Guillermo Kopp over at Tower Group wrote this piece - Top 10 Trends in Financial Services: New Approaches in a Changing World (subscription required). It is an interesting paper, though I hope he will write some follow-up pieces as there are some really interesting areas that are dealt with very quickly! Anyway, to quote from the summary, two main themes seem to me to require enterprise decision management (EDM) for an effective response:
- TowerGroup has found that, for both retail and wholesale interactions, consumer preferences will influence the financial services agenda.
- To improve delivery channels, products, and services, FSIs are embarking on a creative race for competitive differentiation and giving priority to strategic technology initiatives.
So consumer-driven banks offering creative differentiation across multiple channels through complex sets of products and services. All in a heavily regulated world where you need to get a return on compliance and where enterprise fraud management and enterprise risk management are critical. Wow. Fortunately, adopting EDM can help with all of this. Although Guillermo talks about the use of predictive analytics, and to a lesser extent business rules, I think that a focus on operational decisions and on automating, improving and connecting decisions using decision services is what it will really take. This brings together his initiatives around customer intelligence, business process management, risk and compliance, predictive analytics and more. Some particular thoughts on using EDM to address these issues then:
- The need for loyalty and customer-focus in banking means focusing on growth decisions and delivering more (and better) self-service in part because younger, more tech-savvy consumers will demand it
- These same consumers will want to have more influence over how their banks make decisions
- Banks need to deliver on the promise of many, differentiated products both hits and niches and be agile enough to stay on top of changing products as egg's award-winning solution does
- A focus on customers means both relationship-pricing and connected decisions across the customer life cycle
- The paper emphasizes both change and uncertainty and managing these requires adaptive control to keep experimenting, keep learning, keep improving
In the end I believe that banks can use EDM to build the bank of the future and this banking story shows the difference between an EDM way and the old way. I would also recommend this great book on customer experience - Chocolates on the Pillow are not enough - which uses experience in the hospitality industry to discuss how other industries (including banking) must become more customer-centric (which means being decision-centric).
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