9. 9
Digital Sales need to replace lagging branch sales.
Bank Sales
Digital Banking is about protecting revenues, and
growing top line.
A projected 30% drop in branch
sales need to be replaced by
the digital channel.
Banks need to drive to a 50%
Digital Sales mix by 2019.
HOW IS DIGITAL DIFFERENT?130
65
90
63
125
9
Non-
Branch
Sales
62
0
65
130
Total Sales 2014 Branch Sales
2019 (E)
Total Sales
Required 2019
(E)
Sales Needed to
Fill the Gap
2019
99
∆ =
(30)%
In Millions of Active New Accounts
Estimated Bank Sales
Source:SourceCEBCustomerExperienceSurvey
10. 10
69% of digital purchases are from constant seeking, not life events.
Digitals are constantly seeking in their digital network, not the Bank’s
network.
Constant Goal Seeking drives Digital Decision making
130
65
30%
41%
29%
28%
28%
21%
10% 8%3% 2%
0%
50%
100%
Branch Oriented Digitally Oriented
Other
Dissastisfied with Another Product
Life Event Caused a Need for a New or Different Product
Responded to an Attractive Product Offering
Learned That I Have a Need for the Product
n = 2.343
Constant listening, engagement and messaging is
required to acquire and retain digital buyers.
Digital purchases are shifting away from
life events to influence based, or
choice based on superior solution.
Digital buyers are changing products and
institutions more frequently.
Personalized marketing & education
drives digital product selection
Source:SourceCEBCustomerExperienceSurvey
HOW IS DIGITAL DIFFERENT?
Reasons for Financial Product Purchase
11. 11
Digitals do not wait to be educated by the branch. 62% learned
about the financial product outside their bank.
Networked Learning Process has changed
Balance the investment to optimize the customer experience,
returns on technology investment & neutralize risk.
130
65
BankNoticesChange
Customer
Learns
Relevant
Solution
Determines
Best
Response
Opens
Necessary
Account
CustomerRecognizes
Need
Customer
Chooses
Bank
Branch
Staff
Clarify
Need
Branch
Staff
Propose
Solution
Branch
StaffFulfill
Solution
BankBuildsBrand
Salience
InitiatedTraditionalProcess
SuspectedDigitalProcess
ActualDigitalProcess
CustomerRecognizes
Need
Customer
Clarifies
Need
Customer
Evaluate
Alternatives
Customer
Selects
Alternative
BranchStaff
Affirmor
Challenge
BranchStaff
Fulfill
Solution
BankBuildsBrandSalience
Customer Bank Directed
Customer Controlled Bank Enabled
Customer Controlled Bank Reaction
Customer
Learns Need
Cognitive Bias is masking the true
behavior of Digital customers.
Digital buyers churn through products
and institutions more frequently.
Personalized marketing & education
drives digital product selection
HOW IS DIGITAL DIFFERENT?
12. 12
With the smartphone as the ‘bank’; Full Wallet is not in the mind of
the digital customer. The full wallet must be earned.
Digital Loyalty is fickle
Competition for the Digital Wallet will be fierce & frequent.
130
65
0.4x
1.0x
0
0.5
1
1 2
Customers Who Consolidate All
Products at Primary Institution
n = 3.900
Source: Federal Reserve Board
2013 Survey of Consumer
0.7x
1.0x
0
0.5
1
1 2
Strong Likelihood to Purchase
Next Product from Primary
Institution
n = 4.957
Source: CEB 2013 Customer
Experience Survey
DigitalCustomers
Non-DigitalCustomers
Full Wallet - is 60% less likely to
consolidate all of their
products.
Digital buyers – are less likely to
buy from a single institution.
HOW IS DIGITAL DIFFERENT?
13. 13
Helping digitals ‘stay on track’ drives 50% more loyalty. Digitals find
value in managing and measuring the pivotal steps to goal
attainment--but it must be integrated and permissioned.
Loyalty is an engaged experience
Traditional banking is an undifferentiated experience, Digitals seek value add
that impacts their goals.
130
65
Loyalty
DaytoDaytasks PivotalSteps
StayingonTrack PurchasingProducts FinancialPlanning
DrivingAction ReducingComplexity ProvidingInformation
13% 24% 64%
CustomerWeighting
Source:CEBCustomerExperienceSurvey
Continuous Engagement is
rewarded with an increase in
financial products and upsells
Automate important and
unpleasant tasks that help
digitals attain goals
HOW IS DIGITAL DIFFERENT?
14. 14
Digital Banks can run short cycle test and learn cycles to (digitally)
learn the kind of engagement customers seek.
Constantly Seek Opportunities to Engage
Goal attainment and behavior modification can be executed in
high volume, small impact touches that can be measured
continuously in real-time.
130
65
Source:LPfinancial
Customer Product
Use
Customer Default
Risk
Account Related
Events
Customer Feature
and Channel Use
Opportunity
Getting ahead of
potential product
service problems
Getting ahead of
potential repayment
problems
Getting ahead of
account related to-
dos
Ensuring customers
get more out of
product and
channel features
Outreach
Proactive alerts Proactive alerts and
tips on ways to
better manage
credit
Reminder of
upcoming account
events and related
tasks
Educational tips
during customer
use of services via
bank outreach
Result
Customers regularly
use banks products
without service
problems
Improved loan
repayment
decreases defaults
Customers
remember to take
necessary account
actions
Customer accesses
features and
channels that can
best meet their
needs
Digital Engagement creates a digital
history that can be used to compare
negative and positive outcomes.
Digital buyers churn through products
and institutions more frequently.
Personalized marketing & education
drives digital product selection
HOW IS DIGITAL DIFFERENT?
16. 16
Design to the Gartner Digital Business Platform, enabling the required capabilities, to defend against
the threat, and to partner with the innovators, the technology stack must be rethought.
Enabling the Digital Banking Capabilities
Balance the investment to optimize the customer experience, returns on
technology investment & neutralize risk.
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Information Systems Platform
Customer & Digital Platform
Data & Analytics Platform
Ecosystems & API platform
Internet of things platform
Employees
Partners
Customers
Things*Gartner–G00297286
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
17. 17
Supports the Back Office and Operations such as ERP and Core systems
Information Systems Platform
Balance the investment to maximize returns and the
customer experience.
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SupplierPortal&
Apps
Employee
Collaborationand
Workspace
CoreBanking
Applications
EndPoint
Computing
OTSystems
CustomerPortal
&Apps
Business
Intelligence
BackOffice
Systems
Employeecollaborationandworkplace-Email,telephonyand
video,filestorageandsharing,collaborationtools,productivity
tools
Back-officesystems-finance,HR,purchasing,MDM,billing,
ERP,
Coresystems–Corebanking
Supplierportalandapps–VendorInteraction&supply
management
Customerportalandapps–Customersusethemtogain
information,getcustomerservice,applyforservices,place
ordersandtransact,and/orviewstatus
Businessintelligence-reporting,dashboardsandonline
analyticalprocessing(OLAP)analysisofback-officeandcore
systemdata
Operationaltechnology(OT)systems–operationalsystem
directlycontrolandmonitorequipmentandassets.
Endpointcomputing -endpointdevicesandthesecurityand
managementtoolsthatsupportthem
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner–G00297286
18. 18
Contains the main customer-facing elements, such as customer and citizen portals, multichannel
commerce and customer apps. Multi Channel is table-stakes.
Customer & Digital Platform
Things
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SupplierPortal&
Apps
Employee
Collaborationand
Workspace
CoreBanking
Applications
EndPoint
Computing
OTSystems
CustomerPortal
&Apps
Multichannel
Interaction&
Commerce
SocialNetworks
Business
Intelligence
Customer
Analytics
BackOffice
Systems
Gateway to Interaction & Commerce. Integrated
across the platform.
Multichannel interaction and commerce- enables
customerstolookupinformation,requestservicesanddoany
oftheactivitiesassociatedwithe-commerce,regardlessof
interactionchannel
Social networks- participateinsocialnetworksfor
communityinteractionandtransactional(e.g.,commerceand
payment)functions.Bilateraldataexchangewithsocial
networks;i.e.:feeds&reads.
Customer analytics–DigitalBankingusesanalyticsranging
from simplehistoricalanalysisandsegmentationtodemand
analyticsandadvancedsocialsentiment.Canbediagnostic,
predictiveandprescriptive(e.g.,customerofferengine).
Theoutput/resultsofcustomeranalysiscanbefedtoanyother
partsofthetechnologyplatform.
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner–G00297286
19. 19
Connects physical assets for monitoring, optimization, control and monetization. Capabilities include
connectivity, analytics and integration to core and OT systems.
Internet of things platform
Leverage Connected Things
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SupplierPortal&
Apps
Employee
Collaborationand
Workspace
CoreBanking
Applications
EndPoint
Computing
OTSystems
CustomerPortal
&Apps
Multichannel
Interaction&
Commerce
SocialNetworks
Business
Intelligence
Customer
Analytics
Connected
Things
(Partner)
Connected
Things
(Customer)
IOTAnalytics
Connected
Things
(Internal)
BackOffice
Systems
Connected Things (Customers) – Applications,Devices&
Technology. Scale,security,cost,andprivacyandethicswillbe
majorfactorsinconnectingcustomer-ownedthings
Connected Things (Partners) - assetsthatitleasesorthat
areoperatedbypartners,agencies,or
Connected Things (Internal)–TheIoTplatformprovides
connectivity,andinteractiontothisequipment,andshouldbe
abletohandlemanydifferentdataandwirelessstandards.
IOT Analytics - DigitalBankingusesanalyticsrangingfrom
simplehistoricalanalysisandsegmentationtodemandanalytics
andadvancedsocialsentiment.Canbediagnostic, predictive
andprescriptive(e.g.,customerofferengine).
Theoutput/resultsofcustomeranalysiscanbefedtoanyother
partsofthetechnologyplatform.
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner–G00297286
20. 20
Supports the creation of, and connection to, external ecosystems, marketplaces and communities.
API management, control and security are its main elements.
Partner & Connected Ecosystem
Run or Participated in Ecosystems and API Economy
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SupplierPortal&
Apps
Employee
Collaborationand
Workspace
CoreBanking
Applications
EndPoint
Computing
OTSystems
CustomerPortal
&Apps
Multichannel
Interaction&
Commerce
SocialNetworks
Business
Intelligence
Customer
Analytics
Connected
Things
(Partner)
Connected
Things
(Customer)
IOTAnalytics
Connected
Things
(Internal)
EnterpriseRun
Ecosystems
Customer
FacingAPI
API
Management
IndustryRun
Ecosystems
PartnerFacing
API’s
APImanagementsoftware–management,securityand
governanceareforAPIsthatwillbepublic-facingandAPIsfrom
partnersthatwillbeemployedinabusinessecosystemthat
couldincludeemployees,customersandpartners
Customer-facingpublicAPIs-tobeusedbycustomersor
otherpartnersincustomer-facingroles
Partner-facingpublicAPI-Designedtobeusedoutsidethe
enterprise,butforpartnersinsteadofcustomers.
Enterprise-runecosystems-Theabilitytocreatesocialgraphs,
feeds,monetizationenginesandalgorithmsthatlinksupply
withdemand(e.g.,recommendationengines)aresomeofthe
maincapabilitiesofthisplatform.
Industry-andvendor-runecosystemsThetechnologiesthat
connectandallowinteractionandcommercetooccurarepart
ofthe
capabilitiesofanecosystemplatform.Ie:Intuit’sFinancialAPI’s,
SAPAriba.
EmployeesBackOffice
Systems
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner–G00297286
21. 21
Information management and analytical capabilities. Data management and analytical applications
fuel data-driven decision making; algorithms automate decisions, discovery and action.
Data & Analytics Platform:
From Siloed BI to Analytics Everywhere
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SupplierPortal&
Apps
Employee
Collaborationand
Workspace
CoreBanking
Applications
EndPoint
Computing
OTSystems
CustomerPortal
&Apps
Multichannel
Interaction&
Commerce
SocialNetworks
Business
Intelligence
Customer
Analytics
Connected
Things
(Partner)
Connected
Things
(Customer)
IOTAnalytics
Connected
Things
(Internal)
EnterpriseRun
Ecosystems
Customer
FacingAPI
API
Management
IndustryRun
Ecosystems
PartnerFacing
API’s
PartnerAnd
Supplier
Analytics
Business
&Op
Analytics
Algorithm
Engines
BackOffice
Systems
Employees
Partner and supplier analytics– analyzetheservices
renderedandproductsdeliveredbyvendorsandpartners.
Includesdataprocuredfromtherapidlyexpandinglandscapeof
databrokersandopendatasets.
Business and operational analytics- analysescanbe
financial,market-focusedandprocess-focused.Dataforthese
typesofinsightswillcomefromcoresystemandbackoffice
sources,complementedbyothersources.
Algorithm engines- Algorithmandanalyticsmodelling
workbenchesarebecominganimportantcapabilityforbanks.
Setsoftoolscreateandthenrunthealgorithmsusedinallparts
oftheenterprise.
Artificial Intelligence- branchofcomputerscience
attemptingtobuildmachinescapableofintelligentbehavior.
Machine Learning - Basedonalgorithmsthatcanlearnfrom
datawithoutrelyingonrules-basedprogramming.Ie:Google
‘didyoumean..’
Artificial
Intelligence
Machine
Learning
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner–G00297286
23. 23
Algorithms are at the heart of all on-demand digital solutions. The Algorithm will blend digital, human and
operational processes that bring customers fully automated, end-to-end value to match emerging expectations.
The platform must listen, adapt, and be scalable.
Digital Banking Platform – Meeting current & Future expectations
The most successful digital solutions will combine
innovation to deliver market value and disruption in real
time, all the time.
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
Employees
Listen - is where the algorithm begins. This element
focuses on the edge or the front end of systems,
enables and triggers opportunity.
Adapt- is the heart of the algorithm. It focuses on
the IT systems and data analysis, striving to derive
meaningful insights and predictions out of raw data.
Scale is where the algorithm runs. This element
focuses on ensuring that "listen" and "adapt“ happen
every time and everywhere.
DELIVERING ON CUSTOMER EXPECTATIONS
24. 24
Digital engagement and CX initiatives are outpacing the supporting Information Systems Platform
Legacy Banking Platforms – Application Mapping
Past: Information Systems Platforms à Digital Platform
Present: Digital Platform à Information Systems Platforms
Future: Virtual Platform à Digital Platform
Data&
Analytics
Platform
Ecosystems&
APIPlatform
InformationSystems
Platform
Customer/Digital
Platform
Internetof
ThingsPlatform
The Core has Shifted - Most Legacy Banking platforms
(Information Systems Platform) were designed & launched
when banking was a ‘systems of record’ activity, with the
shift the digital, the core must be repurposed support the
customer / digital platform.
Sustaining Digital Gains - To sustain the gains made in
digital, the core investment needs to be balanced so that
True Digital Transformation can occur.
Pulling the Core – Driving Digital Customer Experience is
pulling the core closer to the customer. Digital Processes
must support the Digital Customer.
Partners
Customers
Things
SuccessFactors
SAPBankAnalyzer
SAPHCP
SAPHybris
E-
Commerce
SAPCRM
Excel
EDW
SAPHybris
Marketing
ESB
SAPCore(ECC)
Exchange
ECM
SharePoint
SAPBW
Employee
DELIVERING ON CUSTOMER EXPECTATIONS
25. 25
To deliver on the Digital promise, Banks needs to pull the core Information Systems Platform towards
the Customer / Digital Platform. Unbalanced transformation will deliver marginally decreasing returns
as the back end will not be able to execute on the digital promise.
Activate the Digital Banking Platform – Pull the Core
Horror Vacui – Nature Abhors a Vacuum.
Data &
Analytics
Platform
Ecosystem
s & API
Platform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
SuccessFactors
SAPBank
Analyzer
SAP
HCP
SAP
HybrisE-
Commer
ce
Excel
EDW
SAP
Hybris
Marketing
ESB
SAPCore
(ECC)
Exchange
ECM
SharePoint
SAPBW
Employee
Holding the Core Back Myths….
Mobile banking is sufficient to cope with CX
needs: Omni Channel should be a consistent
experience, back end or ‘execute’ platforms need to
deliver in real-time.
Ancient Solutions risky to enhance – Hard-wired
business logic and rigid transactional interfaces don’t
allow quick extensions, and some applications got
maintained to death — delivering close-to-zero
flexibility and low availability.
Risk prevents E2E transformation –
Transformation & Reinvention will be perpetual. Agility
supersedes robustness.
New Solutions / Priority unclear- Identifying the
priorities is complex; feeling of ‘no good answer’.
SAPCRM
DELIVERING ON CUSTOMER EXPECTATIONS
26. 26
Supporting the notion of rapid and constant transformation — as opposed to one-time, multiyear
change projects — and allows enhancements of existing solutions.
Digital Banking Platform – Accelerate Customer Experience, Innovate, Connect, &
Mitigate Risk
Virtualandin-memoryisthestandardforreal-time
DigitalCoreFocusesOnCustomerEngagementAndEases
Transformation.
Data&
Analytics
Platform
Ecosystems&
APIPlatform
IOTPlatform
InformationSystems
Platform
Internetof
ThingsPlatform
Partners
Customers
Things
Employees
Vena
SAPBanking
Services9.0
SAP
HCP
SAP
Hybris
Marketing
ESB
S4
Exchange ECM
SuccessFactors
Customer/
DigitalPlatform
SAP
HybrisE-
Commer
ce
E-HANA
Information Systems Platform – Agile,Robustand
Real-Time,abletoprocess,connectandsupport bank’sdigital
ambitions.TheHubofallcustomerandtransactionaldata.
Customer / Digital Platform- Flexibleandconnected,
abletointegratewithFintech’s,drivinginnovation,ableto
deliver‘in sevenseconds’.
Data & Analytics Platform–Customer&Enterprise
Intelligence,CenterforAutomation,M2M,Algorithms,
Exponential
Ecosystems & API Platform– SocialMedia
Integration,FintechIntegration,
Internet of things platform– Sensing&listeningfor
therighttimeandrightplacetomakenextoffer.
SAPCRM
DELIVERING ON CUSTOMER EXPECTATIONS
32. 32
SAP Bank Analyzer
CombiningS4andBankAnalyzerisapowerfuladvantageforBanks
Virtual views of the sub-ledger–Dynamicallyadjustor
createnewviewsofthedatasetsinthesubledgerinstantly. Data
orstructuresdonotneedtobealteredormoved.
N combinations of data views- Mergedatafromexternal
applicationsorexternalfeeds(ie:social,regulatory,exchange)to
createinfiniteviewsoflookingatBank’sdata,seekingnew
opportunityanddefendingagainstchallenges.
Continuous visibility to Profitability and Exposure–
providesanaccuratemeasurementoftheCapitalandLiquidity,
generatedandconsumed,byanypotentialcombinationofanalytical
dimensions,includingthebusinessprocessesinvolved
Continuous Activity Based Costing - Modelcostsand
revenuesfromnonfinancialdatacollectedcontinuouslyfrom
clickstreamdatainecommerceapplicationssuchashybris.
Compliance –requirestoreportin"accountingterms",the
Capitalgeneratedandconsumedbybusinesssegment,including
FairValueandImpairmentCalculationsdataonceandrollingthe
samedetaileddatainmultipleways
Digital–Abletoleveragedatainthemoment,make
recommendationsandofferstocustomersbasedonvolatiledata
sets/datastreams.
SAP S/4HANA General Ledger
SAP AFI Financial Instrument Sub ledger
SAP AFI sub-ledger
Rich Ledger Customer Instrument pricing Valuations, Classification Etc…….
GLAccount
Legalentity
(CoCd)
Trading
partner
Geography
Business
segment
Costing
Statistics
Customer
Type
Source
System
Profitcenter
/
Costcenter
Portfolio
Product
GeneralLedgerDimensions
NOBWREQUIRED
FINANCE & CAPITAL
34. 34
The DBP Enabled by HANA is Real-Time & Virtual
Digital Banking Platform
END STATE ARCHITECTURE
Note1–Cloudintegrationvia
POorHCItobedetermined
Continuous Banking is Realized
Listen - Continuous virtual views between the 5
platforms allows data, algorithms and customers
offers to be personalized and triggered based on
customer behavior & non-system activity (ie social).
Adapt- When the sensing engine identifies an
opportunity or intervention, the adapt engine
calculates an offer or the appropriate intervention
based on algorithms, rules and machine learning. This
process is designed to run ‘lights out’.
Scale – Leveraging the Listening & Adapt elements,
the system can run continuously, not bound by
geography, hours or events. Banking is Continuous.
Data &
Analytics
Platform
Ecosystems
& API
Platform
IOTPlatform
Information
Systems Platform
Customer /
Digital
Platform
Internet of
Things
Platform
Partners
Customers
Things
Employees
35. 35
An unbalanced transformation approach will fail to deliver digital expectations, great CX and increasingly increase
risk exposure for Banks.
The long-tem business model has changed, so must the architecture.
Digital Banking Platform – The urgency to tighten the gap
Withoutcorerevitalization,Banksendupwitha‘digitalfaçade’withoutasupporting
businessinfrastructureforlongrunsuccess
Data Rot-Stale data rots at an accelerated rate; when end-
users are engaging with vibrant data, quality improves.
Continuous Change- The banking industry has entered a
phase of continuous change, the architecture must be
flexible and responsive.
Modern Solutions- Modern solutions will form part of the
portfolio, modern integration must exist to participate.
Fintech Integration- ServicesprovidedthroughFintech
organizationsneedtobeenabledinastandardizedinterfaceto
encourageexperimentationandrapiddiscovery
Organizational Learning- Tighter engagement cycles
from 3 months to 3 minutes amplify data centric learning;
40,000X learning cycles are enabled reducing costs and
personalizing the customer experience
END STATE ARCHITECTURE