In 2020, CGI leaders met face to face with 1,400 business and technology executives for in-depth discussions on their priorities, spending and investment plans. In retail banking, we had conversations with 111 executives across the globe. Sixty-five percent of these interviews took place after the pandemic declaration, providing insights into evolving trends. We summarize the findings from these discussions on our Retail Banking CGI Client Global Insights page.
This year, the COVID-19 pandemic put pressure on retail banks to invest more in digital channels as the primary access point for interacting with customers to meet their evolving demands mid- and post-pandemic. In this blog, I provide six recommendations for driving greater results from digitization in retail banking based on our 2020 CGI Client Global Insights.
- Combine agility with digitization to win more customers and improve the customer journey
With the closure of bank branches and customer service staff disruptions during the pandemic, retail banks face the challenge of maintaining a superior customer experience. Launching and enhancing digital channels for customers is a business imperative. In fact, executives cite increasing customer adoption of digital as their top trend for 2020. To achieve this, business agility is critical.
- Simplify products to make them “digital ready” and redesign product development processes
- Forge partnerships within the API economy, and use APIs to speed up time to market
- Adopt delivery approaches that encompass the needs of both customers and employees
- Invest in human centred design and agility at scale
- Maintain a balance between risk and cost
Of course, adding digital channels is like adding doors to a house; you create more ways to get in. Further, when you add doors, you need locks to protect the assets inside. The same is true for new digital channels; you need to protect both the channels and related data. Retail bank executives cite cyber threats not only as a top trend for 2020, but also cite protecting the bank as top business and IT priorities. It is critical to strengthen bank security, which, in turn, builds customer trust.
- Adopt a holistic security approach across people, processes and technology
- Take a “zero trust” posture across the entire enterprise
- Conduct security evaluations from the standpoint of what a system can be made to do (versus its intended use)
- Monitor and balance cross-enterprise security and accessibility
- Conduct ongoing security training that combines practical challenges and threat assessments
- Rethink the branch experience for customers and employees
The bank branch is at the heart of the customer relationship, particularly in terms of key “life event” products, such as secured loans. The pandemic disrupted this critical customer touchpoint, forcing temporary and even permanent closures. Now the future of bank branches is uncertain. We believe some retail banks will seize on the pandemic to accelerate branch closures, while others will view the branch as even more valuable. It is critical to determine the branch’s future course.
- Augment telephone contact with video to add a face-to-face element
- Re-assign branch employees to customer-facing roles
- Move away from in-person, transaction-based services by offering more online digital, self-service options, and using the branch for higher touch, “life event” services.
- Find the right balance between using technology like rich video consultations and providing in-person services, including relationship or appointment-only models
- Develop a holistic data approach to drive agility and actionable insights
Harnessing data to generate customer and business insights continues to be among retail banking’s top business and IT priorities. Indeed, executives say predictive analytics will be the second-highest area of innovation investment within the next three years. Business agility requires a data-first approach, including an understanding of a bank’s key data stores, as well as the consistency, accuracy and timeliness of its data. Here are key ways to get the most from data.
- Develop a holistic data approach with tools for validating, verifying and correcting data
- Invest in systems integration and data alignment to ensure a holistic view of data
- Analyze data to identify ways to serve customers better and drive business value
- Make timely and relevant data-driven recommendations for customers
- Implement a framework for measuring innovation investment ROI
Successful innovation is a key advantage within banking as a whole, and even more so within retail banking. Indeed, many view retail banking as the most innovative given the diversity of its customers, delivery channels and competition. The good news is that 52% of retail bank executives measure the return on investment (ROI) of their innovation investments, compared to 48% across other banking segments. Clear KPIs and defined business outcomes are required for successful innovation.
- Develop a framework for setting, measuring and tracking KPIs
- Invest in culture change management
- Capture positive lessons from the pandemic and reapply those to future programs
- Embed change management practices into projects
- Adopt best practices from other industries and use trusted partners to transfer knowledge
- Create a more resilient technology supply chain
The pandemic highlighted the importance of having a resilient technology supply chain to manage unpredictable demand surges and breakdowns in traditional processes. Reengineered technology supply chains should provide agility, elasticity, security and resilience by managing core products and services in more cost-effective ways and adjusting to real-time changes in demand. Lockdown lessons will help banks examine weaknesses in their technology supply chains and accelerate their pre-pandemic plans for smarter use of automation.
- Evaluate your ecosystem of partners and suppliers
- Examine your technology roadmap and move toward greater adoption of automation and chatbots to improve the customer experience at a lower cost
- Turn to smart managed services to achieve cost savings, free up resources and improve business agility
While the pandemic has created many challenges, it also serves as an opportunity to drive business agility, strengthen cybersecurity, rethink the bank branch, optimize data, increase innovation, evolve supply chains, and more. CGI works with retail banks globally to help them rebound and reinvent. Contact me to learn more about the CGI Client Global Insights and our framework to help clients rebound and reinvent through the phases of the pandemic.