DigitALL or nothing Digital financial services - Fujitsu
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Digital financial services DigitALL or nothing
Contents Introduction 3 The importance of ‘digital outside’ The customer perspective 5 Bridging the gap Hybrid IT Do more with data The impact of ‘digital inside’ The employee perspective 11 Supporting sales and service Value what you have already Changing times for IT "Research now proves what progressive companies have come to realise: that the new business environment demands new business models which can successfully integrate internal and external digital services." Mike Sewart, Director of Digital Services, Fujitsu UK & Ireland
The UK population are digital trailblazers. We
spend more time using technology than sleeping1.
In 2014, thirty-six million of us went online every
day and almost seven in ten accessed the internet
on the move.2
Digital is an unstoppable force that is redefining the financial services sector. Those institutions that
know instantly what their customers and employees want can stay one step ahead of slower
competitors. Thinking about digital strategically and working with partners that can deliver innovation
will be key factors in long-term success.
In 2012, the UK was the world’s third
largest market for app usage, trailing
only the USA and China.
UK
Leading the charge
According to a recent Fujitsu study3, the financial services
sector as a whole outperforms other industries, achieving the
highest levels of usage and satisfaction with digital services.
This is perhaps unsurprising given the number of digital
services on offer in Retail Banking, for example. But it's not
just Retail Banking, it's Pensions, Insurance & Wealth The UK values digital
Management that are starting to make progress too. BANK
financial services
This focus is highlighted by the National Institute of Economic
and Social Research (NIESR) that suggests that there are
currently over 270,000 ‘digital’ companies in the UK,
Two-thirds of survey respondents use online banking, the
biggest number and ahead of online shopping.
representing almost 15% of the UK economy. This shows that
all types of financial services providers have a wealth of
national talent and digital startups to draw innovation and
63% of consumers say online banking is their most valued
digital service – ranked joint top with online shopping.
fresh thinking from.
But what does this surge in digital mean for financial services 40% of respondents say they always opt for digital when
companies? What can banks and other financial institutions dealing with their bank/financial institution, the highest response
learn from their customers, employees and start-ups? And why across any industry category.
is it imperative that companies utilise digital right across the
value chain – from front-end customer services to back-end
processes and staff engagement?
The insight on the pages that follow explore these digital
issues in turn. They demonstrate the impact that digital can
have on your operations and show you how Fujitsu is helping
organisations like yours become digital inside and out.
1. http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr14/market-context/?pageNum=6
2. http://www.ons.gov.uk/ons/dcp171778_373584.pdf
3. Digital Inside Out: Creating a digital-first Britain, Fujitsu, 2015
3
4
The importance of ‘digital outside’
The customer perspective
The UK is becoming a ‘digital-first’ nation, with more than a quarter of
us always using any kind of digital service when given the chance.
From mobile investment apps and payment transfers to self-
service terminals in branches, there are any number of ways
for consumers to interact with financial institutions. But what Barclays
does digital mean to your customers and how can you meet
rising expectations? is using ground-breaking technology to implement its
Community Banking service – virtual branches set up in
Inspired by the speed and ease inherent in the digital approach, more convenient locations, like libraries or village halls.
the UK’s consumers are taking control of their interactions with Its ‘Community Bankers’ can swiftly set up a remote branch
companies and dictating the pace of those engagements. wherever suits their customers, using just an iPad and WiFi
This presents financial services providers with a standout digital or 3G connectivity. The result is ‘branch services’ that can be
imperative: how to provide digital services that can match made available almost anywhere and at any time to better
customer expectations and then improve those services as serve the needs of Barclays' customers.
expectations rise.
Mobile Wallets
Financial services providers need to balance the drive for
innovation with the need for business continuity. They need to The transformation of payments is being redefined by
not only enable the digital front-end experience but also non-traditional providers across the globe. Mobile
connect this to the operational back-end – achieving true end- wallets have been introduced to offer an alternative
to-end enablement, that's both effective and robust. payment method with the likes of Apple Pay, PayPal and
Android Pay becoming trusted and often the preferred
method for customers.
Bridging the gap between physical and
virtual worlds
In Retail Banking, the branch-based business model remains
important even as digital provides an attractive alternative
distribution channel. Therefore, this could increase costs
unless the organisation can streamline established channels
at the same time as it launches new ones.
9 in 10 UK adults are confident or 82% of UK financial services customers are
highly confident in using digital services. happy or exceptionally happy about the
quality of digital services on offer.
80% of UK consumers rate digital services More than 25% say that digital
offered by financial services providers as excellence makes them feel more loyal to
important or exceptionally important. the company or brand providing it.
5
One of the most effective ways that financial institutions are
approaching digital is through an ecosystem of partners
and SMEs.
Santander
Partnering with digital startups gives financial institutions a
is actively investing in disruptive technologies in the
faster route to customer innovations. These small-scale, agile
financial technology (FinTech) space through its Santander
operations are developing new digital financial services faster
InnoVentures fund.
than any of the major players. But that does not mean that
the two cannot work together.
Just as important as bridging the gap between the physical Aviva
and virtual worlds, digital technology must bring together has sponsored a FinTech ‘hackathon’ to encourage
what the customer sees and how the business is run. entrepreneurs and developers to propose new products that
could transform the sector, such as Foursquare-powered
travel insurance.
The banking industry is more dependent than ever
on technology for all aspects of the business4. RBS Innovation Gateway
Gartner seeks to offer innovators a way to test their ideas on actual
major bank assets to see if they would work in the real world.
Reinventing traditional channels
It's over simplifying to think of digital disruption as just new
revolutionary ways to go to market; traditional channels can
be digitised as well.
For example Fujitsu is reinventing the ATM for the digital
age. In Spain, the country’s largest financial group,
CaixaBank wanted to create a network of ATMs that
delivered on its customer-first principles. The company
conducted workshops with its customers to determine
the most important features. Fujitsu then took these
recommendations and designed a next-generation ATM that
would meet customer needs which is manufactured in its
production facilities in Malaga.
The new ATMs allow customers to use contactless cards
and make transactions swiftly. They also offer a choice of
interactions, including an avatar that uses sign language,
high-contrast screens, large text and buttons, a screen
reader and keyboard navigation. These features make the
ATM easy to use, especially for those who might normally
struggle with such services, like elderly or disabled people.
Protecting customers and cash
Bradesco is one of Brazil’s major retail banks. They needed to improve ATM security – a big problem for all South American banks
and their customers. By working together, Fujitsu was able to integrate one of the most secure biometric technologies available
today – palm vein recognition – into their network of 35,000 ATMs. Now, Bradesco customers simply hold their hand over a
sensor at the cashpoint and are instantly and securely identified. And because the technology is so reliable, Bradesco’s fraud-
related costs are down to almost zero.
4. https://www.gartner.com/doc/2974430/hightech-tuesday-webinar-market-technology
6
Mind the gap
Hybrid IT as a competitive differentiator
The success of front-end digital technologies like mobile apps or
multifunctional ATMs demonstrates the digital appetite among
in financial services
the public.
Yet some customers are asked to download different apps for
different purposes. In other cases the user experience on a
mobile compared to a tablet or a desktop is different. This
highlights that silos remain behind the scenes and that there is
still much to do to marry front-end applications with back-end
systems.
Digital front to back
– the key considerations:
• How to consolidate systems to provide a
single user experience to customers
• How to integrate cloud computing to support innovation
so as to save time and costs
• How to simplify systems in the face of growing front-end 'Cloudability' is an emerging theme in financial services.
complexity from business units, products, processes and Everything is 'cloudable' but the business case must
compliance determine timing and priorities. That, in a nutshell, is the
argument for hybrid IT because there is no such thing as
• How to utilise the back office to support real-time a 'one size fits all' approach to cloud adoption. For many
processing, faster customer onboarding or cut manual financial services companies, a complete 'rip and replace'
document workflows. of heritage infrastructure is not the right answer. At the
same time, it is clear that cloud should be the platform of
choice for new deployments and for innovation, so as to
future proof rapidly evolving digitised channels. Hybrid
The digital difference IT is about striking the right balance between legacy
Progressive pension providers have recognised that digital will technology and new technology, such as cloud computing.
play a major role in remaining competitive as the market opens
up. New rules on access to funds means customers will want
more transparency on how their investments have performed.
For fund managers, insurers and pension providers alike, the
shift to digital and mobile services demands a shift towards
24/7 operations. The increased amount and frequency of
customer contact and the emergence of real-time services will
spell the end for batch transactions.
7
Do more with customer data
Analytics is everything in a sector that relies on deep insights to set
charges, premiums and interest rates. New forms of interaction –
such as contact via social media, video consultations or peer-to-peer
payments – are generating much more unstructured data too.
Customers are increasingly likely to expect the same level of
personalised service from financial services companies which
they have grown accustomed to in other sectors – the so-
called ‘Amazon effect.’ Big data analytics can help providers
meet these expectations. By tailoring their services based on
micro-segmentation, personal behaviours and insights into
market sentiment, financial institutions can develop new
services ahead of their rivals.
Most companies only ever analyse around 12%
of the data they hold, leaving potentially valuable
data on the cutting room floor.5
Mike Gualtieri, Forrester Research
Top three reasons customers
choose digital6
3. Helps them
save money
1. Quicker
2. Simpler
■ Investment banking – private bankers use an
By improving the use of big data analytics, companies can
enterprise cloud app on their tablet in client meetings
maximise the utility of the data they already hold. This not only
to show how to reallocate funds based on the real-
improves services to existing customers who prefer to choose
time performance of stocks.
digital over other channels – so driving levels of retention and
customer satisfaction – it also makes it possible to capture new ■ Retail Banking – the BankAmeriDeals programme
clients from competitors, who have yet to fully understand the uses card information to personalise services ‘at the
significance of such approaches. point of relevance’ with offers for the stores they know
customers shop at7.
■ Insurance – linking external sources of data, such as
Environment Agency flood information, could cut the
time it takes to process claims – saving effort and
generating customer loyalty.
■ Pensions – using analytics to assess the effectiveness
5. http://www.i-cio.com/strategy/big-data/item/hadoop-onomics-banking-on- of a pension plan in providing income post-retirement
big-data-opportunities could allow a provider to advise or even sell other
6. Digital Inside Out: Creating a digital-first Britain, Fujitsu, 2015
services to help people combat any shortfall.
7. http://newsroom.bankofamerica.com/press-releases/consumer-banking/
survey-shows-card-linked-marketing-programs-are-highly-effective-rar via
http://thefinanser.co.uk/fsclub/2015/01/four-big-bank-tech-trends-for-2015.html
8
Safe and secure The customer drives innovation
Perhaps more than any other sector, financial services The customer is central to the shift in business model for
customers want to know that whichever digital service they financial services providers. They want a consistent experience,
use, their money or confidential information is safe and secure. greater mobility and more engagement.
36% of consumers said that security In Australia, NAB
concerns were a barrier to the use of
created an interactive branch window based around a
digital services.8
Handball Challenge. This gamification of the engagement
process helped NAB promote interest rates and other
services while using anonymous viewer analytics to
determine the demographics of those standing in front of
After the global financial crisis, trust remains a key issue in the
the signs.11
sector. So providers must ensure watertight data security and
regulatory compliance to give customers the confidence that
they are placing their data and their money in the right hands. In Russia, AlfaBank
is giving its customers preferential interest rates based on
Staying one step ahead the data it receives from their fitness trackers12.
In the UK in 2014, 29 new organisations applied to the
regulator for a banking license9. These challenger banks and
financial services providers, such as Nutmeg, combine clever These internal and external customer touchpoints, including
marketing with targeted services and digital platforms to take Internet of Things (IoT) devices, are combining to create a rich
market share. digital ecosystem based around customer preferences.
In other areas, such as foreign exchange trading, the
globalisation and commoditisation of services allows new
entrants to gain customers with the ability to offer low-fee Bridging the Gap
services. Insurers are faced with more customers who are
willing to switch.
55% of bank executives view non-traditional
players as a threat to traditional banks.10
Meet the digital natives
Pensions – NOW: Pensions
aims to simplify the pensions process for employers
and employees alike.
Insurance – Metromile
Some of the major challenges financial institutes face
has taken an innovative approach to premiums by
when bridging the gap between digital inside and out are
offering a per mile car insurance service.
fragmented customer systems and legacy applications that
lock vital data away. Both large financial organisations
Corporate banking – OzForex and financial regulators are addressing this by using
launched with the aim of rewarding people for technology such as Fujitsu RunMyProcess to overcome the
referring others. technical barriers to digital transformation. RunMyProcess
specifically is helping organisations rapidly create, deploy
and distribute highly customised enterprise and mobile
Retail Banking – Civilised Bank business applications to connect silos of information;
is launching without branches but a network of local reducing time to value and enabling digital scale.
bankers backed by a digital service platform. The outcome has been end-to-end digital solutions
that seamlessly integrate infrastructure, information
and people.
8. Digital Inside Out: Creating a digital-first Britain, Fujitsu, 2015
9. Fujitsu Technology and Services Vision 2014
10. PwC Retail Banking 2020 via http://www.slideshare.net/PWC/banking-trends-
32411479?related=2
11. http://www.intel.com/content/dam/www/public/us/en/documents/solution-
briefs/intelligent-digital-technologies-empower-bank-branch-brief.pdf
12. http://www.mintel.com/blog/finance-market-news/how-the-financial-services-
sector-can-capitalise-on-mintels-get-smart-trend-in-2015
9
Digital experiences begin and end in the back office, powered by every customer interaction and internal data stream. Anne MacRae, Head of Financial Services, Fujitsu UK & Ireland 10
The impact of ‘digital inside’
The employee perspective
For employees of financial services companies, not only can digital
make their lives easier but it can also accelerate decision making
through real-time access to data.
71% of financial services employees are satisfied with the digital
services provided to them, up from 50% two years ago.
50% said that real-time access to information is one of the
biggest benefits of digital services in the workplace.
77% believe that the future success of their organisation
hinges on the effective use of digital technology.
Fujitsu research shows that a healthy 63% of financial services So how can companies use digital to support
employees think that digital services make their lives easier. their employees?
Encouragingly, 71% are satisfied with these digital services –
compared with just 50% two years ago. Answers include offering the ability to work remotely or to deliver
personalised information and sales collateral directly to their
Despite this, 61% of financial services employees think that mobile devices. In fact, 57% of workers cite mobility and flexibility
their employers should invest more in digital in the next two as the principal benefits they get from digital services.
years. And when asked where this investment should be spent,
Finance and Customer Service came out on top.13 Faster, smarter decision-making is also important to employees.
Exactly half of those questioned said that real-time access to
information is one of the biggest benefits of digital services in
the workplace14.
Top three benefits of digital to employees
2. M
ake decisions faster
360
3. A 360° view of
the customer
1. Mobility
13, 14. Digital Inside Out: Creating a digital-first Britain, Fujitsu, 2015
11Value what you have already
While the sector is certainly not lagging behind others, 60%
of employees still believe more investment in digital is required
in financial services.
Yet investment in digital services does not have to come at the
expense of currently successful back-end technologies. Rather Two-thirds of employees believe that new
than replacing them all, modernising those that work well and digital services in the workplace are making
integrating them with new digital investments can optimise their jobs easier to do.
the benefits of digital transformation in the enterprise.
The first step in this journey is Legacy Modernisation –
reviewing all applications and hardware to determine whether
they are fit for purpose. The next step is to identify what is still
needed to support digital transformation, such as public,
private or hybrid cloud.
4 ways digital can improve the workplace
Review of training spend – employees feel
Technology as an enabler – having mobile
valued when they can log in to a portal and see how platforms and apps that are synced with enterprise systems
much the company is investing in their training and gives staff more freedom in and out of the office/branch
benefits. (everything is in one place for anytime, anywhere working).
Streamlining laborious HR processes – this
Saying yes – such as providing the secure networks
frees up more HR and staff time to get on with being that allow employees and customers alike to share WiFi
productive and removes the hassle of bureaucracy. and BYOD practices without compromising data.
12Changing times for IT staff
A rapid growth of mobile banking, massive changes in pensions
regulations and the demand to do more with data bring threats
and opportunities to financial services providers. Staying
competitive will depend on highly accurate data and systems
that can:
■ Enhance the customer experience ■ Keep digitally savvy employees happy
■ Support growth or maintain margins ■ Protect sensitive or confidential
information
Enabling the Digital Workplace So what's top-of-mind for financial institutions?
In financial services, as new challengers enter the ■ The ability to scale to exploding data volumes.
market, the importance of employee productivity and
talent retention is vital. Employees want access to the ■ The security of corporate data across cloud environments.
same services and applications they have at home.
■ Potential threats, from careless errors to full blown
To address this, one large global financial services
industrial espionage.
organisation that Fujitsu works with has started the
journey to realise a truly digital workplace, and they’re
■ Quality of service delivery to meet consumer expectations
already reaping the benefits.
for premium experiences.
Through the implementation of Fujitsu’s Workplace
Anywhere solutions, they have enabled more than 20% ■ Maintaining service levels whilst reducing cost.
of employees to regularly work from home and improved
employee satisfaction from 2.5 out of 5 to 4 out of 5. ■ The overhead of maintaining legacy systems that
Moreover, by implementing digital workplace services struggle to adapt to new business needs.
Fujitsu has delivered more than £500 million of savings,
and counting, through property reductions and ■ The proliferation of ‘shadow IT’ and the need to support
productivity increases. non-traditional devices.
13Here to help -
Fujitsu, a digital partner
for financial services
You can see for yourself the exciting yet challenging
opportunity that digital presents for financial services in
the sheer speed of evolution and adoption that you must
work toward today.
That’s why at Fujitsu we don’t pretend to have all of the answers. Instead, we've built up a unique
and expanding ecosystem of large and small partners to shape the competitive digital edge you
need to thrive in this hyper-connected world.
We have experience in modernising end-to-end business operations, by building new digital front-
end experiences, and seamlessly connecting these to the back-end systems and infrastructure
that enable them, using unique technology such as Fujitsu RunMyProcess.
As experts in legacy modernisation, as well as new digital and cloud platforms, we balance the
drive for innovation with the need for business continuity through our Hybrid IT approach. We
take a pragmatic, evolutionary approach to digital modernisation: from launching or improving a
single service, to delivering multiple solutions that, together, achieve enterprise-scale
transformation.
From profitability, to customer engagement, to launching new products and services, Fujitsu will
help you realise your digital ambitions, by building the best solutions for today, and then helping
to manage and maintain them into the future.
Fujitsu’s Fujitsu Your Business
Digital • Unrivalled legacy apps knowledge • Customer-centric
• Enterprise-scale transformation • Competitive
2.0 • Best in class global technologies • Profitable
• In partnership with innovative SMEs • Agile
14About Fujitsu Fujitsu is the leading Japanese information and communication technology (ICT) company offering a full range of technology products, solutions and services. Approximately 162,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers.
FUJITSU
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