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1 | The CIO advantage: Controlling the epicenter of customer data for digital banking transformation and omnichannel managementwww.inetco.com
WHITEPAPER
The CIO advantage: Controlling the epicenter of customer data for digital banking transformation and omnichannel management
2 | The CIO advantage: Controlling the epicenter of customer data for digital banking transformation and omnichannel management
WHITEPAPER
Overview Captaining the digital banking transformation ship is no easy task, especially when every bank is in a competitive race to provide the best customer experience possible. It used to be enough for CIOs to be the trusted owner of IT architecture. But now, many CIOs are taking on an expanded leadership role that not only includes efficiently managing the underlying IT infrastructure, but also driving inter-departmental change, integrating new technologies and overseeing the enterprise-wide data strategy.
The good news is that your combined operational and strategic business agility makes you well positioned to take all of this on. Your strong ties to the IT operations team gives you control over the epicenter of customer data that can fuel digital transformation initiatives, organization-wide. You are in a unique position that can help banks utilize data such as customer transactions, and share it securely across multiple departments and channels at speed. This is an important step away from silo’d systems management towards omnichannel management.
This whitepaper is for CIOs that are finding themselves responsible for more strategic digital transformation initiatives that span the entire banking organization. It is meant to help CIOs understand how they can avoid pockets of disparate and disjointed data investments, and increase the value and utility of customer transaction data by changing the way it is:
●● Captured in complex banking environments
●● Used to spot performance issues and improve operational efficiency within IT
●● Shared across various channels and departments enterprise-wide, to drive digital transformation initiatives and omnichannel management
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Digital Transformation – What’s REALLY behind the buzzword? An increasing number of tech-savvy customers are placing high value on choice. They have no problem taking charge and building out their own portfolio of banking services. These services are often selected from multiple banks and fintech providers, based on cost, user experience and convenience. As a result, winning more of the customer wallet share has become extremely challenging. Loyalty is quickly eroding for banks that cannot provide customers what they want - where and when they want it. What is more, there is also a panic to onboard new technologies and applications as quickly as possible, while reducing the cost-to-serve.
These are all reasons why digital transformation initiatives have become a top priority across the banking industry. Banks are focused on projects that will lead to expanded service offerings, increased personalization, and a better omnichannel customer experience.
Although digital transformation is a big buzzword, there are some reality factors worth noting behind all the noisy hype:
1. Technology innovation and change is accelerating faster than your bank can keep up with. It takes an operating culture of proactive adaptation, creativity and constant evolution to respond to your customer needs quickly and continuously.
2. CIOs need the right combination of operational and strategic business agility to help banks win. It takes someone that can manage both an integrated technology and business approach to retain customers and keep them happy — every time, across every touch-point.
3. Data is fueling digital transformation – More and more strategic initiatives span the entire banking organization. CIOs need to figure out the best way to collect data and make it readily available for any new use case that comes along. The ability to analyze combined data and share it securely across multiple departments and channels at speed, is key to any bank’s long-term omnichannel success.
Behind the buzzword of digital transformation comes a rapidly moving tidal wave of data, technology change and IT infrastructure complexity. Today’s successful CIO must not only manage the constant change in IT, but also the overall data architecture that feeds business users and security teams – across your entire banking organization. This means that to tackle digital initiatives, you have to be a master in:
●● Building out enterprise-wide data strategies
●● Seamlessly integrating new technologies and applications
●● Efficiently managing the performance of a complex, underlying IT architecture
On average, 80% of a CIOs budget remains trapped in infrastructure management, maintenance, and support functions and with the increasing threat of cyber-attacks and changing compliance regulations this number could rise. Confounding this, CIO’s are tasked with accommodating the influx of new technologies, platforms, and product offerings coming down the pipe. The 2016–2017 Global CIO Survey - Deloitte1
Gartner estimates that by 2018, CIO’s will be spending roughly 28% of their budget on digital transformation.
The 2017 Gartner CIO Agenda Survey2
1Deloitte: https://dupress.deloitte.com/dup-us-en/topics/leadership/global-cio-survey.html 2Gartner: www.gartner.com/technology/cio-trends/cio-agenda/
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WHITEPAPER
The data epicenter of digital transformation – IT operationsWhile many departments have a stake in digital transformation, the CIO is uniquely positioned to move the whole digital iceberg. Not only do you possess the required technical and business management expertise, you are also closely aligned with what tends to be the epicenter of digital data flowing into the company: IT operations.
Traditionally, IT operations has been perceived as a back office function which has little impact on a bank’s bottom-line. But this team, under the CIO’s guidance, is also the key to helping banks move towards a common experience across all channels and avoid pockets of disparate and disjointed data investments.
If the name of the digital transformation game is accessing any data, from any systems, to be applied to any use case across your organization, success hinges on a CIO’s ability to evolve this team beyond infrastructure performance management into more of a “data broker” role. This often requires you to:
●● Adopt new technologies that make existing IT operations processes more efficient
●● Reduce time and costs associated with researching and troubleshooting the root cause of issues
●● Build out a strategy on how to best manage the collection, storage, combining and company-wide distribution of the customer data most needed for analysis and omnichannel management
Tapping into the “lifeline” of digital transformation – customer transaction data In a survey conducted by Accenture3, 79% of people interviewed described their banking relationship as “merely transactional”. This is important to consider when undergoing digital transformation initiatives: Transactions have become your lifeline to many customers. If the lifeline breaks, it’s only a matter of time before your business may break, too.
If utilized properly, transaction data provides unique utility to CIOs that see an enterprise-wide data strategy as an important part of their digital transformation initiatives. This data can also help make the performance management of new technologies and IT architecture more efficient.
Traditionally, real-time transaction data has been utilized by IT operations teams looking to quickly isolate the root cause of transaction issues occurring within the underlying IT infrastructure. But new use cases continue to develop. We now see this data being used to provide the valuable customer insights needed by channel managers, marketing teams and customer experience departments interested in analyzing customer behavior and usage patterns. It is also being used by security teams to decrease risk of undetected transaction anomalies and mitigate fraud loss.
CIO’s are aware that transaction data contains revealing information on what the customer is experiencing, how networks and applications are responding, and what the business value of each transaction is from a revenue or service perspective. Now you need to figure out the best and fastest way to collect this data and make relevant pieces of it readily available for a growing number of use cases across the organization – without the cost and effort exceeding the benefits it provides.
3www.accenture.com/us-en/~/media/Accenture/Conversion-Assets/Microsites/Documents17/Accenture-2015-North-America-Consumer-Banking-Survey.pdf
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Fortunately, advances in real-time monitoring, data streaming and analytics technologies has made it possible to easily extract transaction data off the wire in a “ready to analyze” state. These technologies can help CIO’s increase the time-to-value and utility of transaction data by advancing the way the data is:
●● Captured in complex banking environments
●● Used to spot performance issues and improve operational efficiency within IT
●● Shared across various channels and departments enterprise-wide, to drive digital
transformation initiatives and omnichannel management
Capturing transaction data across complex banking environments With the increasing IT complexity brought on by more applications, new self-service channels and integrated third party services, transaction data can be particularly hard to holistically capture in a timely manner. Instead of monitoring the end-to-end transaction, it has traditionally been common for operations and channel systems teams to take the silo’d approach of monitoring their individual devices and applications, network links or server-to-server exchanges that make up the transaction delivery chain as silos. Applications teams monitor applications, and network teams monitor networks, but it is unclear who should be responsible for monitoring the transactions that traverse between these nodes.
Given that performance issues often occur between hops on the transaction path, monitoring IT environments in this way gives CIO’s an incomplete picture of customer experience at the transaction level. Moreover, the time and effort it takes to manually reconstruct transaction data in order for it to be actionable often results in untrustworthy and stale data. In a world where customers expect their banks to react instantaneously, CIO’s can ill afford to swing late on time-sensitive opportunities.
Advances in transaction-level monitoring and data streaming solutions have made it possible for IT operations teams to automatically capture transaction data from the wire, independent from the underlying application or switch being monitored. Each individual, end-to-end credit and debit card transaction is captured in real-time, across any and all banking channels and applications. This is an important step away from vertical silo systems management towards omnichannel management.
Unlike application performance management tools or network sniffers, an advanced transaction-level monitoring solution will provide better capture of data through:
●● Continuous transaction transparency – Automatically discover, decode and reconstruct every transaction in real-time using a lightweight deployment model to pull data from various points off your network - on a continuous basis
●● End-to-End channel systems visibility – The reconstruction of individual transaction paths based on “hop-by-hop” response times and time stamps makes it fast and easy to isolate whether issues are occurring at a device, switch, third party host or interbank connection.
●● Real-time data – Efficiently extract prepared transaction data off your network, greatly reducing the time and costly resource cycles spent gathering and piecing together fragmented transaction data across a number of applications and devices. Select data to be streamed to a scalable database such as Hadoop, or forwarded to other analytics or fraud monitoring platforms of choice.
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Using transaction data to manage the performance of new technologies and the underlying IT architecture Once real-time transaction data capture and streaming has been established, the question becomes what to do with it.
Digital transformation initiatives may require that CIOs focus more of their effort on brokering highly targeted information across the banking organization. But efficiently managing the underlying IT architecture is still a priority, as well. Consumer experience can be meaningfully improved if the IT operations team can guarantee reliable transaction performance within every banking channel. Combined with the fact that IT owns the transaction data collection process, it is only natural that they remain a primary user of real-time transaction data.
Transaction failures and slowdowns can quickly eat up a CIO’s budget and ultimately degrade the end customer experience due to longer service disruptions and troubleshooting processes. Without a real-time, transaction-level monitoring solutions in place, IT operations teams have difficulty immediately isolating whether a performance issue is related to a device, switch, third party service, banking host or interbank connection. This can lead to expensive, time consuming blamestorms as different teams point at each other as the root cause of the problem.
Advanced transaction management capabilities such as “hop-by-hop” response time correlation and the ability to drill down into every individual end-to-end transaction profile makes it fast and easy to isolate at which point issues are occurring on the transaction path.
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Common features found in transaction-level monitoring and analytics solutions also include a real time alerts engine, data streaming/forwarding capabilities, individual transaction drill-down functionality, trending and statistics, searchable data logs and customizable live dashboard overviews. When real-time transaction data capture is coupled with user-friendly dashboards and real-time event notification, IT operations teams can instantly be aware of:
●● A rise in transaction decline or reversal rates for a certain BIN range, group of ATM/POS terminals or application
●● A rise in failed transaction rates either by terminal ID, card type, interbank connection, EFT connection or service
●● Status codes and response code errors that are linked to specific network, host or application issues such as MAC or other TCP network error occurs
●● Transaction anomalies related to unexpected EMV fallbacks, abnormal transaction withdrawal volumes, suspicious foreign card withdrawals and high or low dollar amounts
●● Specific service response slowdowns or failures that let you know which device, card type or application is having the issue, and who is responsible for fixing the problem
Transaction trending and usage statistics to compare transactions based on card types, reversals, on-us vs. off-us transactions, or profile transaction traffic originating from the various ATM/POS services offered; identify unusual transaction volumes by device or geography.
Typical results for IT operations teams for implementing a real-time transaction-level monitoring and analytics solution include:
●● A 65-75% faster mean-time-to-repair
●● A reduction in failed customer interactions by 26% and
●● Improved availability of all self-service devices
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This make it easier for CIOs to incorporate new technologies and digital services into their banking environment, drive down the mean-time-to-repair associated with IT operations, and improve customer experience.
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Sharing transaction data by building out an enterprise-wide data strategy The ability to share data for any new use case that comes along, and to do this at speed throughout the organization, has never been more mission critical for CIOs.
Transaction data is key to understanding omnichannel customer behavior, and many departments could benefit from access to it. However, it isn’t enough to simply hand over the data and expect results. To make this contribution less mechanical and more impactful, CIOs should consider streaming or forwarding their transaction data into environments where channel managers, marketing, security and customer experience teams are used to working – such as a preferred analytics or security platform.
With on-demand data, different business units will have the ability to quickly get at answers related to card program performance, fraudulent transactions, channel profitability and the end customer experience with minimal IT operations involvement. This will vastly increase the utility of a real-time, transaction-level monitoring and analytics investment. Here are just a few examples of how it could be deployed:
Channel Management – Channel management strategies now require visibility into transaction performance to increase the ROI of self-service devices, improve customer wallet-share, and manage the deployment of more sophisticated service offerings. With easy-to-use dashboard analytics built from on-demand transaction data, channel managers will have the ability to understand customer usage patterns, improve device placement, and offer more digital services without risk of disruption:
Example Dashboard: A holistic view into the overall performance of an entire ATM fleet. See the locations of your ATMs compared to competitor ATMs on a map and see the usage of the selected ATMs based on the number of transactions, types of transactions, queue patterns and customer vs. non-customer transactions.
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Payments System Security – Eliminating debit card fraud and ATM fraud is important for meeting customer’s security expectations. Payment operations and security teams can implement a real-time warning system which notifies them of anomalous transaction patterns and potential advanced persistent threats. Customized dashboards built using real-time transaction data can help these teams to monitor suspicious foreign card transactions, know when a payment switch has been compromised, and identify POS or ATM terminals that are vulnerable to attacks.
Example Dashboard: A real-time alert designed to warn security teams of when an excessive number of transactions are occurring using potentially fraudulent international cards.
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Card Operations – Card operations teams are relying on new products, dynamic customer segmentation and more meaningful value-adds to increase their profitability. With robust card analytics and visibility into all debit and credit card transactions, cards teams can understand the success of these new program offerings, provide value added analytics to merchant retailers, and assess the overall profitability of the cards channel.
Example Dashboard: A dashboard which shows card transaction volumes, average transaction value over time which allows users to forecast expected volume and identify trends. It also shows which card types have been most used within their network.
WHITEPAPER
© 2017, INETCO Systems Ltd. All Rights Reserved. All referenced trademarks, registered trademarks, trade names, service marks and logos belong to respective companies. +1.604.451.1567 | [email protected] | www.inetco.com
Summary Data is at the heart of digital transformation, and there is no better link to the omnichannel customer experience than transaction data. With IT operations teams at the epicenter of this data, CIOs are in a powerful position to expand the role of IT beyond new technology integration and infrastructure performance management. In the expanded role as a data broker, you can provide on-demand answers to the burning questions of various channel, marketing and security teams, organization-wide.
Investment in advanced real-time transaction-level monitoring, data streaming and analytics solutions such as INETCO Insight and INETCO Analytics will help form the building blocks of your digital transformation initiatives. These solutions were designed to help deliver the right data at the right time, and improve the utility of transaction data by advancing the way the data is:
●● Captured in complex banking environments
●● Used to spot performance issues and improve operational efficiency within IT
●● Shared across various channels and departments enterprise-wide, to drive digital transformation initiatives and omnichannel management
With the power to access a real-time, end-to-end view of transactions, CIOs gain the level of operations and business agility needed to build out an enterprise-wide data strategy, efficiently manage the adoption of new technologies and IT architecture performance, and win the race to providing the best customer experience possible.
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About INETCO®—Every transaction tells a story®
INETCO® Systems Limited provides market leading transaction monitoring and analytics software that helps line of business and IT operations teams improve profitability, reduce operational costs and deliver an amazing customer experience. INETCO’s proven solutions are currently deployed in over 50 different countries. Happy INETCO Insight® and INETCO Analytics™ partners and customers include some of the world’s largest companies spanning the banking, ATM, retail, telecommunications and payment processing markets. www.inetco.com
