“If we start off by talking about technology, we’ve failed”

The above quote captured at the event summed up the essence of a very interesting and informative lunchtime session we hosted for senior technology leaders of UK banks and financial institutions in the City of London. Highly focused on how to genuinely deliver enhanced customer services and modernized systems through new approaches, rather than around specific technologies.

Alongside a number of the Amdocs team were technology decision makers from the likes of Santander, HSBC, The Bank of London, Recognize Bank, Macquarie Group, and Deutsche Bank, who were all invited to participate in discussions centered on the question of banking being at a crossroads in 2024. How do we drive legacy transformation within the leading banks and financial institutions? Led by experts including Amdocs' Bentzi Aviv, and Isabel Pitt - a leader in payments and digital transformation with experience in established high-street banks like Lloyds Banking Group and fast-moving fintech scale-ups like Zopa.

Observing the Chatham House Rule enabled the free-flowing discussion, allowing representatives to openly discuss the real-world challenges they face in the journey ahead. There were also some insightful conversations diving into the universal interests of those tasked with modernizing the technology infrastructure and customer services of financial institutions.

Key learnings and contributions from our guests

Strategic differentiation through customer experience is a double-edged sword

The personalization of services is helpful for both delivering better, “stickier” customer service and growing customer lifetime value. Our research shows that 84% of financial leaders believe customer experience is a critical revenue generator. There is an evident commercial value to this, as noted by one of our guests, “the [benefit] of upselling existing customers is that they’ve already done KYC”. But, in the age of surveillance capitalism, decreased trust, and increased privacy concerns, banks remain trusted by customers because they don’t sell their data to third parties. “Hyper-personalization” for banks may not be perceived as a good thing by customers, because they may have concerns about how the experience is being delivered. There’s a careful balance to be struck.

Designing new services is one thing, but delivering them is harder

“The quality of testing is paramount because we are dealing with people’s money”, as one of the delegates in attendance put it, and sums up the challenge perfectly. ‘Move fast and break things’ might work well for social media, but not for people’s mortgages. “The key to success when designing digital experiences is how you take them from the test environment and implement [them] across your client base. Success is how you go from test to scale”, was another contribution from the group that visibly resonated with attendees.

Core systems modernization by balancing risk with reward 

The challenge to modernizing legacy infrastructure was summed up well with this contribution: “There is no ‘two-speed’ solution. You will move at the speed of your slowest component”. This gets to the heart of the challenge for established financial services providers. This will need to be built on solid, modern architecture to deliver the services that customers demand. To do that, you need to build a compelling business case for the board - “risk, reward, and cost-benefit considerations change constantly”. As such, one's models and assumptions require continual testing and updates throughout the lifecycle of a project.

Keys to the success of transformation 

Ranging from board sponsorship to investment, clear goals… and fear! 
“Sponsorship of modernization projects is important. Big transformation projects rely on sponsorship”. Getting board-level sponsorship for modernization projects is a key pillar to success. But it’s not the only one. There were a few more suggestions from the group - “What’s the definition of ‘done’” was a succinct way of describing the need for clear objectives, understood by all involved. Ultimately, money is another key to success for modernization: “The reason big programs fail is a lack of proper funding”. Finally, maybe slightly tongue in cheek, a suggestion from one of the attendees was, if you want to successfully fund and deliver a modernization program “you need to make one senior person really scared!”

Currently, AI will give you correlation, and not a lot more 

It wouldn’t be a discussion with a group of technologists without discussing AI. AI has the opportunity to offer transformation benefits for financial institutions. But it’s still early days. As one of our guests put it, “AI won’t currently find your “unknown unknowns”, but it will give you a correlation. Another contributor acknowledged the value of AI tools in providing ‘access’ to intelligence, but caveated this with their limitations - “even algorithms have parents and it's usually a human”. With this in mind, we must know what questions we want to answer before attempting to extract value from the technology. 

If these topics have resonated with you, or you are trying to deliver modernization within your financial services business, we would love to hear from you. We are hoping to convene more meetings like this with senior technology leaders from across the financial services space as well. 

Let us know if you would like to receive an invite to our next event, contact: fs@amdocs.com