It’s Not About Scale or Speed — It’s About Customers!

To transform digitally, one must create new products, as well as, transform existing ones to suit the changing business priorities. Successful digital transformation hinges on the ability to unlock the enormous business potential of customer experiences for a bank. Any strategy which focusses on engineering superior customer experiences for banking leaders is the right step towards successful transformation.

Microservices – an IT model that breaks down slow-moving, monolithic IT systems into multiple small independent services that are highly decoupled and self-contained – has grown to become a vital asset for financial services companies on their digital transformation journeys.  This model is increasingly used by large organizations who have a technological appetite to fuel their growth hunger. According to a research report, the microservices market is estimated to grow to be a $32 billion by 2023. This claim is validated by another survey report which suggests 87% of the respondents are using or considering multiple technologies for developing microservices and 92% of the entities that use microservices noted an increase in the total number of instances they are running.

While the banks are upbeat about adapting the architecture, there are a set of challenges that come with this evolution, some of them are –

Culture– Changing the core architecture of an enterprise needs a buy-in from all the stakeholders from within the organization. It is important that a reorganization happens with amiable people come together to chart a plan and execute to avoid any disastrous scenario.

Managing Microservices – As the number of microservices increases, managing them gets more challenging. According to this survey 29% of the respondents, are facing difficulty integrating with other applications or platforms. This could prove to be a monolithic challenge for the banks, since there are too many moving parts in the software architecture of a bank. This challenge could be overcome by implementing in-house tooling and subscribing to the right platform.

Time and resources- 56% of the respondents have expressed concerns over costs and 53% were concerned on finding and retaining skilled talent. Another survey suggests involving vendor SMEs early on in the transformation cycle will immensely help. Ideally, banks should choose a vendor who is able to conceive and apply digital for banks in the context of customers, their journeys, and the various experience points across these journeys.

Fault Tolerance – It is important that individual services do not bring down the overall system. Fault tolerance at the service level, and more importantly, at the overall solution level, is critical. Given the complexity of a microservices environment and the complex dependency chains, failure is inevitable. Microservices need to be able to withstand both internal and external failures. Robust resiliency testing is key to successful issue preparedness.

The set of challenges could be intimidating for certain organizations. So how to decide on when to transform to a microservices based architecture? Here is a suggested checklist,

• If the bank does not have a tight deadline; microservices require you to research and architecture planning to ensure it works.
• The organization has a great team with knowledge of different programming languages.
• The bank potentially has a few development departments (irrespective of their geographic locations/time zones).
• If the bank has an existing monolith app and see problems with parts of application that could be split across multiple microservices.

Banks like Monzo have built themselves purely on a distributed and microservices based architecture. They currently run an active datacentre which avoid failovers and relies on a SME vendor which ensure data encryption and features that are compliant with the laws of the land. Experience Engineering brings together the art of reimagining digital transformation by applying the rigorous science of architecting unique customer journeys.  Monzo bank, notably is enabling superior customer experiences which are powered by next-gen technology practices.

Similarly, a customer of Maveric Systems – a large global bank with its key operations in Singapore achieving the business vision of realizing faster disbursement of unsecured loans for its ecommerce customers by successfully partnering with us, in building E2E digital experience by creating microservices for instant account opening, seamless payments/loans etc. with our deep understanding of banking domain – cutting across sub domains, products, technologies, processes and workflows.

Microservices is the future and if the global banking organizations execute their strategy in the right way and along with a right partner, there are a multitude of benefits.

• Greater agility with faster time to market
• Enhanced security, since services can be isolated and a security breach does not necessarily threaten an entire application.
• Continuous integration and deployment
• Improved scalability
• Higher developer productivity
• Easier debugging and maintenance
• Enable developers to change and re-deploy software without fear of compromising the core application.

Today’s customers choose their banks by the customer experience it can offer. In a digital world, only the companies that are digital-first and customer-first can survive. We at Maveric, Conceptualise banking operations with all associated technologies and methodologies (Agile, DevOps, Cloud and Containerization) which are designed keeping customer adoption in mind are a great way to craft a success story, and as they say well begun is half won! So, has your bank well begun?

Microservices have been the talk of the town for quite good reasons. Almost every big organizations like Google, Amazon, Netflix has adopted this architecture style. But the question arises what makes microservices the need of an hour?

Let’s go back to the traditional way when organizations used the monoliths approach and try to recall a few of the hurdles which we came across while doing development, deployment, debug, bug fixes, and scaling the application which will ultimately guide us to our quest on why we need microservices.

One of the common scenarios in today’s development world is a gradual decrease in the performance of the application with incremental usage even after adapting to microservices. This could be due to more data to fetch and process, heavy load on one the services which reduce its response time, network latency to name a few.

To make it easier for you, let’s take a closer look at how microservices are making complex processes into simple and easier ones.

Microservices: The foundation of today’s enterprise application:

According to Martin Fowler, the software guru “a microservice architecture consists of “suites of independently deployable services” organized “around business capability, automated deployment, intelligence in the endpoints, and decentralized control of languages and data.”

In simpler terms, it means microservices architecture is easy to build, maintain, and can be broken down into small pieces if required. For instance, when your business grows then managing a single architecture can be a hassle task especially when different stakeholders are involved.

But with microservice architecture, you can easily divide the application into distinct independent services that can be easily managed by different developer teams without impacting the work of other stakeholders.

Here is another example for your understanding:

Do you remember the traditional way where there is a huge code base of a web application that serves numerous business functionalities with scattered references all over? Now to enhance any one of it, the first step is to find where all it has references, then analyze what impact it can make to current functionalities.

Not to forget for deployment, prepare instruction with all the related files. Now let’s add one more realistic scenario to it, given from the list of above files few common files have bug fixes for other business use cases.

Whereas in post-deployment let’s assume one of the bug fixes has resulted in another bug. There are two solutions to it either revert all the changes (this includes pull out the enhancement and other bug fixes as well) or fix the issue and test the entire application end to end with the outage.

But when it comes to the scaling part, since the code base is huge and the need for scaling arises for a single popular functionality, it means resources won’t be used effectively.

Now, let’s imagine the same with microservices in place.

All related functionalities and files are in one place, this reduces the effort to zeroed down the changes required and impact analysis. However, the Bug fixes file may or may not go to other files depending on the nature of functionality but certainly, it will be assured no two unrelated fixes are getting served from the same file.

I can create different builds for different fixes or enhancement as it would be less tedious this time. In advance, it’s known which file to open to debug and last but not the least scale the popular module only!

But one has to keep in mind that microservice has its own set of challenges which is constantly getting evolved in terms of design patterns, we will talk about it in some other blog.

Advantages of Microservices:

There are endless advantages of microservices that have attracted many big enterprises to adopt it. Compared to more monolithic design structures, microservices offer:

1. Can scale up or down the services as per requirement very easily and minimum configuration.
2. Services are responsible only for one task.
3. Asynchronous calls, no need to wait for a response
4. Replay or re-fire the events in case of failure as events can be stored.

Moving ahead with Microservices:

In REST way of calling a microservice from other binds the two tightly and hence the after-effects. What if it just publishes the required info and other services which needs it simply consumes.

Now a day there are many event-driven frameworks are available and make entire development very easy in terms of retry, replay, and event tracking comes out of the box. When has to understand the fact that the way application development is evolving, there will be a continues to fight whether to go for microservice architecture or leverage traditional monolithic way.

Before switching to microservices make sure to wisely evaluate what we can live within an application, its obstacles, and which technology or pattern should be used, etc.

Again, like coin has two sides, this also comes with some cons, managing transactions across services are not easy and need efforts to track it properly (further read: Saga pattern). Also, Kafka or Rabbit MQ can act as a single point of failure and before processing events sometimes they have to be stored somewhere in the database/cache which can lead to redundancy at times.

So, for smaller or mid-sized enterprises, microservices can be an easy and quick way to implement whereas the big companies with millions of users are the ones that can hugely benefit from it, as they need to ensure the uptime, scalability that the added modularity can provide.

For a bank, successful digital transformation hinges on the ability to unlock the enormous business potential of customer experiences. In today’s age of Open Banking, Digital channels, agile transformation, and cloud adoption; engineering superior customer experiences for banking leaders is the right step towards successful transformation.

What does this ‘experience engineering’ depend on?

Experience Engineering brings together the art of reimagining digital transformation by applying the rigorous science of architecting unique customer journeys. Crafting superior digital experiences mandates proven domain expertise as well as the ability to engineer with open source and hardened technologies.

Further, it is important to understand the two levers that make experience engineering deliver in varied scenarios – conscious contextualization and comprehensive competencies. While both of them merit their individual expositional pieces, suffice is to say, that conscious contextualization is the ability to drive ‘domain led digital’ initiatives (canned product and customer journeys, Simplicity in design principles etc.) and comprehensive competencies engages with the whole notion of ‘re-imagining digital delivery’ (pre-built accelerators, ready to deploy DDR models etc.

This article purposes to draw attention on rapid prototyping and its various aspects. It finishes by detailing how it leads to accelerated creation of better banking products.

On the face of it, rapid prototyping, is a long-endured design principle. Spoken in straightforward terms, rapid prototyping validates, tests, and builds a better product by using customer insight and feedback.

While off the shelf products have a role to play, it is the custom software that financial organizations, leverage today to differentiate in a saturated market through higher efficiency, better user experience, and deeper data driven insights.

All said and done, designing digital products are hardly simple. Often there are limiting circumstances that most corporations encounter in some degree or the other.

• There are matters of strategic alignment with C-Suite that can be long drawn in the absence of demonstrated interests from internal or external customers.
• IT departments often battle attention issues, as their focus fluctuates between supporting critical business operation and harnessing market trends.
• And, successful product delivery demands participations from diverse skill sets – user experience design, web and mobile engineering expertise, quality assurance, dev. Ops market, user testing and the like.

In the described scenarios, rapid prototyping then becomes an essential step in creation of innovative products and services.

Irrespective of complexity and depth of challenges being solved, Rapid Proto typing is first and foremost, governed by speed.

The faster resources and requirements are sourced sooner, can the industry differentiating services be developed. Second criteria that ensures higher proto typing success rate is the degree of collaboration between key stakeholders. The last governing principle for prototyping is the iterative in-built feedback cycles that validates assumptions. This ensures product evolution continues before a significant commitment of time and money is made.

Finally, to round of this article, is a broad detailing of the involved steps in a proto typing exercise.

1. Lean requirements workshop – The core team workshops and engages stakeholders, customers, designers and engineers in a collaborative environment where technical and user requirements are captured through story mapping, persona analysis, affinity mapping, prioritization and release planning.
2. Ideation – The story map is converted into a detailed backlog, and the teams ideate by creating low fidelity wireframes (sketches that capture workflows and rudimentary user experience). Stakeholder consensus is sought.
3. Engineering Expertise – In parallel, engineering teams deep dive for integration spikes that validate available APIs, establish data structures necessary to support core features, and other areas of technical risks.
4. Interactive Prototype – By combining Interface Design with the wireframes, the team rapidly builds an interactive prototype that leverages work completed in all previous steps. Back-end engineers feed data into the front-end application. Prototype is presented to stakeholders for the second review.
5. Fidelity checks – Once satisfactory quality and features quantity is prototyped, the platform can be exposed to a select audience of customers that are presented with various tests.

Be it an interactive mock-up or a fully functional data-driven application, Rapid prototyping brings a similar host of considerations – Definition of an MVP (minimum viable product) including its estimate, and a detailed release plan with a build strategy.

The advent of smartphones and ease of access to the internet has transformed how consumers interact with businesses daily. The banking and financial services industry (BFSI) is no exception when it comes to shifting consumer behavior and trends. Today, customers demand greater levels of transparency, ease of use, responsiveness, and personalization from banks. Banks are competing head-to-head with Fintechs and non-financial banking organizations of the likes of Google, Amazon, and others. To remain competitive, it has become very important for banks to retain their existing customers. In this scenario, banks would need to go beyond the core banking services and provide a complete banking experience that supports evolving customer needs and the technology landscape.

This is where customer relationship management or CRM comes to the rescue. Overall, CRM improves the customer’s experience by enabling banks to track, assess, analyze customer touchpoints, manage direct transactions, and help in upselling or cross-selling of products. According to Research And Markets, the global CRM software market was valued at $25.5 billion in 2018 and is expected to grow to $36.53 billion through 2022. With a booming industry, we take a look at CRM and its impact on the banking sector.

What is CRM?

Gartner defines CRM as “Customer relationship management (CRM) is a business strategy that optimizes revenue and profitability while promoting customer satisfaction and loyalty. CRM technologies enable strategy, and identify and manage customer relationships, in person or virtually.”

Traditionally, CRM was used to improve the sales and marketing efforts of an organization. But as we delve deeper into digital commerce, CRM applications are focusing on delivering better customer experience and service across channels. CRM in banking is similar to other industries, albeit with its unique set of challenges. Namely, organizational readiness, legacy systems, fragmented data sets, quality of data, data security, technology skill-gap, and integration of modern CRM with other banking systems.

Impact of CRM in the banking domain

Overcoming the manual challenges of customer data collection, modern CRMs are helping banks acquire a holistic view of their customers and keep an eye on essential key performance indicators (KPIs) for customer experience. A good customer experience reinforces customer loyalty to the banking organization while driving further customer acquisition and reducing customer churn. The key aspect of CRM for banks is the value creation from the data collected from multiple touchpoints. A relationship-based marketing approach allows banks to enhance customer satisfaction, loyalty, and retention rates.

• Development of a customer-centric business modelThe need for CRM in the banking industry stems from a business shift of developing a customer-centric retention approach, unlike the earlier transaction-centric approach. Evolving customer profiles and needs emphasize on delivering products or services around the dynamic customer. The 360-degree view of the customer streamlines operational, marketing, and sales processes that take into account a customer’s spending/buying history, preferences, complaints, and geolocation.
• Personalize customer relationshipThe holistic view of a customer provides banks with actionable insights for marketers/customer management representatives to identify the pain points of a customer on a personalized level. It would be nearly impossible to manually track and follow every customer when you have millions of customers. With a CRM, employees can create highly customized campaigns or communications that are relevant to the customer, reinforce brand integrity, and relay targeted communication around rate changes, new products, rewards/bonuses, and deliver products based on key life events of the customer.
• Delivering digital-first engagementsDigital transformation has pushed banks to develop digital-first banking experiences for customers. Research from IDG states that 44 percent of companies have already moved to a digital-first approach for customer experience. These digital-first banking services are powering the future of financial services wherein customers no longer have to rely on a physical banking location for transactions. Banking CRMs are helping banks to embrace and better deliver their digital initiatives to the customer. For example, ICICI Bank launched its Facebook banking app, Pockets, that allows customers to carry out banking transactions (funds transfer, bill payments, accessing account information, “split & share” and other non-financial transactions) directly on the social media platform.
• Create effective marketing initiativesCRM metrics are crucial for generating reports that highlight customer behavior – from engagement channels to purchase behavior. A report by Gartner highlights that more than 40 percent of all data analytics projects will relate to the customer experience by 2020. These data points help the marketing team strengthen their marketing efforts through proper customer segmentation and develop targeted strategies that improve engagement and retention rates.
• Increase employee productivityMost CRM software comes with a clean dashboard that provides deep insights into customer data on a single screen. Employees no longer need to spend hours of their time assimilating and organizing data as the CRM takes care of it. Menial and repetitive tasks are automated allowing employees to focus on the bigger picture of customer satisfaction. The automated system also lets the bank handle more customer accounts and attain operational efficiency.

Modern bank CRM systems improve collaboration between departments regarding customer issues, sales opportunities, and referrals. For example, Yes Bank developed YCCRM (Yes Bank Collaborative CRM) an in-house CRM platform that enables the sharing of relevant customer information to concerned departments to design new products/services for high-value customers.

In this digital-age, CRM is no longer an option for banks, but a necessity. A CRM effectively allow banks to connect with their customer and build long-lasting relationships that go beyond financial transactions. A well-aligned CRM strategy would significantly improve the bank’s bottom line while increasing customer engagement. For effective implementation of the CRM system, an organizational change is required wherein every department understands the importance of customer service and its impact on the organization.