider whether their banking relationships meet their needs.  

Here are three ways that banks can renew their tech transformation strategy: 

• Optimize work and processes across the bank. This will help employees do their best work. Apply workflow and process automation to each process. This takes away the remedial work, allowing employees to work on the highest value work, see their contribution and feel that they are putting their best purpose against it.

• Connect everything. The silos between employees, functions and any core system have to go. Now. The essence of this is the fact that different departments can run across multiple transactional systems across onboarding, operations and compliance with a single platform. 
• Create and extend processes with governed, low-code configuration. Using process automation, AI and low code, banks should create new ways of doing work to automate and reduce costs. Banks can reinvest the cost reduction savings into people and low code to create new capabilities that seemed impossible because of the constraints on costs or siloed systems.

Consider this success story: As COVID-19 disrupted businesses worldwide, a well-known bank’s existing manually intensive processes yielded complexity and potentially increased operational costs. Like many of its peers, the bank had manual back-office operations that required employees to individually handle customer payment requests and payment issues. Something had to change, so the company prioritized outcomes. In just three months, more than five payment operations processes were transformed. Meanwhile, nearly 75% of the payment in error process was automated. For any bank, this is nothing 

short of a transformation. By intelligently orchestrating and automating work across existing processes and technologies, banks can create new ways of interacting with customers while streamlining cumbersome processes. Instead of having to decide between investing in digital banking or cutting costs, they can have a win-win scenario.  

Greg Kanevski is ServiceNow’s global head of banking. He is responsible for establishing and executing a global retail and commercial banking strategic roadmap aimed at addressing industry-specific needs through solutions that mitigate historic impediments. 

We offer actionable insights on other customer service-related topics that can benefit banking institutions in the BAI Executive Report, “Keeping the customer at the center of customer service.”