SEPTEMBER 2021 Transforming the Banking Experience Through

SEPTEMBER 2021

Transforming the Banking Experience Through Digital Growth

Prepared For:


© 2021 Aite-Novarica Group. All rights reserved. 1

Table of Contents

EXECUTIVE SUMMARY ................................................................................ 3

INTRODUCTION .............................................................................................. 5

METHODOLOGY ................................................................................ 5

THE RISE OF DIGITAL-FIRST BANKING ................................................ 7

BANKING BEHAVIOR HAS FOREVER CHANGED ................ 7

SHIFTING HOW CONSUMERS USE CHANNELS .................. 8

DRIVING THE BANKING EXPERIENCE IN NEW WAYS ...... 9

TRANSFORMING THE BANKING EXPERIENCE ................................ 11

BALANCING THE CUSTOMER AND EMPLOYEE EXPERIENCE ......................................................................... 11

CREATING VALUE IN A VIRTUAL ENVIRONMENT ......................... 16

BUILDING A CONNECTED BANKING EXPERIENCE ........................ 17

REINVENTING THE BANKING EXPERIENCE ...................................... 18

CUSTOMER CENTRICITY IS THE CATALYST .................................... 19

MINIMIZING RISK DURING TRANSFORMATION.............................. 20

CONCLUSION................................................................................................. 22

ABOUT SERVICENOW ............................................................................... 23

ABOUT AITE-NOVARICA GROUP ......................................................... 24

CONTACT ........................................................................................... 24

AUTHOR INFORMATION ............................................................... 1

List of Figures

FIGURE 1: DIGITAL BANKING USAGE .................................................... 8

FIGURE 2: CONVERSATIONAL AI USAGE .......................................... 10

FIGURE 3: INFUSING INTELLIGENCE INTO THE CUSTOMER AND EMPLOYEE EXPERIENCE .............................................................. 12

FIGURE 4: USE OF AI ACROSS THE LOAN STAGES ...................... 13

SEPTEMBER 2021




FIGURE 5: BANKING TRANSFORMATION INITIATIVES HAVE ACCELERATED ................................................................................. 18

FIGURE 6: CUSTOMER CENTRICITY AS THE CATALYST TO TRANSFORMATION ....................................................................... 19

List of Tables

TABLE A: AI USE CASES ACROSS LOAN STAGES ......................... 14

TABLE B: RISK MINIMIZATION CHECKLIST ....................................... 20



Executive Summary Transforming the Banking Experience Through Digital Growth, commissioned by ServiceNow and produced by Aite-Novarica Group, explores evolving customer banking preferences, how to transform the customer experience, the obstacles a financial institution (FI) will need to overcome to truly transform, and the risks associated with doing so.

Key takeaways from the study include the following:

• Digital banking usage has reached critical mass. Five in 10 consumers indicate they have logged into their financial account using a desktop, laptop, or mobile device at least once a week.

• Digital will become a facilitator of customer communication and will merge the branch, contact center, and digital experience through the use of technology—knocking the bricks off the mortar while infusing human help in the digital channels. That means FIs will have to determine what role branch and contact center agents play in the future and in what ways they will interact with customers.

• If the pandemic has taught us anything, the flexibility to quickly react to market changes can make or break even the best strategies. Digital-first has shown consumers better, quicker, and faster experiences. These put the spotlight on inefficiency. FIs need to invest in technology solutions that allow them to quickly configure or reconfigure processes and supporting workflows to react to customer expectations and market dynamics.

• Transformation begins with putting customer needs and priorities at the center of the design—customer-centricity. As FIs build experiences around customer needs, they need to determine if they should build experiences themselves or work with technology companies to help foster innovation and improve their go-to-market effectiveness.

• Artificial intelligence (AI) will transform the banking experience for FI customers. With vast amounts of data about customers at their disposal, FIs can deliver real-time service through any channel, while application programming interfaces (APIs) are able to connect data and systems to obtain access to customer information (from FIs’ systems or trusted third-party sources) and streamline operations.



• As FIs start to transform the banking experience, they need to reduce risk, including operational risk associated with running legacy solutions, increase agility to be more responsive to their customers and changing market conditions, generate better insights, and be better equipped to cope with the amount of data that’s presented to them.



Introduction The branch has lost its crown as the primary channel customers use for everyday banking activities. While this is good news because serving customers in digital channels costs less, many banking executives worry that they will lose the opportunity to engage with their customers and, with that, the opportunity to earn a customer’s trust and build loyalty. While the industry has been focused on settling into the new normal, it is beginning to see that it also needs to prepare for the “next normal,” which means figuring out how to build, cultivate, and manage consumer relationships in what is now a digital-first environment. It is becoming critical to inject human help into the digital channels. FIs will need to create a well-balanced customer experience centered around digital becoming the hub of customer interactions. Near term, FIs need to determine how to transform the experience by replacing customer engagements that occur in a branch or contact center with improved experiences through the digital channels. Long-term, FIs that do not embrace a digital-first strategy will suffer, as this is the go-forward way for FIs to allow customers to manage their finances in their preferred environment while connecting with them in new and meaningful ways.

This white paper explores evolving customer banking preferences before the COVID-19 pandemic, new banking behaviors created during the pandemic, how to transform customer experiences, the obstacles an FI will need to overcome to truly transform, and the risks associated with doing so.

METHODOLOGY The following analysis is based on a Q1 2020 Aite Group survey of 2,413 U.S. consumers 24 years or older and a Q1 2021 Aite Group survey of 1,740 U.S. consumers 18 years and older. The surveys were conducted online among U.S. consumers who participated in a research panel. Participants in the Q1 2020 survey indicated that they have an account with a U.S.-based FI, such as a demand deposit account, savings account, loan, credit card, or investment account; transact with the online website or mobile site of their primary FI at least a few times per year; and share or have the primary responsibility for managing their household finances. The Q1 2021 survey profile in total is similar to that of the U.S. adult population for gender, age, income, race, and region. The data in this report have a margin of error of 2 to 3 points at the 95% level of confidence; statistical tests of significance among differences were conducted at the 95% and 90% level of confidence. This white paper also contains analysis from 23



in-depth Aite Group interviews with senior executives at banks, vendors, and consulting firms from various parts of the world responsible for the branch experience and who are refining their digital experience within the next couple of years. To understand the latest trends in the use of alternative data and AI in consumer lending, Aite Group surveyed executives at 22 depository and nondepository institutions headquartered in North America in Q4 2020 and Q1 2021.



THE RISE OF DIGITAL-FIRST BANKING The last year has proved to be a time of forced and accelerated digital transformation. While the industry has been focused on settling into the new normal, it is beginning to see that it also needs to prepare for the “next normal,” and that means figuring out how to build, cultivate, and manage consumer relationships in what is now a digital-first environment and to evolve as the environment continues to change. FIs need to recalibrate the banking experience not only to improve the customer experience but also to give employees the tools and technology to serve what is now a digital-first customer.

Banking behavior has forever changed Digital banking usage has reached critical mass. Fifty percent of consumers indicate they have logged into their financial account using a desktop or laptop computer and 54% have logged in from a mobile device at least once a week (Figure 1).1 Although digital banking usage may not have skyrocketed, for some FIs, the number of activities consumers performed in the digital channels has increased in many cases. In other words, consumers may be logging in the same number of times per week, but they are using more self-service capabilities than they have in the past. Consumer channel preferences may forever be changed, and digital-first will become how many customers continue to interact with their FI. And, while consumers still cite low interest rates on credit products or a higher interest rate on deposit accounts as reasons they select an FI, many consumers view the ability to access their accounts quickly and easily via digital banking as a reason to do business with or move their accounts to another FI. This shift makes it more important for FIs to invest in building more engaging digital experiences. 2

1. See Aite Group’s report The Rise of Digital-First Banking, June 2020.

2. See Aite Group’s report Attracting and Retaining the Digital-First Customer, June 2020.

https://www.aitegroup.com/report/rise-digital-first-banking

https://www.aitegroup.com/report/attracting-and-retaining-digital-first-customer



FIGURE 1: DIGITAL BANKING USAGE

shifting how consumers use channels When Aite Group examined why consumers performed certain banking activities in a branch or a contact center, on average, seven in 10 consumers who stated they used the branch or contact center for a banking activity indicated they preferred to talk to a person in a branch or contact center.3 As banking activities get more complex, consumers turn to channels in which they can get human help. Consumers have assigned roles to channels. Digital is their everyday banking channel, but when they need immediate help or have more complex issues, they turn to channels in which they can talk to a person. With limited branch access, increased branch closures, or continued consumer reluctance to visit a branch during the pandemic, the burden has been on the contact center to provide human help. All of this is accelerating the need to inject human help into the digital channels. While many FIs were on a path to explore how to transform the branch’s role, the need to provide access to human help has accelerated with the shift to a digital-first environment, thereby creating a bigger need to transform the role of the branch and contact center.


50% of respondents log in to financial accounts on a desktop or laptop

computer to check accounts at least once a week

54% of respondents log in to financial accounts on their smartphone to check

accounts at least once a week

Source: Aite Group’s survey of 1,740 U.S. consumers, Q1 2021

Digital Banking Usage




Driving the banking experience in new ways Consumers are beginning to explore new ways to interact with firms in a digital environment. And many retail and technology players are beginning to shape what experience consumers expect from conversational touch points. Over the last few years, many FIs have experimented with either offering a chatbot in a messaging application such as Facebook Messenger, deploying a digital assistant in their mobile banking application, or allowing a consumer to obtain account information through Google Home or Alexa. To gauge how many consumers have interacted with a conversational touch point—chatbot, voice-activated assistant, or digital assistant in a mobile banking app—in the financial services industry, Aite Group asked a series of questions to see if consumers have used the touch point to interact with their primary financial service provider and what they used it for. Forty-eight percent of respondents indicated that they have used a conversational touch point, with 28% indicating they have used a digital assistant in the mobile banking app of their financial services provider, 11% indicating they have used a Facebook Messenger chatbot, and 9% indicating they have used a voice-activated assistant. Of the respondents that have used a conversational touch point, four in 10 indicate they used it to check their balance, and over one-third used it to monitor transactions, pay bills, and obtain a summary of their spending (Figure 2).4 While many of the early conversational banking experiences focused on improving or making it easy to navigate to self-service functions, the industry is beginning to embrace using conversational banking to provide financial insights that can help consumers more effectively manage their finances and stay on track with their financial goals.





FIGURE 2: CONVERSATIONAL AI USAGE

Conversational Touch Point Usage

11% used a Facebook Messenger chatbot (which allows you to communicate in voice

or text and receive a computerized response that seems human)

28% used a digital assistant in the mobile app of their financial services provider

9% used voice-activated assistant

(such as Alexa, Google Home, or Siri)

used it to check their balance

4 in 10used it to monitor account transactions and pay bills

One-third

Source: Aite Group’s survey of 2,413 U.S. consumers, Q1 2020



transforming the Banking experience The branch has been the center of the customer engagement model, and the contact center, digital, and operations were complementary extensions of the branch. However, digital is becoming the facilitator of customer communication and will merge the branch, contact center, and digital experience through the use of technology—knocking the bricks off the mortar. This change will drive FIs to determine how to serve customers in a digital world while still allowing consumers to connect to a branch or contact center agent as needed. That means FIs will have to determine what role branch and contact center agents play in the future and in what ways they will interact with customers. In other words, will branch and contact center agents serve customers in a digital environment using technology that allows them to have virtual face-to-face interactions? Will the roles of branch and contact center agents mesh with both of these employees serving customers using the same technology? Or will some FIs begin implementing a personal banker strategy to give customers access to a dedicated banker or team of bankers?5

Over time, the digital channel will not only be able to orchestrate customer interactions, but also use emerging technology such as AI to offer real-time advice and guidance, predict the next best action or offer, and direct the customer to the best channel to resolve an issue or address a question. And, with the changes to employees’ roles, Aite-Novarica Group predicts that AI will be a driving force in predicting consumer needs, giving real-time digital advice, and allowing consumers to connect with a banker or contact center agent any way they want. Not only will the use of AI create better customer experiences that will be orchestrated across channels, but it will also create operational efficiency by automating experiences and freeing up employees to focus on more complex, value-added experiences.

Balancing the customer and employee experience Usually, when a new technology is introduced, it is thought of in silos—meaning, “what immediate benefit does this technology have in a certain area of my business and/or channel?” As a result, technology is rolled out in a piecemeal fashion. Often, a business unit or channel is chosen to prove out the new technology, and if there is a return on investment, plans are made to roll out the technology to other areas in the organization.

5. See Aite Group’s report Branch Transformation: Knocking the Brick off the Mortar, January 2019.

https://www.aitegroup.com/report/branch-transformation-knocking-brick-mortar



This siloed approach makes it challenging for FIs to extend this technology to other areas, as it was built to serve one purpose or address one use case. However, AI is one technology that has broad benefits to the customer and to the overall organization. The most effective implementations of AI use a cross-organization approach to ensure customer and employee experience is consistent across channels. (Figure 3).

FIGURE 3: INFUSING INTELLIGENCE INTO THE CUSTOMER AND EMPLOYEE EXPERIENCE

While many FIs started using AI before the pandemic, many FIs realize as consumers are now digital-first that AI can be used to enhance the customer and employee experience. This is putting pressure on FIs to ramp up their use of AI and begin using it to support other customer experience and employee functions. To gauge where AI is being used today and the areas FIs are planning to use AI in the future, Aite Group surveyed lenders to determine if they were using AI today for marketing, fraud detection, originations, portfolio management, and collections. A growing share of lenders are either using AI (including machine learning) now or planning to do so in the near future (Figure 4). AI is more typical at the front end of the loan life cycle, with over half of lenders already

Examples of Ways AI Can Transform the Customer and Employee Experience

Source: Aite-Novarica Group



deploying AI for marketing and fraud detection use cases. Key AI growth areas are in originations (in which 45% of lenders are already using AI to some degree) and portfolio management.6 The use of AI for collections currently lags other areas. This difference is likely due to the fact that a strong economic cycle over the last decade resulted in many institutions prioritizing growing the business over the collections function. However, as the pandemic highlighted the need to be prepared for future uncertainty, institutions are becoming more focused on transforming their collections capabilities to catch up with technologies deployed in other parts of the business.

FIGURE 4: USE OF AI ACROSS THE LOAN STAGES

Lenders already using AI or with concrete plans to do so in the near term were asked about specific use cases for AI (Table A). Marketing use cases generally revolve around providing relevant offers with intelligent messaging as well as better predictions of which consumers will respond to different offers and ensuring those offers are delivered through the best communication channel. For fraud detection, lenders cite the assignment of scores and tiering based on the probability that a given application is fraudulent, and techniques to determine whether the device on which a consumer is

6. See Aite-Novarica Group’s report Alternative Data and Artificial Intelligence: Critical Tools in the Lending Tool Box, July 2021.

55% 55%45%

20% 15%

25% 25% 40%

40%

30%

Fraud detection Marketing Origination Portfoliomanagement

Collections

Q. Does your company employ AI such as machine learning in any of the following stages of the loan life cycle? (n=20)

No, but we planto in the future

Yes, we do sonow

Source: Aite Group North American consumer lender survey, Q4 2020 and Q1 2021

https://aitegroup.com/report/alternative-data-and-artificial-intelligence-critical-tools-lending-toolbox



applying for a loan are either associated with previous fraud attempts or have attributes (such as geolocation) that are consistent with the information a loan applicant is providing. In addition to decisioning-related use cases using AI, a lender also notes an AI use case to dynamically streamline data fields presented to a consumer to reduce application time and collect only relevant information.

While fewer lenders note portfolio management and collections-related use cases, there are several applications for these techniques here as well—for example, use cases in portfolio management related to monitoring risk as a loan is in repayment or a credit line is opened to understand whether an existing customer should receive additional offers. In collections, AI is used to better segment customers into certain communication and treatment strategies, including attempting to keep early-stage delinquencies out of collections entirely if the account can be cured quickly. In addition, using data and analytics to better predict outcomes and understand trends is also noted at this loan stage.

TABLE A: AI USE CASES ACROSS LOAN STAGES

Loan stage Use cases reported by survey respondents

Marketing Digital ad targeting Segmenting the customer base Identifying customers for quarterly prescreening offers Predicting which consumers will respond to what offers and over what channel Dynamic and adaptive content or messaging

Fraud detection Risk tiering Device recognition Risk scoring

Originations Decisioning models Identifying employer type to forecast losses Streamlining data fields to remove application friction Real-time decisioning based on probability outputs

Portfolio management Determining the next best action Preapproved cross-sell offers



Loan stage Use cases reported by survey respondents

Predicting performance of individual loans Segmenting customers by risk tiers

Collections Pre-delinquency strategies Forecasting and trending for loan modification, forbearance, or default Improving contact rates Strategies based on predictive metrics Determining campaign intensity

Source: Aite Group North American consumer lender survey, Q4 2020 and Q1 2021



creating value in a virtual environment In the past, going where customers are meant having brick-and-mortar locations to serve customers where they worked or lived. Now where consumers work, how they connect with the community, and how they want to interact with companies they do business with are increasingly virtual. The continued need to connect with a customer in a virtual environment to help them with the activities they used to perform in a branch will drive FIs to create a virtual banking model. In this virtual banking model, FIs need to determine how to serve customers, and build and cultivate relationships. Part of that will be determining how to use chatbots, voice-activated assistants, assistants in mobile banking, and voice-activated assistants such as Google Assistant, Alexa, and Siri as the first point of contact to decrease customer effort when completing banking tasks. When a first level of support is not enough, the use of data and analytics can help FIs orchestrate the banking experience by directing customers to the right channel or by bringing in a requisite expert to them. Data on how customers access their accounts, and their most recent activity can be used to personalize the experience by predicting and recommending the best next action for the customer to take and directing them to the best channel to support that need.

Beyond building better self-service capabilities and injecting human help into digital channels, FIs are exploring how to deliver advice and guidance in a digital-first world. The convergence of data and AI can help FIs personalize the banking experience, predict when customers have a need, make them aware of the need, provide them insight into their financial situation, give them advice, and drive them to take action that aligns with their financial goals. Digital will play a key role in helping make consumers aware of their finances. It will provide insight into how their behavior impacts their ability to meet their goals, give actionable advice on how to stay on track with their goals, and intelligently engage consumers along the way to keep them on track.



Building a connected Banking experience The COVID-19 pandemic has accelerated banking transformation for many FIs. As a result, the pressure is on FIs to determine what their customers need, focus on designing experiences around those needs, and orchestrate the customer experience across channels. As executives transform the banking experience around identified customer needs, they should consider the following:

• Refining banker and contact center roles: As FIs determine customer needs around the banking experience, they must figure out how to deliver that experience in a physical or virtual environment. FIs are considering if they should introduce universal bankers, create a hybrid role that focuses on sales and service activities, use centralized functions, or even mesh the branch and contact center roles and deliver support using virtual technology such as interactive teller machines (ITMs) and video conference technology.

• Upgrading employee technology: Modernizing the experience requires FIs to upgrade the technology used by branch and contact center agents. The focus has to be on creating more modern, usable solutions that can help employees identify the best path forward and quickly arm them with the information needed to serve customers in the way they want. This is particularly important for the younger generations. They may frown upon using multiple outdated, rigid solutions that are not as user-friendly, especially when they use more modern solutions in their everyday lives.

• Implementing flexible workflows: If the pandemic has taught us anything, the flexibility to quickly react to market changes can make or break even the best branch strategies. Digital-first has shown consumers better, quicker, and faster experiences. Those put the spotlight on inefficiency. FIs need to invest in technology solutions that allow them to quickly configure or reconfigure processes and supporting workflows to react to customer expectations and market dynamics.

• Integrating physical and digital channels: During the pandemic, organizations that had implemented omnichannel experiences were better able to pivot to a digital-first interaction model. A theme that Aite-Novarica Group heard in interviews is that omnichannel is a minimum to play now in a digital-first world. And, seamless and connected banking experiences will play a part in helping FIs to be able to serve and build customer relationships in the future.



Reinventing the banking experience As consumer demands and expectations continue to evolve and the use of technology in our personal lives continues to increase, the bar is raised for better banking experiences. When FIs are asked about their expectations across retail banking, the two main areas of focus that are driving their technology investments and transformation efforts are providing a good customer experience and ensuring the most efficient processes possible.

As it relates to customer experience, FIs must be equipped to address the needs of the modern consumer—the consumer who, because of technology, has a whole new set of expectations. Consumers want their transactions to happen on their mobile devices in real time and on-demand, tailored or personalized to them, and they may want to carry that transaction across multiple channels, which means that FIs need to break down the silos (silos between channels but also between different parts of the organization). To create more efficient processes, many FIs are evaluating their technology stack to address some of the limitations that prevent them from automating business processes, consolidating data and insights across their organization, and using AI to support customer and employee experiences. Many FIs strongly desire a more consolidated technology infrastructure with greater levels of integration (Figure 5).

FIGURE 5: BANKING TRANSFORMATION INITIATIVES HAVE ACCELERATED

Banking Transformation Initiatives Have Accelerated

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New expectations across retail banking:

Twin goals of experience and

efficiency

Personalized, omnichannel user experience is central to every IT

decision.

Desire for greater speed and automation

Desire to knock down silos and offer more consolidated data and

insights

AI is viewed as the future

A greater desire for a consolidated technology

infrastructure




customer centricity is the catalyst Transformation begins with putting customer needs and priorities at the center of the design—customer centricity. As FIs build experiences around customer needs, they need to determine if they should build experiences themselves or partner with technology companies to help foster innovation and improve their go-to-market effectiveness. From a technology perspective, FIs need to pivot to agile development to increase API consumption, embrace an open platform approach, and integrate new technologies into their technology stack. That also means that FIs need to evolve their workforce to be able to adopt supporting new customer experiences and using more modern solutions (Figure 6).

FIGURE 6: CUSTOMER CENTRICITY AS THE CATALYST TO TRANSFORMATION

Customer Centricity as the Catalyst to Transformation

Know your customerDeliver a great CX, omnichannel and real-time

Consistently measure and assess customers’ response

Foster innovation and open platform collaborationImprove go-to-market effectiveness

Accelerate time to market while retaining securityIncrease API consumption and open platform

New operating model and banking paradigm

Adopt new technologies and sourcing modelsAccelerate IT changes

Break up cultural, technological and operating silosRedeploy and acquire new IT talent

Customer centricity

Technology partnerships

Agile development

New technology stack

Workforce evolution

Digital transformation

journey




MINIMIZING risk during transformation As FIs start to transform the banking experience, they need to reduce risk, including operational risk associated with running legacy solutions. At the same time, they need to balance risk reduction with increasingly agile systems that are more responsive to customers and changing market conditions. They need these systems to generate more powerful insights and be better equipped to cope with the amount of data that’s presented to them. Most banks have built a complex, hybrid technology stack of diverse, loosely connected siloed systems cobbled together over many years—often the result of numerous mergers and acquisitions. This has left FIs with data that is fragmented and inconsistent, and solutions that are not scalable or flexible enough to keep up with rising consumer expectations. As FIs begin their transformation journey, they must address the following to minimize risk (Table B).

TABLE B: RISK MINIMIZATION CHECKLIST

Items to Address

✓ Replace outdated legacy systems. Outdated legacy systems built on older technology hold

FIs back as they struggle to keep up with new requirements and are subject to less frequent

enhancements. Legacy systems such as core banking platforms built on older technology

may not be flexible enough to allow FIs to maintain updates and follow proper regulatory

standards, exposing them to greater compliance risk and financial losses.

✓ Move to a low-code approach. A low-code approach enables high levels of configurability

and, together with componentized architectures, makes it easier for FIs to make desired

changes themselves. A single code base with an extremely high level of configurability

enables FIs to create differentiation by making changes quickly without requiring an upgrade

to the system.

✓ Leverage data to obtain real-time insight. Most FIs have barely scratched the surface of

leveraging the wealth of data they house within their systems. New, next-generation

technology solutions make that data easier to access, analyze, and follow specific regulations

associated with using consumer data. The use of real-time data processing and analysis



Items to Address

provides timely insights to improve decision-making and personalize the customer

experience. Implementing effective data access and management standards, coupled with a

nimble infrastructure, are critical components. FIs can then shift their focus from dealing with

the complexity of data analysis, governance, and distribution, to actually harnessing the data

and using it to their advantage.

✓ Protect data. With the increase in data breaches, the use of tokenization for data at rest and

encryption for data in transit are important. These technologies are highly effective but are

often difficult to deploy within rigid legacy IT environments. This is another driver for FIs to

move to more modern core technologies.

✓ Implement more robust analytics solutions. Combined with a deep understanding of

customer needs and enabled by advanced analytics, an FI can anticipate customer requests

and design distinctive products and experiences accordingly. Real-time reconciliation and

around-the-clock transaction processing can create a key competitive advantage for FIs. For

example, with the advent of next-generation banking platforms, organizations can now

develop products that are built for scale and can be readily configured to meet specific

customer expectations and shift as consumer expectations evolve.




Conclusion Digital transformation does not mean that all investments and focus go to digital. Rather, it means that FIs build a customer engagement strategy to help orchestrate a customer’s experience across channels, products, services, and communication preferences. As FIs create their digital transformation strategy, they should consider the following:

• Transformation is not one and done. Technology will continue to evolve, and customer expectations will shift. FIs need to design the banking experience in a way that serves customers the way the customers want rather than serving customers in the way the bank thinks customers should be served. That means FIs need to continue to iterate on their strategy, incorporate what they’ve learned, and anticipate customers’ future needs.

• Omnichannel is the key to orchestrating customer communication. Consumers were already using multiple channels to interact with FIs. As consumers move their interactions to digital, FIs need to create a seamless experience across channels to allow customers to move from digital channels to channels that allow them to get help from a banker, either in physical branch location or a virtual environment.

• Provide a flexible experience for consumers and employees. The pandemic gave us one important lesson. Flexibility is key in being able to quickly pivot and react to customer needs, market changes, and unexpected events. FIs need to invest in technology solutions that can allow them to quickly configure or reconfigure processes and supporting workflows to react to customer expectations and market dynamics.

• Transform back-office and operations processes. To transform the banking experience, FIs need to think beyond the digital customer experience. True transformation will occur only if FIs’ back-end systems and operational processes are also streamlined to help increase customer transparency and reduce the friction in the entire customer journey. AI provides the means to do that.

• AI technologies need to have the proper framework to support regulatory changes. Although AI is not new, the use of customer data and the techniques used to generate customer insights from the data need to be explainable. FIs need to make sure they have the proper frameworks in place to follow proper regulatory standards to reduce compliance risk and financial losses.



About Servicenow ServiceNow (NYSE: NOW) is the fastest-growing enterprise cloud software company in the world above US$1 billion. Founded in 2004 with the goal of making work easier for people, ServiceNow is making the world of work, work better for people. Our cloud-based platform and solutions deliver digital workflows that create great experiences and unlock productivity for more than 6,200 enterprise customers worldwide, including approximately 80% of the Fortune 500.

How ServiceNow is defining the future of financial services.

ServiceNow is a single, connected platform of action that unites every system, app, and user in the organization. Those connections can enable automated workflows, new innovations, and ultimately, a better experience for employees and customers alike. With the Now Platform®, you can predict, prioritize, and proactively manage the work that matters most, in a way that reduces cost and risk across the enterprise.

Find out how people like you are defining the future with the Now Platform by visiting: www.servicenow.com/solutions/industry/financial-services.html.

http://www.servicenow.com/solutions/industry/financial-services.html



About Aite-Novarica Group Aite-Novarica Group is an advisory firm providing mission-critical insights on technology, regulations, strategy, and operations to hundreds of banks, insurers, payments providers, and investment firms as well as the technology and service providers that support them. Comprising former senior technology, strategy, and operations executives as well as experienced researchers and consultants, our experts provide actionable advice to our client base. The quality of our research, insights, and advice is driven by our core values: independence, objectivity, curiosity, and integrity.

Contact Research and consulting services:

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Author Information Tiffani Montez +1.617.338.6045 [email protected]

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SEPTEMBER 2021 Transforming the Banking Experience Through