Crealogix: put the pedal to the metal - Thomas Avedik
With financial institutions increasingly focused on customer interaction, the role of online and mobile services is evolving. Thomas Avedik, CEO of E-Banking at Crealogix, discusses how these platforms can be used to understand consumer behaviour, and the importance of aligning technological innovation with effective business processes.
Every customer makes a personal decision about when to use online or offline services. For a bank, this not only puts pressure on the quality of its internet-based products, but also requires an interchangeable system. This is the only way for a bank's advisers to stay informed about customers' online activities and provide targeted support. Thomas Avedik of Crealogix sees this as the foundation for a real competitive advantage in tomorrow's financial industry.
What technological innovations are you expecting to see in the near future?
Thomas Avedik: Innovation cycles have shortened. In the past, the emphasis was primarily on the banks' internal processes, with customers only partly benefitting from the rapid developments taking place. But leading financial institutions are now showing signs of a new quality of customer-bank interaction. This is not driven by a single technology; rather, it is the interaction of developments such as mobile banking and changed customer behaviour. The customer is increasingly deciding the place, time and form of interaction with his or her bank.
Does this generate new revenue opportunities?
Two phrases are key here: hybrid advice and personal finance management. In future, the branch will not necessarily be the main place where advice is provided. Depending on preference and situation, the customer and their adviser will interact on the telephone or online, or may meet in person. Studies show that there is a marked increase in new business being concluded over the internet and a decrease in typical branch activity. Banks will have to adjust to this.
Can online platforms also cut costs without impinging on compliance requirements?
It has been repeatedly proven that open and modular solutions can cut costs and increase efficiency. They create the necessary scope for easy and flexible communication with the customer. Contrary to popular opinion, they can also be cheaply and quickly integrated into existing environments without having to 'rip apart' the back end. Banks can quickly respond to new compliance requirements, benefit from simpler maintenance and save on the further development of standard products.
Are many banks investing in these sorts of developments?
Regardless of the innovation that a bank tests, future developments must focus on the customer. The investment budgets of many banks are under great stress from massive regulatory requirements and known historic problems, which leaves little space for other projects. Some banks are, however, consciously using this situation to their competitive advantage and purposefully investing in further development of the digital bank instead of renovating a branch. These banks are the forerunners in an evolution towards closer customer proximity and service quality. It is therefore worth staying on the ball.
How can banks use technology to achieve greater profitability and growth?
Our Bank 2.0 product initiative lays the foundations for this, helping financial institutions use the digital channel more profitably. This requires solutions to shadow what is known as the 'customer journey', rather than being subject to the existing, rigid banking processes.
Do such technological innovations help banks gain a real competitive edge?
Technology does not create a long-term USP. The speed of development is meteoric and quickly turns advantages into commodities. Our experience with direct banking customers in Germany has proven this.
A USP is sustainable only if it consists of a combination of technology and business processes. The design of Crealogix products is very flexible, partly because adaptation is so essential. This allows even medium-sized banks to keep pace and quickly update their products.
How can banks start to utilise these technologies?
Our Bank 2.0 products help banks with customer value management and take away the customer adviser's monopoly as the sole point of contact. In general, management would be well advised to increasingly address customer behaviour and preferences. This means business taking over the controls, not IT. Banks that optimise their digital offering increase customer retention. It has been proven that active users of e-banking stay loyal to their banks for longer.
Where would you drive forward innovation in global banking systems?
My basic advice would be to break away from the typical, 'monolithic' way of thinking. There is no 'one size fits all'. If, in future, you do not pay constant attention to the front end, if you do not choose best-of-breed products, customers will think you are boring and leave. The distinction lies in the interplay between customer, technology and customer adviser.
What does a forward-thinking and innovative banking system look like?
Such a system would completely focus on the client, and be very flexible and outward looking. It would also be characterised by an innovative, exceptional front end, and a stable, standardised and efficient back end. All systems would be linked to each other as flexibly as possible, using modern, open interfaces. The motto would be 'Good is not good enough'.
What are the key challenges facing innovation managers in banks at the moment?
There's no way round it: management must be continuously focused on technology as an enabler. Front and back-end development does not occur at the same pace. Consideration must be given to the different speeds.
Innovation teams should concentrate on evaluating the most expedient products and integrating them as quickly and efficiently as possible. It is management's role to focus business correctly. Given the rapid rate of inflation, this requires a high level of expertise.
Any final thoughts?
We are seeing the major banks, and some cantonal financial institutions in Switzerland, looking in detail at the online channel. Many have already introduced interesting enhancements, and others are about to launch them soon. A similar thing is happening in the international environment; banks' competitors have caught up, and even partly overtaken them.
In recent years, the majority of Swiss banks have been cautious. But the starting shot for the next round of innovations has been fired. Now it's time for banks to buckle up and put their foot down.