The banking landscape in 2014 will be transformed by new technologies -and the application of familiar technologies in new places.
SAP’s mission is to help businesses to run better. But what this means, from industry to industry and from year to year, can vary hugely.
Making banking business run better in 2014 and beyond will see banks apply new solutions with an unprecedented speed. The days of projects that run for years before results can be seen and value created are past: to run better, banks have to run faster.
Omnichannel – serving the digital customer
Channels are the face banks present to their customers. Ease of use and speed also play vital roles in effective customer service. Customer actions need to be analyzed, understood and acted on immediately, by the most appropriate channel.
The ideal is a system fast enough to identify issues and opportunities immediately and intelligent enough to contact the customer immediately by the most appropriate method. That could be email, social media, text message, or voice call, with the decision driven by the highest chance of resolution or conversion.
This level of reactivity and connectivity does more than fix problems. Banks aiming to reduce their high street footprint need to understand their customers, and how to contact them. That requires not only connecting multiple systems so they behave as one, but also unifying the data informing those systems.
To win back competitive advantage, banks must be able to offer convenient, consistent and highly interactive omnichannel service to digital customers.
Bringing mature applications to more banks, in more ways
At the application layer, banks are looking for an end-to-end approach, with the functionality of a mature application platform suitable for their specific needs combined with industry-standard solutions for data analysis and regulatory compliance.
Updates to the application platform used by banks need to be configured to translate immediately into value for banking customers, with an emphasis on customer relationship management, electronic banking, mobile banking and digital cash – the services customers demand in 2014.
And, although many financial institutions still want large, on-premise solutions, as in other businesses smaller and younger players are looking for service-based approaches to running their applications. The banking sector is one of the largest cloud markets. 2014 will see even more banks explore moving business and core banking functionality into managed cloud services, with larger banks leading the way
The third trend driving decision-making for banking technology is the advent of real-time analytics. The focus on real-time speaks to the need for speed and, more importantly, simplicity in banking. Initially, value will emerge when real-time analytics are applied to transactional data as a single source. Eliminating redundancy of data will strengthen analytics. Interactive drilldowns will empower decision makers. Banks will transform to become customer-driven organizations. In addition, the power of in-memory computing will return information for strategic or compliance purposes massively faster.
Over time, however, greater value will be found in the ability to consolidate and compress multiple different views of the same data. In proof-of-concept tests performed by SAP, business warehouse stacks in the risk systems were reduced from 200GB to 2GB.
The same compression will make possible true real-time offer management and customer relationships – creating a virtuous circle with the omnichannel trend. Beginning this process, we expect 2014 to see front-end systems and analytics moving to in-memory solutions like SAP HANA.
These three key trends, I believe, will inform the approach banks take to technology solutions – and the approach solution providers will take to banking.
For more on SAP’s approach to these critical trends, take a look at the SAP Solution Explorer for banking.
- Martin Schroter, Sr. Vice President Financial Services, SAP