We live in an exciting Open Banking Era. In today’s landscape, the forces influencing personalized retail banking, come from the ease with which transaction data from user end accounts is getting aggregated.

For a bank, to successfully transform digitally, depends on the ability to unlock the enormous business potential of customer experiences.

An October 2018 Mc Kinsey analysis based on the S&P global market intelligence, reports that out of 50 largest global banks, three out of four now pledge themselves to some form of a customer experience transformation.

It is hardly surprising then; digital banking teams are keen to digitize the entire customer life cycle. They want to cut costs and offer convenience by enabling customers to research, buy, and manage loans, bank accounts, savings, and investments through digital touchpoints.

What does it mean for the industry?

For innovative financial organizations – high street banks, digital-only players, specialist lenders, or non-bank brands – engineering superior customer experiences for banking leaders becomes the right step towards successful transformation.

Experience Engineering brings together the art of reimagining digital transformation by applying the rigorous science of architecting unique customer journeys.  

And, experience engineering begins to make sense when canned customer journeys are of the highest quality and are available on an ongoing basis.

Canned customer journeys are the dynamic repositories of customer touchpoints and personas collated and developed across long swathes of time (often across multiple decades).

A customer’s banking relationship includes key journeys that range from on-boarding and transacting to maintenance and problem resolution. Effective transformations must not only recognize the complexity of these relationships but must also make a priority of the parts of the experience that matter most—to manage the cross-functional, end-to-end nature of customer needs rather than deferring to existing organizational structures.

Having established the primacy for companies to think of customer experience as a series of individual touchpoints, let us take the discussion deeper.

Namely shifting from touchpoints to the entire journey – or in other words, inculcating the ability to see the world as customers do.

Let us begin by asserting that, customer journeys are more than Touchpoints. They include many things that happen before, during, and after the experience of product and service. Journeys are long, stretching across multiple touchpoints and channels, and lasting days or weeks.

In today’s multi-touchpoint, multichannel, always-on, hypercompetitive consumer markets, the explosion of potential customer interaction points—across new channels, devices, applications, and more—makes the consistency of service and experience across channels almost impossible—unless you are managing the journey

Touchpoints on the other hand, are a way for organizations to maximize productivity and scale economies through functional units.  They are wired for transactions, not journeys.

So for banking transformations that necessarily depend on creating (and leveraging) customer journeys, what is the way forward? What kind of ecosystem partners will successfully help banks bring an edge to their digital transformations?

For a bank, here are the multiple steps, a transformation partner, needs to be an expert on.

• Step back and identify the nature of the journeys customers take—from the customer’s point of view.
• Understand how customers navigate across the touchpoints as they move through the journey.
• Anticipate the customer’s needs, expectations, and desires during each part of the journey.
• Build an understanding of what is working and what is not.
• Set priorities for the most important gaps and opportunities to improve the journey.
• Come to grips with fixing root-cause issues and redesigning the journeys for a better end-to-end experience.

If you were to read these pointers again, there is one compelling demonstrable skill set that rises to the surface: D-O-M-A-I-N

More often than not, financial organizations are simply not naturally wired to think about the journeys their customers take. Thinking about customer journeys—instead of traditional touchpoints—requires an operational and cultural shift that engages the organization across functions and from top to bottom.

Finally, articulated simply, the ability to conceptualise and develop superior customer journeys for a banking player, hinges on a deep understanding of the banking domain – that cuts across sub-domains, products, technologies, processes, and workflows.

In today’s open banking economy, this piece situates an analogy between the varying levels of acceptance by the market players.

Open banking is the sharing and leveraging of customer-permissioned data by banks with third party developers and firms to build applications and services, including for example those that provide real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities.

While open banking allows third parties to develop better personal finance management applications, it places pressure on incumbents to improve their own offerings. Open banking services cultivate competition in the banking industry – forcing existing players to either enhance their financial services or partner with Fintechs.

A quick roundup of three prominent banking organizations, will help draw our attention to the current seriousness attached to Open Banking.

BBVA: In 2018, BBVA launched its BaaS platform, Open Platform, in the US. Open Platform utilizes APIs that allow third parties to offer customers financial products without needing to provide a full suite of banking services.

HSBC: HSBC launched its Connected Money app in May 2018 in response to the UK’s open banking regulations that attempt to place more control of financial data into the hands of consumers. Connected Money allows customers to view various bank accounts as well as loans, mortgages, and credit cards, in one place.

Barclays: Barclays claims to be the first UK bank to enable account aggregation inside its mobile banking app. Its open banking feature allows customers to view their account with other banks within Barclays’ mobile app.

Open banking has the potential to increase revenue streams while expanding customer reach for financial institutions. It creates revenue-sharing ecosystems, where incumbents give customers access to third-party-developed services while profiting from a subscription or referral basis.

Led by the PSD2 legislation in the EU and the UK, few markets have already taken the lead by creating and passing their own open banking regulation.

At the same time, there are a growing number of markets where – even absent of regulation – open banking is taking hold. These markets, in Australia, Canada, New Zealand, Mexico, Argentina, Nigeria, Hong Kong, Japan and Taiwan, for example, are also moving in the Open banking direction.

Understanding the rapid uptake of open banking approaches and models, is only a matter of time, as financial organizations, decipher its unparalleled customer value. We see quite a few firms in advanced stages of testing, prototyping new use cases, and operating models that leverage application programming interfaces (API’s).

A key part of the present Open banking narrative hinges on the ubiquity of API’s.

What are API’s and why are they important?

APIs are a set of codes and protocols that decide how different software components should interact – they essentially allow different applications to communicate with one another.

APIs are necessary for the functionality of Banking-as-a-Service (BaaS) – a key component of open banking. BaaS is an end-to-end process that connects Fintechs and other third parties to banks’ systems directly through the use of APIs.

So be it, comparison services, know-your-customer, auto savings and credit scoring to name a few, or use cases being commercialized into functional solutions, all these activities call for API’s.

Customers are beginning to understand and assess value of their data, and their expectations will in time start to influence products and offerings – most banks, will have little choice but to shift towards more open models.

Additionally, regulations or not, customer demand and shifting expectations will drive increased adoption of open banking models, and so will the customers look for seamless and intuitive value-added banking experiences. It is a virtuous cycle.

Longer term, be it Singapore or the US or the developing economies of the LATAM, open banking is poised to bring fundamental changes to the industry.

The moot question for the day, then becomes: How will the Banking firms demonstrate readiness for digital transformation that embraces Open Banking?

– Start by uncovering new areas of opportunity for future growth and value

– Build trust with customers as a safe and secure data holder

– Locate niche areas of expertise and develop unique products and services

– Partner with accredited open banking partners to create better economies of scale.

As banks start to expand their ecosystem in order to better serve customers, the ability to quickly and effectively connect to partners, data and systems will be key to organizational agility.

In the described open banking scenario, what specifically are the digital transformation partners, expected to bring to the table? 

Apart from demonstrating A-level banking domain expertise, digital transformation partners of the future, will have to necessarily highlight their ability to craft superior digital experiences with both open source and hardened technologies

Open Banking 101

After struggling to manage the growing issues of unbridled monopolizing of rules and regulations of the banks, the UK Government in 2016 first issued the Open Banking system. It was set up by the Competition and Markets Authority on behalf of the Government to bring more competition and innovation to financial services.

Open banking allows third-parties and fintechs to systematically, securely, and radically change the way they access the financial information of the account holders through their APIs to build new apps and intelligent management services along with greater financial transparency across all their investment and savings platforms.

It culminates the sense of competition amongst the big players in the banking sector, coaxing them to innovate their financial services and make them more customer-centric, disrupting the customers’ financial transaction experiences for the good.

Open Banking and the World

“The UK leads the way in adoption, but international interest in Open Banking is starting to build in the world’s other leading economies.” ~EY: Open Banking Opportunity Index

As the UK pioneered the Open Banking system, the world followed suit with accelerated adoption in both developed and developing countries like the US, Japan, South Korea, India, Australia, and many others. While each country’s framework for the adoption of Open Banking system may differ, it can be typically characterized in two approaches:

• Market-driven approach: Most countries including the U.S. and India, have not been asserting compulsive adoption of Open Banking regimes and instead, are promoting digital innovation and encouraging fintech companies to build unique data-sharing solutions. In fact, India was amongst the first ones to identify the need for Open Banking systems and became an early adopter and promoter of the same. The success of the platform named PayTM, became a fitting example of how India embraced Open Banking and is moving rapidly towards a more collaborative and transparent financial service environment for the service providers and the customers.
• Regulatory approach: On the other hand, a few countries including Hong Kong and Australia have opted for a more structured and regulatory-driven approach for systemized migration from traditional banking to Open Banking.

Open Banking and PSD2: What’s the difference?

Most times Open banking gets confused with the EU’s Payment Services Directive or PSD2. The major difference between Open Banking and PSD2 is the Open Banking system mandates the adoption of the open standard by only nine major banks offering current accounts in the UK, the EU’s PSD2 envelopes all financial third-parties to set-up open APIs defined by the market.

Another major difference is that PSD2 mandates the banks to extend their APIs to third parties, while the Open Banking ensures that the sharing-format stays standardized.

However, the differences do not matter as both the directives are aimed towards a singular goal of transforming traditional banking practices into digital ones, enabling easier, faster, secured, and more transparent control to the account holders over their money. For banks transforming to open banking, PSD2 is only the preliminary stage of evolution. Maveric provides end-to-end PSD2 solutions to banks across the EU and the UK and helps them achieve PSD2 compliance smoothly.

The Voluminous Effect of Open Banking

With 8 out of 10 financial firms willing or planning to adopt Open Banking, a PwC report suggests that, by 2022, the Open Banking sector might quadruple its worth to generate £7.2bn of revenues.

These are just estimated figures with many experts suggesting a greater hike in the numbers as more and more countries explore the potential of this approach to financial services.

How will it benefit the industry, the service providers, and the customers? Let us decipher this by studying the key advantages that Open Banking offers:

Digital Identity and Onboarding

The current KYC and onboarding processes are complex, cumbersome, and time-consuming. Using Open Banking, the customers will be able to create a trusted and permissible digital identity that can be authenticated digitally, eliminating the painstakingly long onboarding process.

This framework could create a trusted adaptable digital identity, where customers authenticate themselves digitally, thus removing a key pain point in the onboarding journey.

From the point of view of the businesses, establishing a trusted digital ID to enable the exchange of data will allow the businesses and financial institutions to create better experiences for the customers. A collaborative approach towards enriched digital identity also reduces the chances of cyber thefts and frauds through collective risk management and more controlled data sharing.

Personal Finance Management

Open banking extends the account holders the ease of control over their finances, empowering them to make more informed decisions to manage their accounts and investments. With the benefit of access to their multiple accounts in one place, they will have a more transparent view for improved comparison between service providers.

Credit Facilities: Loans, Mortgages, Credit Cards

Improved transparency and single platform control facilitate the account holder to make faster credit decisions with the availability of more competitive deals to choose from. The system of Open Banking also aids in getting or refinancing a loan a lot easier as the account holder can just permit the lenders to access their digitally recorded credit history and make a valuable offer to them.

From the financial service providers’ view, they do not have to dig in through a lengthy physical process of credit customer profiling as everything is recorded and accessible online for them to review.

SME Finance

When you are an SMB, you may need to undergo rigorous processes to obtain loans in a traditional banking scenario. Through the Open Banking system, the report submission and accounting books review can be simplified as the lenders can just obtain the necessary and updated data from your banks and online accounting system.

Wealth Management

Open Banking brings enhanced tools to service providers to create new solutions offering their customers with options for better financial decision-making via just-in-time education and guidance for investments and savings. Based on the information acquired through data-sharing, the advisers and wealth managers can offer proactive and better solutions with higher chances of conversion, making it a win-win for both parties.

The Roadblocks in the Way of Implementing Open Banking

Migration from legacy systems: Shifting from legacy systems and traditional practices would require undivided attention and a huge initial investment to build robust structures for Open Banking as their current systems are complex and highly interdependent to serve all their needs and their successful integration into open standards may take a lot of time. The aversion to change and risks associated with data-sharing and security are other reasons why most banking and non-banking financial institutions may be delaying their transformation to Open Banking.

Security and data confidentiality concerns: The biggest hurdle in realizing the potential of Open Banking is the privacy and security of customer and analytics data. There is no doubt that Open Banking empowers the customers by placing greater control over their data in their hands, however, the increasing scenarios of hacking, cybertheft, malware, etc., have put the security of online data in jeopardy. The open APIs will be more susceptible to target by fraudsters or hackers, and so highly robust and secured systems will have to be set-up to meet such challenges and effectively operate in the digital environment.

Rising above the market competition: After successful transformation from legacy systems to Open Banking infrastructure too, one key challenge for the banking and fintech companies is to retain their customers and grow their clientele. With Open Banking offering the customers the benefit to unify and manage all bank accounts or financial experiences from one place, it allows the user to directly compare the offerings, prompting them to make a switch from their current banks. So, it becomes imperative for the banks and the fintech companies, dealing with financial services, to innovate and offer better services and have greater promotional and engagement strategies to keep the customers satisfied.

Future of Open Banking and How It Will Impact Our Lives

Will the customer embrace Open Banking? Well, it all depends on winning their trust. In a recent survey, 9 out of 10 customers indicated a moderate-to-low level of trust in data-sharing, the main component of Open Banking, due to their concerns over privacy, forgery, and cybersecurity.

For Open Banking to strive and thrive in the future, the fintech industry as a whole will need to come up with better solutions to win over customer trust. The country’s regulatory authorities will also play a huge role in establishing the ground rules and standardized frameworks for the financial service providers to deal with. Once the trust is won and the digital ecosystem becomes truly secure, the advantages of Open Banking will shine better and will enable the customers to manage their finances faster and more intelligently, eliminating the need to engage in complex systems attached to traditional banking.

To conclude

If you are an upcoming or an established fintech company looking to embrace the Open Banking system, superlative tech talent is your foremost need to develop a robust digital infrastructure to operate in. At Maveric, we conceive and apply digital solutions for banks in the context of customers, their journeys, and the various experience points across these journeys. Our PSD2 solution makes open banking easy and secure, with some compelling features including banking system integration, strong customer authentication, regulatory reporting, third-party aggregator management, fallback mechanism, and more. Maveric brings an expert and diversified team that offers leading-edge solutions for innovative digital transformation journey to businesses in the financial services domain.

The blog was originally published on MEA Finance

Do you remember when did you last heard about digitalization? Probably almost every day. Because digitalization has brought a new dimension to every business including our day to day life. This has grown as a huge driving factor among organizations. They have realized the fact that to be ahead of their competitors and to provide a seamless experience to their target market, they have to revolve their business function and technology around it.

Virtually every organization on the planet has worked systematically to reinvent its business processes for the sake of speed and efficiency. To understand this better, let’s first understand how top technology companies around the world are operating? How they are having an excellent turnaround time? How they are gearing up with new tech innovations? Let’s start with this how.

How businesses are optimizing their journey?

There is no hidden fact that multiple technologies are needed to handle different parts of the business process. And to make this business process work smoother, many organizations are now built on a concept called “platform” which integrates the full spectrum of next-generation automation capabilities. That means now organizations don’t have to adopt different tools and technologies to handle different parts of the process. However, now they can quickly design a platform-centric solution that integrates next-generation automation capabilities.

That’s not all. It also downsizes human interference which in turn saves turnaround time that is involved in handling multiple tools and processes.

For instance, Reliance Jio, a telecom service company, is pushing its branding as Jio Platform , and the entire business model is around the same platform. Similarly, global brands like Amazon has two platforms: business integrator/sales platform (amazon.com/amazon.in) and Cloud platform (AWS), whereas Microsoft had moved most of its products and service to Cloud platform (Azure), Uber / Ola – Taxi aggregation platforms, Flipkart (Walmart) – business integrator/sales platform.

So, questions arise why we can’t use a similar platform approach and enable end-users (Developers, testers, business users, etc) to have easy access to the resources they need for automation and the platform can take care of servicing their automation needs.

According to a Forbes Global Insight survey “When asked about the untapped opportunity within their organizations, more than three-fourths of senior executives said 60 percent or more of process work could be automated while nearly one in five said 80 percent or more”.

So, what stops them in automating their businesses. Well, everything that seems simple comes with lots of challenges. I have often heard from CIOs talking about the adoption of DevOps, and chaos occurs due to different teams implementing their tools, own process, and conveniently try to create their model which in turn makes it a huge task to convince and move them to an integrated way of working.

Choosing the best solution for your business

Before choosing a platform-centric approach you have to understand your end-to-end process and automation implementation from the start. However, if you are looking at implementing a single strategic platform to facilitate the automation for everyone in the enterprise, including App development, testing, IT operations, Business operations, etc., then make sure that this adoption is done across departments so that business can work seamlessly.

According to my view, the following are the list of attributes appropriate while building an enterprise automation platform:

1. Facilitate Low Code/No Code automation (Model-based rather than code-based)
2. Workflow Orchestration (Drag & Drop process elements applicable to the function)
3. Template-driven process rather than relying heavily on customization
4. Flexible Configuration Management with robust security mechanism for access control
5. Intelligent & automated execution and rollback mechanism
6. Easy to access and use (similar to how you access amazon or Flipkart to buy a product)
7. Easy to identify problems (Transparent and easy to access progress logs, dashboards, telemetry)
8. Support for hybrid cloud, multi-cloud, or on-prem integration
9. Integrate to tools of your choice (both open source and commercial) and users can include them as part of process orchestration (for example, in Azure DevOps – each task you build in the pipeline can be associated with a tool of your choice to execute that task efficiently)
10. Transparent & Consumption-based cost model (similar to cloud platforms).

Outlook

The speed at which digitalization is becoming an integral part of every business, the need for a platform-centric approach is growing. Though it downsizes human involvement but the cost involved in all these integrations is huge. Therefore, organizations that don’t have a sufficient budget or those who already have some kind of automation should not adopt this approach.

However, it also depends on many factors like organization structure, offerings, management, process, etc. So, what do you think? What is your strategy to build such a platform? Share your thoughts.

As If the non-digital businesses needed any more incentive, the COVID pandemic is here.
All businesses must go digital.
Connected devices flourish today – 30 billion IoT endpoints are available today and will reach 80 Billion + by 2025.

Digital businesses that are already blurring the physical and digital worlds are a time-sensitive critical paradigm creating competitive advantage through new offerings, new business models, new customer experiences, all enabled by agile relationships.

According to IDG as part of its 2019 digital business surveys reports key findings. Decision-makers across 700+ companies were surveyed, each with an employee size of 14,000 or more.

• 95% of start-ups have digital business plans compared to 87% of traditional enterprises that were founded 50 years ago or later
• 55% of start-ups have already adopted a digital business strategy compared to 38% of traditional enterprises.
• 62% say delivering an excellent customer experience as measured by customer satisfaction scores defines success as a digital-first business.
• Start-ups can increase revenue by 34% relying on digital-first strategies; other enterprises increase revenue by 23%.
• Big Data/Analytics (58%), mobile technologies (59%), private cloud (53%), public cloud (45%), and APIs and embeddable technologies (40%) are the top five technologies already under mass implementation.
• 49% of IT executives confirm the Internet of Things (IoT) plays a key role in their digital business strategies.

It is understood that adoption will only rise in 2021 and beyond, but it is worthwhile to consider ‘what’ a Digital-Business means to the many.

Does digital business exist for meeting customer expectations, or does it enable worker productivity (through mobile apps, AI-assisted automation), or does it assist in managing business performance through data availability and analysis?

There are no wrong answers here because the term – digital business – also includes digitally modifying business processes, developing new revenue streams, and achieving top-line growth through new digital or data-driven products and services.

Following the footsteps of mainstream adoptees mentioned in the survey, are five digital technologies that pilot and prototype in the background. As discoveries come to light, these are arguably covering up new ground and already command our interest. These are Artificial Intelligence, Machine Learning, Internet of Things, Software-defined networking, and Software-defined storage.

The usage of the term ‘digital’ is indeed ubiquitous.

Changing tracks let us highlight critical areas that digital transformations promise to alter.

In a business irrespective of the organizational function the digital transformation targets – Research, Development, Execution, Integration, or Maintenance – the big underlying question never changes. It is:

Are my digital transformation efforts radically changing my customer experience?

It is neither a simplistic answer nor can it be answered in the binary.

To answer the question with a reasonable degree of balance requires leaders to step into deeper terrains. Furthermore, this deep dive perforce calls for an examination of associated strategy areas. Namely,

• Are the digital transformation journeys domain-led? Said another way, are your digital efforts consciously contextualized to your industry, sector, customer set, and their unique pain points?
• Are your digital investments guided by customer journeys (which are an assimilation of dynamic repositories of your customers’ touchpoints and personas)?
• When it comes to service delivery, customers are increasingly adopting digital channels. Does your domain expertise translate these adoption insights to digitize end to end customer journeys with distinctive omnichannel experiences?
• Does your organization draw advantages from rapid prototyping and agile-first methodology to accelerate the creation of MVP (minimum viable product)? Being able to do this collapses time to market and overall development costs.

All the above-mentioned aspects constitute what can be termed as, ‘Experience Engineering’.

How does one define Experience engineering?

Without going into specific details, experience engineering is a discipline that brings together the art of reimagining digital transformation by architecting and optimizing unique customer journeys.

When such transformations are domain-led, organizations can translate their strategic possibilities into cutting edge practice. This impact happens, more often than not, when customer user experiences are leveraged to unlock the businesses’ true potential.

How does experience engineering become a game-changing practice?

Apart from the competitive edge, as an organization embraces digital transformation it benefits from enhanced employee productivity. The innovative mindset consequently finds its way into more efficient internal processes. One culmination point of this positive momentum is in the creation of ‘data-decision-making’ cultures.

In the longer run, measured through enhanced customer experiences and improved workforce efficiencies, it is experience engineering that is at the heart of a successful digital transformation