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A new digital IT blueprint for the everyday bank

Banks can leverage digital to become central in their customers’ everyday lives with the digital IT blueprint.

Overview

In the current banking climate, digital banking is an option banks simply cannot ignore. But integrating digital and physical channels within new operating models will not be easy, particularly when aging legacy and highly-entangled systems stand in the way. Success requires a new perspective of information technology (IT)—one that guides banks toward an agile, digital, legacy-light and dynamic IT function.

Accenture’s new blueprint recommends four steps banks can take to implement the eight components necessary for transformation into an Everyday Bank. By centering on customer engagement and facilitating a broader customer ecosystem of providers, an Everyday Bank can expect five to 10 times the number of customer interactions compared to traditional banks, along with valuable opportunities to satisfy changing customer demands, protect their turf, expand their footprint and grow their business.

Learn more about Accenture Banking.

Background

Thriving in the digital world places new requirements on technology—from managing infrastructure and demand on networks, to increasing flexibility and automation, to using data as a strategic asset and winning the cyber-security battle. IT plays a significant and foundational role in whether or not banks will succeed.

More than just vital to increasing customer interaction and engagement, IT foundations that deliver the digital experience can reduce back-office effort by up to 80 percent, decrease application complexity and improve time-to-market by up to 50 percent.

Owing to the complexity of banking IT and the availability of enabling technology, the IT transformation journey to becoming an Everyday Bank will unfold in two waves:

  • Gradual evolution of core capabilities toward omni-channel with modernization of the overall banking architecture from core systems to data management, unleashing the full potential of a digital, paperless, simple and customer-centered banking experience.

  • Rapid “Copernican revolution” with a more radical adoption of unconventional technologies and architectures (such as new digital products, public cloud services, non-banking digital ecosystems and so forth), similar to what is occurring outside of the banking world.

Banks will need to manage both waves of the journey at the same time, preferably without duplication, guiding IT to converge on a new, ideal position in the digital world.

Analysis

Considering the technology implications and requirements of the Everyday Bank, Accenture has conceptualized a new, structured digital IT blueprint comprised of eight components:

  • Omni-channel front-end

  • APIs

  • Business service integrator/bundler

  • Real-time predictive analytics

  • Transactional factories (straight-through processing)

  • Lean governance

  • Active defense

  • Digital infrastructure

There are several ways banks can implement these components. While total renewal of the entire information system at once is an option—a very onerous and expensive one—our experience helping companies transform their IT environments to become digital businesses shows that a more practical approach is to implement the blueprint using four steps:

  1. Build “Digital Basics” to enable up-to-date sales and transactional offerings across digital channels

  2. Build advanced “Pure Digital” capabilities that are only available in digital channels

  3. Integrate new digital channels with transformed physical operations and analytics to drive an “Intelligent Omni-Channel” experience, providing insight-driven sales and service engagement across all customer touch-points

  4. Integrate financial and non-financial services to deliver the Everyday Bank vision to help meet the customer’s life needs wherever and how ever they interact with the bank

Banks can pinpoint where they are today on this path to determine how to proceed forward.

Recommendations

Banks that manage to become an Everyday Bank can deliver a cohesive customer experience—when and where the customer is—while running innovative, agile and secure IT operations with a lower cost to serve.

Digital-powered back-office and straight-through processing capabilities, for example, can help reduce back-office effort by 80 percent with the remaining 20 percent focused on post-production activities.

Digital-related simplifications can reduce the portfolio of managed applications by 50 to 70 percent (20 to 30 percent from optimizing core applications and becoming adaptive to the customer interaction context while 30 to 40 percent comes from moving all non-core applications into the cloud)—savings that can be used to finance improvements needed in the upper stack.

An open IT architecture for integration with ecosystem partners provides for on-the-fly deployment of new products, services and processes, and improves time-to-market by 40 to 50 percent.

These are just a few of the benefits banks stand to gain by implementing the new digital banking IT blueprint across the enterprise. Banks that do so will ultimately find their place at the center of customer ecosystems, helping customers make critical decisions in their daily lives.