With no apparent letup in the regulatory and public scrutiny facing Britain’s legacy banks, a new breed of banks are luring corporate and personal customers away with niche propositions. Attractive savings rates, named managers, great service and seven-day branch access – the options are widening almost daily. As conventional banks are forced to focus on more pressing issues, these challenger banks are quietly picking away at their peers' traditional market, nearly doubling their share of retail lending, including mortgages and unsecured loans, in the last three years.
It is a development that has left many insiders asking whether large institutions have the right structures, operations and systems in place to meet the longer-term competitive threats posed by these emerging banks.
The challengers are lithe, resourceful and unencumbered by older established processes and routines, free to harness technology without the overhead of legacy systems. A key competitive advantage is, therefore, their ability to create agile and flexible customer-focused operations. For traditional banks, a customer-centric approach creates major demands on their legacy line of business systems (LOB) and processes, originally designed for internal access, with limited connectivity and rarely intended for customer interaction.
What are the options available to these banks and how can they create a framework that satisfies the needs of a wide range of customers – from hyper-connected Generation Y to baby boomers, and everyone in between? Customers demand and expect ever higher levels of service and value. Social channels add further to the mix, offering the customer the ability to communicate openly about their experiences, often to the exclusion of the bank involved.
Compliance, regulation and legislation compromise traditional business models, with technology presenting itself as a key differentiator in both front and back-office processes. Fast and effective operational manipulation of ‘big data’ is critical, providing key customer insight and experience analytics, to help shape the business vision and strategy.
It is in such environments that enterprise content management (ECM) solutions come to the fore. By providing an agile middleware layer of renewed functionality, user productivity may be boosted by the elimination of application switching and the automation of costly manual tasks. With increased transparency into documents, information and processes, executives and managers can gain improved visibility into the status of projects and processes. For staff, the need for arduous and expensive training is dramatically reduced, boosted by accelerated user adoption.
Take for example a traditional mortgage management solution. More often than not, this requires input from multiple sources, possibly paper, email, telephone calls, in-house account details, with the mortgage clerk expected to know and access multiple systems. As every single system that touches the customer needs to be updated, it becomes a manual process of re-keying information many times, a process that is both time consuming and error prone.
The ECM strategy allows the bank to go beyond simple data retrieval, where customers may provide the initial data electronically via an eform, a mixture of electronic and paper documents or even as a transferred file from the account transfer agency. Data can be captured simply; auto-filled and indexed across legacy systems; updated and linked to relevant documentation stored within the ECM.
Legacy banks will face growing pressure, from several quarters, to reshape their own operations and processes. By creating a greater focus on harnessing existing systems, through the introduction of renewed functionality, banks can more effectively meet the needs and expectations of the customers of tomorrow, without the need for new systems, specialist IT consultancy, developers and support.