What's this all about?
In a bid to keep up with the new players in banking, many financial institutions are getting bogged down in the here and now. Their heads are being turned by the latest features rather than focusing on how to be flexible in the future. In the following article, our Head of Product Management Paul Brennan outlines how, by focusing on both form and function together, financial institutions can tackle market challenges and deliver better banking solutions on an ongoing basis.
Read on if you:
- Are interested in different approaches to product delivery in digital banking
- Are curious about the solutions LEVERIS has been quietly developing
- And your bank are getting distracted by the latest ‘here and now’ features
As part of my role at LEVERIS, I am regularly speaking with banks and financial institutions about how they can evolve their businesses to provide better customer and product offerings in a digital world. While they say they understand the importance of constantly evolving and innovating (often referred to as ‘digital transformation’), I find that often these organisations are too focused on ‘here and now’ features rather than thinking more about future flexibility and how to get there.
This is understandable of course; the retail banking market has moved on considerably in the last few years with new entrants gaining significant traction due to enhanced digital customer experience and improved feature sets. A desire to keep up with the competition, allied with the fact that the majority of product managers and business decision-makers are incentivised by very short-term outcomes, shows you exactly why such short-sightedness is so prevalent among the incumbent banks.
When discussing approaches to product delivery in banking, I like to relate it to another discipline in which I take an amateur interest – architecture and design. The great American architect and designer Frank Lloyd Wright once articulated the desired outcome for his work as follows:
Now, this may seem a bit ‘highfalutin’ for a conversation about banking software, but I believe it to be completely relevant. The aforementioned institutions are focused on form but are forgetting about function. The question should not only be ‘how do I get feature x?’ but also ‘how can I get strategic flexibility to rapidly respond to the customer/market need when it occurs?’ These questions should be asked in the same breath.
Wright’s hypothesis can also be applied to the various functions of an organisation. For example, financial institutions commonly see the different elements of their business as separate and not joined together. Compliance and customer UX are a case in point. They are rarely related and generally function in silos. When, in fact, Frank Lloyd Wright is telling us that the function (compliance) needs to be joined with the form (customer UX).
The new market entrants clearly get this and are figuring out a way to deliver better products, services and solutions despite the regulatory burden. They address both in unison.
A Platform that supports both form and function
Technology, of course, has a major role to play. At LEVERIS, we believe that by architecting a banking platform to support the function of rapidly responding to customer/market needs, we are enabling our clients to deliver the form of the platform they require. You can understand more about how our platform supports this function in our whitepaper on software-defined banking.
Of course, the complexities involved in building a full core banking platform from scratch, particularly to enable security and compliance, means it has taken a number of years to get to the point of achieving the desired function.
But by taking this approach, we are really starting to reap the benefits and this has been evidenced in the last six months, where we:
- Delivered mortgage servicing solutions for three clients in a four-month period, all with different mortgage product designs and needs.
- Executed our first, compliant, digital bank in under ten weeks including digital wallet, multi-currency, payments, savings goals and cashback.
- Built out new features at a rapid pace – personal loans have been added to the platform in four weeks and a new AML partner was fully integrated within the same timeframe.
With alignment comes better banking
Decision-makers shouldn’t get too bogged down in the here and now. They should be looking at how beautiful form can be aligned with great functional execution. Once financial institutions can focus on both together they will have the opportunity to not only tackle market challenges but also execute holistic digital solutions for their customers on an ongoing basis.
Although digital banking was far from his field of expertise, I’m sure Wright would have agreed.