Kofax: Banking’s digital transition - the first mile is no longer the hardest
Becoming a digital bank involves a complex process of transformation and a delicate balancing act between renovating back-end systems while maintaining an agile front end that delivers the new services today's customers demand. Capturing customers' interactions at the interface and linking it seamlessly to existing back-end architecture is essential. Whether it's opening a new account, applying for a loan, paying a bill or depositing a cheque, the business-critical first mile of customer interactions is where the battle is won or lost. Rob Mackin explains why Kofax has the capability to help banks cover that first mile.
The onus on banks today is to compete with service providers in other market sectors where customer experience has reached unprecedented heights. As banks become digital, they must try to reach the standards of service customers have come to expect from the likes of Google, Amazon or Facebook. Developing new, trusted and convenient digital service channels requires capturing interactions and automating processes to create better customer journeys - as well as reducing costs - but this is no mean feat when banks' back-end systems are stuck firmly in the past century.
The challenge most organisations face is that most of the initial information-intensive interactions are manual, complex processes that are time-consuming and prone to error, which can lead to a less-than-stellar customer experience. Maintaining the status quo is risky business. Organisations that make their first mile smarter will have a distinct competitive advantage in this age of the customer.
One approach is to consider the critical first stages of customer-data capture and process automation solutions that not only make the customer experience at the front end slicker and more convenient, but also route the information captured seamlessly into core banking processes. These are the first-mile solutions that bridge the gap between 21st-century channels and banks' complex legacy IT infrastructure.
It is common knowledge that banks are dealing with increasingly complex business environments created by the growing burden of regulatory requirements, inefficient organisational compartmentalisation (silos), and entrenched legacy information systems - all of which make it more difficult to orchestrate key customer-facing activities.
Tighter government and industry regulations designed to protect consumers and curb fraud are partly to blame, adding a raft of new requirements around information gathering, document verification, and fact-checking during key customer facing processes. While these verifications and checks may be necessary, they typically complicate and lengthen the customer experience.
Big banks, big customers
It's no secret that banks, credit unions and other financial institutions are all looking to improve liquidity, restore investor confidence, increase customer retention, be more competitive and address regulatory compliance. Today's customers expect ease-of-use, self-service, fast response times, collaboration and process visibility - from any device, anywhere.
"Our goal is to make that first mile of business smarter and we are having a lot of success with clients in the city. The next generation of customers won't entertain the notion of going into a branch to fill out a form for a mortgage or loan application," explains Rob Mackin, vice-president for software and solutions UK and Ireland at Kofax. "Our system offers multichannel capability and we are agnostic to how a transaction is initiated. It could be by letter or it could be through a mobile application. Our unique feature is that we can take any kind of initiation process straight to the back end."
A culture of continuous innovation
Customers expect to connect with their bank around the clock through a multiplicity of channels and devices. Face-to-face to be sure, but that's only a start. They also want online banking right from the start - as well as mobile banking via smartphones, tablets and other devices. Offering a full range of channels for banking customers can complicate customer-facing processes. The key is to figure out the optimal mix of channels and services that maximises the customer experience while meeting regulatory requirements and controlling costs.
Kofax has a long history of reinventing itself to keep its core areas of expertise relevant to the rapidly changing world in which its clients do business. Almost 30 years ago, it built a name in the market for scanning software, providing systems that enabled customers to scan documents for archiving purposes. This evolved into the capability to scan information directly into business processes and, in the banking space, this became part of an automated system for the opening of new customer accounts.
"We have a big historical footprint in retail banking. The automation of processes brought the cost of opening a new bank account down from more than $65 (£41) to less than $30 (£19). In today's world, when new bank customers are less loyal than in previous generations, people move around between banks every six to 12 months, because they are looking for the best interest rate, for example. Automating new account opening to take three days instead of six increases revenue for banks that might only have a customer's account for 180 days. That kind of service kept us busy for many years," says Mackin.
"For one of the biggest banks in the German-speaking world, we are initiating a mobile-payments solution. We are building an application that enables end users to take a photo of an invoice using a mobile phone to start and end-to-end payment process. The device does a virtual rescan and enhances the image. The customer just has to validate it and it goes to the back-office software to initiate payment," remarks Mackin.
"Our competitors have point solutions in areas like scanning, but for smart end-to-end processing, there is very little competition. We bring smart processes to the point of origination and there are many ways in which that can be used. Mortgage applications and insurance claims are just two examples. Instead of getting a whole pile of documents together, you can scan them at home."
Get on board
In the UK, customer onboarding is a big issue and Kofax enables orgainsations to make it simpler for customers - and more cost-effective for banks - to open new accounts. These solutions are also making inroads into the mobile payments sector by enabling customers to simply take a photo of a cheque to deposit it in their account.
"We have expanded the first mile to cover any interaction that customers might have with their bank," says Mackin."Our aim is to enable our clients to make it easier for their customers to do business. We must ensure that transactions are completed without any break in the process. In the banking sector, we see the need to complement end-to-end solutions with fraud protection, e-signature and e-authorisation capability, so we are investing in that, too."
Linking dynamic front-end customer interfaces to legacy systems in a secure and reliable way is something every bank is trying to do, and Kofax has developed a suite of applications that enables data to cross that divide being systems of engagement and systems of record.
With the battle for customer loyalty intensifying, financial institutions are seeking solutions that can adapt to an industry landscape marked by changing customer preferences and tightening regulatory requirements.
By incorporating multichannel services with process automation that align to their unique business models, banks can deliver services that scale to their business, control costs, and deliver a truly satisfying customer experience.