Wearing the “new black” with style even with old boots

In my last post, I wrote about how Omnichannel initiatives in retail banking are ‘the new black’ - offering the best hope for getting into step with modern digital times and customer demands. I further explained why despite this, retail banks keep kicking Omnichannel into the long grass: the daunting task of moving beyond ‘silo monolithic legacy IT systems, fear of compromising security and failing to analyse budgets appropriately (or at all).

These opposing forces have led to an escalating standoff between organisations, including industry regulators, which are urging banks to modernise and IT professionals who vigorously defend old mainframe technology, believing it to be more safe, secure and stable than modern technology. With each passing day, the risk escalates for more IT disasters like the now legendary RBS payments failure of 2012.

Fortunately, it’s possible to establish a middle ground in this standoff and chart a pragmatic way forward that enables retail banks to migrate their IT systems at a reasonable pace, while using them to full advantage while they’re still in place. Here’s what it looks like:

The stages on the road to Omnichannel

Every organisation’s journey will be different, depending on their situation and the following list is by no means comprehensive. However, based on our conversations with retail banks, these are some fundamental IT steps on the road to Omnichannel for those running legacy systems:

1. Optimise and leverage an Enterprise Data Warehouse (EDW) - The traditional data warehouse (DW) is strained by exploding data volumes, resulting in people not being able to get the analytics they need in time to take appropriate action. However, expanding DW capacity is usually very expensive. The EDW architecture is a hybrid that enables retail banks to augment, rather than replace, their existing data architectures with Hadoop to improve DW performance. This provides the infrastructure that enables a wide range of data sources to be blended, for example existing CRM and financial data with online data sources or new types like Hadoop online. Industry analyst Quocirca's free report "Optimising the data warehouse" explains this in detail.
2. Establish a data refinery to handle security and regulation concerns - Retail banks’ security strategy can’t be limited to storing data in siloed monolithic legacy IT systems until the end of time. These systems will eventually buckle under the volume and variety of data. A major US securities regulator, which ingests a staggering half a Petabyte of data every day and has to store all incoming data for 7 years adopted our Streamlined Data Refinery (SDR) model in order to balance the amount of data access required by its analysts with growing regulatory demands. An SDR approach enables organisations to blend, enrich and refine any data source into secure, analytic data sets, on demand. Bloor Research provides an excellent overview of this model in its free report “Managing the Data Asset with Pentaho”. Through its SDR, the US regulator expects to dramatically reduce time spent on preparing data for its analysts, while delivering relevant data sets with governance, on demand.
3. 360 degree customer view - once your have your SDR set up to deliver cleaned, governed data and processes for blending different data types together, you’ve now done the heavy lifting needed to provide that 360 degree view to your customer-facing employees in areas like sales, customer support or finance. The 360 degree view blends various operational and transactional data sources to create an on-demand analytical view across customer touch points.
4. Omnichannel - With the 360 degree now available to your own customer facing staff, it’s a short hop now across to Omnichannel. The 360 degree view provides the foundation to present information to different external audiences through various channels - in-branch, assisted and digital interactions and whatever new comes along. This stage includes training those interacting with the data to get the most out of it to improve and track customer satisfaction and other benefits.

As you continue through these stages, you have the option to continue using your legacy systems so that you can handle migration at a pace that meets your budgetary, security and functional requirements.

In other words, there is a proven way to make the “new black” look stunning, even if you have to keep wearing very old boots for a while longer.