Banking Apps AnalysisReviewed by Thomas Woodfin on Mar 6Rating: 5.0Banking App AnalysisAnalysis
Figure 1. Banking and Investment Services Agenda Overview
Figure 1. Banking and Investment Services Agenda Overview
Source: Gartner (January 2013)
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Challenging economic, political and regulatory conditions have dramatically reduced fee income and net interest income, while increasing capital requirements in the global banking industry. The result of these and other trends is that the industry is projected to face a 45% gap in the net profits required above baseline growth to reach a 12% return on equity (see "Maverick* Research: Banking on APIs and Apps, Not Applications" ). The top CEO business priorities are to increase revenue, reduce costs and improve customer experience (see "CEO Survey 2012: Financial Services CEO Agenda" ). In 2013, we advise CIOs to focus the value proposition of IT on building new revenue sources, enhancing operational efficiency and improving customer experience with technology.
Our 2013 research agenda will focus on three areas that we believe will deliver the greatest financial and customer impact for CIOs and the banking and investment services industry: amplifying the customer experience, reinventing payments and innovating operations (as shown in Figure 1).
Amplifying the Customer Experience
CIOs face huge challenges in adapting bank product and service offerings to match the ever-changing requirements of customers. These customers are living increasingly digital lives, with access to technology and information that enable them to make better and more-efficient decisions across their day-to-day interactions with companies and other individuals. Understanding the underpinnings of this digital life, the ecosystem that is driving customer adoption and how this integrates into existing face-to-face interactions will be key to banks and financial services companies flourishing through the next five years.
Reinventing Payments
Retail customers' consumption patterns and commercial customers' business processes are becoming less visible to banks, while customers are getting more visibility into their financial choices via new competitors and interfaces. Digital wallet solutions are, therefore, becoming essential to banks to get back control and influence over more-fragmented demand and supply chains. CIOs have to integrate cash management and payments toward a single global business strategy, and this is at the heart of the "Transaction Banking 2.0" value proposition. To deliver on these requirements, CIOs need to build a transformational road map now for the modernization of their payment systems or architectures.
Innovating Operations
CIOs continue to pursue identifying the best approach to the modernization and transformation of the operational ecosystem. Changes in banking system design and technology impact business beyond IT as market forces disrupt the status quo. Component-based architecture and the advent of banking apps will be required to enable business process management (BPM) and more timely and informed decisions, and to demonstrate the value of IT. While a costly, high-risk proposition, operational innovation provides material benefits for banks. To deliver, CIOs must develop compelling, sustainable business cases and recommend appropriate front-to-back structures and content, while managing risks against the potential costs and benefits.
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Key Issues
The primary target constituency for our research is the CIO. Our 2013 agenda will center on the following Key Issues:
Amplifying the Customer Experience
What is the digital life?
How can technology amplify digital and face-to-face interaction?
What will the bank of the future look like?
Reinventing Payments
How do I use digital wallet solutions to maximize revenue and growth?
How do I plan and manage the modernization of my payment architecture and value chain?
How do I move to Transaction Banking 2.0?
Innovating Operations
How do I transition to open banking systems?
How can information, process, analytics and technology be used to make more intelligent decisions?
Each Key Issue will have research across a four-step life cycle that includes:
Strategize and plan — Identifying emerging trends and technologies, building a business case, and developing a strategy and plan for deployment
Drive change management — Adapting processes, data, architecture, infrastructure, applications and technologies to support strategy and planning
Execute — Selecting the vendor, deploying the solution, and ensuring implementation and postimplementation support
Measure and improve — Developing metrics and then measuring them in business value terms — for example, improving revenue, efficiency and customer experience
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Amplifying the Customer Experience
What is the digital life?
Customer life experiences are increasingly digitalized. To all parties in the retail and commercial banking and investment services ecosystem, this digitalization brings benefits and risks. The benefits are efficiency, transparency, portability and speed, and the ability to support new products and services. The risks to be managed are privacy, security, the threat of losing control of the customer relationship, disintermediation and the discoverability of noncompliant behaviors.
Planned Research
Our research includes, but is not limited to, those in Table 1.
Table 1. Planned Research on Digital Life
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Developing an optimal digital business strategy
Adapting to digital business patterns
Determining the best time to act
Defining the role of social, mobile, location and context in a digital interaction model
Defining the digital ecosystem
Identifying the CIO's role in delivering a digital life strategy, specific to banking
Defining the components of the digital banking ecosystem that will be required to support the digital strategy and its delivery
Testing ideas digitally without being encumbered by traditional IT parameters
Evolving from a retail and commercial delivery strategy to a digital strategy
Identifying touchpoints between the bank and its partners to ensure integration and integrity
Deploying apps that address customer needs
Identifying critical success factors for implementing a digital model
Defining and measuring digital success
Source: Gartner (January 2013)
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How can technology amplify digital and face-to-face interaction?
In an increasingly digital world, face-to-face interactions continue to be a key part of sales and delivery in the financial services ecosystem. CIOs need to address challenges associated with cost, efficiencies and process to ensure these interactions are effective and profitable, and enhance digital interactions.
Planned Research
Our research includes, but is not limited to, those in Table 2.
Table 2. Planned Research on Using Technology to Amplify Interactions
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Developing a strategic posture toward face-to-face interactions
Determining which interactions should be face-to-face
Defining the role of social, mobile, location and context in the face-to-face interaction model
Optimizing the execution of the face-to-face interaction model
Deploying technologies that make the branch more accessible to digitalized customers
Measuring the face-to-face value proposition
Capturing customer feedback, and integrating it into process design
Source: Gartner (January 2013)
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What will the bank of the future look like?
The competitive threat from the mega digital providers is ever-present and growing for financial services firms. However, CIOs can leverage the opportunities those competitors bring to the market, such as information management, social connectivity and scalability, to transform their existing business models and to enhance customer experience.
Planned Research
Our research includes, but is not limited to, those in Table 3.
Table 3. Planned Research on the Bank of the Future
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Identifying how current bank business models must change to reflect the mega digital firms, like Google, Apple, Amazon and Facebook
Identifying the role of mobile and contextual technology in the customer ecosystem
Developing a strategy for the role of the digital advisor in the ecosystem
Analyzing the role of gamification, gesture, biometrics, and identity management in the customer experience and ecosystem
Identifying the role of a digital or data information broker in the ecosystem
Developing a partnership strategy to ensure the enhancement of customer experience
Evaluating the role of the mobile Internet on the ecosystem
Identifying how banks can use the mega digital firms to test new customer experience paradigms
Adopting technologies that mega digital firms use to enhance customer experience
Developing a value proposition for cooperating or collaborating with mega digital providers
Executing a digital partnership strategy
Identifying ways that CIOs can measure the success or failure of new digital competition
Evaluating how improved customer experience can translate into increased customer profitability
Source: Gartner (January 2013)
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Reinventing Payments
How do I use digital wallet solutions to maximize revenue and growth?
Retail customers' consumption patterns and commercial customers' processes are becoming less visible to banks, while customers are getting more visibility into their financial choices via new competitors and interfaces. New money paradigms are also changing the traditional linkages between stores of value and mediums of exchange. Digital wallet solutions are, therefore, becoming essential to banks for getting back control influence and influence over a more fragmented demand side and supply side.
Planned Research
Our research includes, but is not limited to, those in Figure 4.
Table 4. Planned Research on Digital Wallet Solutions
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Adapting to new consumption patterns created by new commercial channels
Influencing and building trust over the customer decision and acquisition process with digital wallets
Defining and segmenting what digital wallets are
Identifying dominant models for each segment
Developing a road map for digital wallets and related services
Identifying how digital wallets will enable the future of money
Identifying the account services to develop as part of digital wallets
Defining how digital wallets will lead to a new generation of account services
Developing a way to monetize the information collected and delivered through digital wallets
Defining partnership strategies to enable digital wallets
Identifying how the multichannel environment will evolve to deliver value via digital wallet solutions
Deploying digital wallets
Achieving connectivity and integration with partners, vendors and systems
Enabling digital wallets through payment system modernization
Using open development banking platforms or public Web APIs to accelerate the delivery of digital wallet solutions
Measuring and controlling the efficiency and effectiveness of partners
Identifying how the use of digital wallets impacts data collection and analysis
Using digital wallet solutions to enable microsegmentation and needs-based services
Source: Gartner (January 2013)
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How do I plan and manage the modernization of my payment architecture and value chain?
The extension of banks' payment portfolios (new payment partnerships, instruments, services, processes and solutions) and the evolution of transaction banking, combined with new competitive models, demand new payment processes and payment information management solutions. CIOs must build a transformational road map now for the modernization of bank payment systems and architectures.
Planned Research
Our research includes, but is not limited to, those in Table 5.
Table 5. Planned Research on the Modernization of Payment Architectures
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Build the business case for payment modernization
Designing a payment system modernization road map, based on strategic intent
Evaluating how the convergence of card management software and payment services hub (PSH) solutions will deliver business value
Analyzing how to align payment modernization with open development banking platforms or public Web APIs
Defining how the future of money will be enabled by payment modernization
Defining the modernization characteristics (functionalities, processes, systems and applications) required to achieve modernization objectives
Identifying a starting point for payment modernization
Identifying and evaluating the ecosystem of vendors for modernization initiatives
Developing criteria to prioritize vendors during selection
Maximizing the use of standards
Controlling the future cost of maintenance
Acquiring and protecting intellectual property during modernization
Revising the road map, based on roadblocks
Measuring the success of payment modernization
Source: Gartner (January 2013)
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How do I move to Transaction Banking 2.0?
The current approach by CIOs to cash management and payment businesses is toward integrating them into a single global business strategy. Although various banks use the term "transaction banking" as a marketing tool, few have taken the organizational and technical actions and the process and data integration across products to actually support the holistic management and delivery of these services. Such integration in support of the customer's financial supply chain is at the heart of the Transaction Banking 2.0 value proposition.
Planned Research
Our research includes, but is not limited to, those in Table 6.
Table 6. Planned Research on Transaction Banking 2.0
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Redefining transaction banking to ensure alignment with commercial customer processes
Identifying new services that will be enabled by Transaction Banking 2.0
Evaluating how the future of money will impact Transaction Banking 2.0
Defining how Transaction Banking 2.0 will impact the physical supply chain
Identifying which channels to modernize first as part of the transformation road map
Aligning the channel mix to customer requirements
Identifying information process flows to develop new cash management services
Evaluating how payment system modernization and opening up banking systems will deliver Transaction Banking 2.0
Identifying which third-party providers (such as SWIFT, other banks and ERP vendors) can augment transaction banking operations
Developing criteria to prioritize third-party partner selection
Controlling customization to ensure relationship managers do not create unsustainable processes
Using strategic sourcing to reduce cost and differentiate
Source: Gartner (January 2013)
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Innovating Operations
How do I transition to open banking systems?
CIOs need to find order-of-magnitude efficiency gains in IT and operations — else, cost structures will be unsustainable, and business agility cannot be supported.
Planned Research
Our research includes, but is not limited, to those in Table 7.
Table 7. Planned Research on Transitioning to Open Banking Systems
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Evolving strategies for legacy modernization, based on emerging trends and technologies (for example, open development and app stores)
Planning appropriate functionality, architecture and technology for a shared-service layer
Developing a strategy for banking system renewal that bridges front- and back-office operational silos
Developing a strategy for open development platforms and apps
Determining the appropriate governance structure for operational effectiveness
Evaluating how other banks have achieved synergies
Evaluating the implications of business strategies and architectural strategies on application selection and design
Assessing project readiness prior to executing banking system renewal
Employing alternative sources of functionality, such as community clouds and outsourcing
Implementing appropriate industry frameworks
Identifying industry resources for architecture and infrastructure innovation, such as messaging and Banking Industry Architecture Network (BIAN), to enhance agility and interoperability
Implementing governance to reduce operational risk
Measuring and optimizing operational performance
Improving service and support using operational utilities
Measuring and managing the total cost of ownership
Source: Gartner (January 2013)
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How can information, process, analytics and technology be used to make more-intelligent decisions?
CIOs need to improve bank competitiveness through timely and informed decisions by leveraging new technologies, new sources and types of data, and new models. This requires having the right data at the right place and at the right time. Moreover, CIOs must have analytic tools to drive insight and deliver relevant results to decision makers.
Planned Research
Our research includes, but is not limited to, those in Table 8.
Table 8. Planned Research on Leveraging Technology and Data to Improve Decision Making
Strategize and Plan
Drive Change Management
Execute
Measure and Improve
Identifying how data is shared and mapped
Evaluating architecture and technology pain points for data accessibility and quality
Identifying untapped data sources and analytic technologies
Monetizing data assets through infonomics
Identifying best practices in data governance, access, analysis and archiving
Aligning new data and analytic strategies with the organizational and cultural mindset
Assessing the data implications of new markets and service opportunities
Implementing data solutions and distribution models to improve data accessibility and quality
Deploying industry data models and semantic standards to improve data quality and integration
Utilizing social data sources and analytics, such as crowdsourcing and digital payments or banking advisors, to improve decision making
Using risk-based analytics and data models to improve project and process performance
Source: Gartner (January 2013)
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Related Priorities
Key Initiatives address significant business opportunities and threats, and typically have defined objectives, substantial financial implications and high organizational visibility. They are normally implemented by a designated team with clear roles and responsibilities, as well as defined performance objectives.
Table 9. Related Priorities for Banking and Investment Services
Key Initiative
Focus
Bank of the Future
Bank transformation relies on the ability of CIOs to re-engineer the business to meet the demands of today's market, while establishing capabilities that foster growth tomorrow.
Create One Bank
The strategy for creating one bank focuses capital and resources on reducing the complexity of applications and infrastructure to improve agility, efficiency, transparency, risk management and, ultimately, performance.
Payments Modernization
CIOs are modernizing bank payment architectures to control costs, accelerate compliance, improve risk management, strengthen account and payment information services, and drive revenue growth.
Source: Gartner (January 2013)
Analysis
Figure 1. Banking and Investment Services Agenda Overview
Source: Gartner (January 2013)
Challenging economic, political and regulatory conditions have dramatically reduced fee income and net interest income, while increasing capital requirements in the global banking industry. The result of these and other trends is that the industry is projected to face a 45% gap in the net profits required above baseline growth to reach a 12% return on equity (see "Maverick* Research: Banking on APIs and Apps, Not Applications" ). The top CEO business priorities are to increase revenue, reduce costs and improve customer experience (see "CEO Survey 2012: Financial Services CEO Agenda" ). In 2013, we advise CIOs to focus the value proposition of IT on building new revenue sources, enhancing operational efficiency and improving customer experience with technology.
Our 2013 research agenda will focus on three areas that we believe will deliver the greatest financial and customer impact for CIOs and the banking and investment services industry: amplifying the customer experience, reinventing payments and innovating operations (as shown in Figure 1).
Amplifying the Customer Experience
CIOs face huge challenges in adapting bank product and service offerings to match the ever-changing requirements of customers. These customers are living increasingly digital lives, with access to technology and information that enable them to make better and more-efficient decisions across their day-to-day interactions with companies and other individuals. Understanding the underpinnings of this digital life, the ecosystem that is driving customer adoption and how this integrates into existing face-to-face interactions will be key to banks and financial services companies flourishing through the next five years.
Reinventing Payments
Retail customers' consumption patterns and commercial customers' business processes are becoming less visible to banks, while customers are getting more visibility into their financial choices via new competitors and interfaces. Digital wallet solutions are, therefore, becoming essential to banks to get back control and influence over more-fragmented demand and supply chains. CIOs have to integrate cash management and payments toward a single global business strategy, and this is at the heart of the "Transaction Banking 2.0" value proposition. To deliver on these requirements, CIOs need to build a transformational road map now for the modernization of their payment systems or architectures.
Innovating Operations
CIOs continue to pursue identifying the best approach to the modernization and transformation of the operational ecosystem. Changes in banking system design and technology impact business beyond IT as market forces disrupt the status quo. Component-based architecture and the advent of banking apps will be required to enable business process management (BPM) and more timely and informed decisions, and to demonstrate the value of IT. While a costly, high-risk proposition, operational innovation provides material benefits for banks. To deliver, CIOs must develop compelling, sustainable business cases and recommend appropriate front-to-back structures and content, while managing risks against the potential costs and benefits.
Key Issues
The primary target constituency for our research is the CIO. Our 2013 agenda will center on the following Key Issues:
Amplifying the Customer Experience
Reinventing Payments
Innovating Operations
Each Key Issue will have research across a four-step life cycle that includes:
-
Strategize and plan — Identifying emerging trends and technologies, building a business case, and developing a strategy and plan for deployment
-
Drive change management — Adapting processes, data, architecture, infrastructure, applications and technologies to support strategy and planning
-
Execute — Selecting the vendor, deploying the solution, and ensuring implementation and postimplementation support
-
Measure and improve — Developing metrics and then measuring them in business value terms — for example, improving revenue, efficiency and customer experience
Amplifying the Customer Experience
What is the digital life?
Customer life experiences are increasingly digitalized. To all parties in the retail and commercial banking and investment services ecosystem, this digitalization brings benefits and risks. The benefits are efficiency, transparency, portability and speed, and the ability to support new products and services. The risks to be managed are privacy, security, the threat of losing control of the customer relationship, disintermediation and the discoverability of noncompliant behaviors.
How can technology amplify digital and face-to-face interaction?
In an increasingly digital world, face-to-face interactions continue to be a key part of sales and delivery in the financial services ecosystem. CIOs need to address challenges associated with cost, efficiencies and process to ensure these interactions are effective and profitable, and enhance digital interactions.
What will the bank of the future look like?
The competitive threat from the mega digital providers is ever-present and growing for financial services firms. However, CIOs can leverage the opportunities those competitors bring to the market, such as information management, social connectivity and scalability, to transform their existing business models and to enhance customer experience.
Reinventing Payments
How do I use digital wallet solutions to maximize revenue and growth?
Retail customers' consumption patterns and commercial customers' processes are becoming less visible to banks, while customers are getting more visibility into their financial choices via new competitors and interfaces. New money paradigms are also changing the traditional linkages between stores of value and mediums of exchange. Digital wallet solutions are, therefore, becoming essential to banks for getting back control influence and influence over a more fragmented demand side and supply side.
How do I plan and manage the modernization of my payment architecture and value chain?
The extension of banks' payment portfolios (new payment partnerships, instruments, services, processes and solutions) and the evolution of transaction banking, combined with new competitive models, demand new payment processes and payment information management solutions. CIOs must build a transformational road map now for the modernization of bank payment systems and architectures.
How do I move to Transaction Banking 2.0?
The current approach by CIOs to cash management and payment businesses is toward integrating them into a single global business strategy. Although various banks use the term "transaction banking" as a marketing tool, few have taken the organizational and technical actions and the process and data integration across products to actually support the holistic management and delivery of these services. Such integration in support of the customer's financial supply chain is at the heart of the Transaction Banking 2.0 value proposition.
Source: Gartner (January 2013)
