16 August 2017
João Bohner

Bank of the Future

João Bohner - Independent Consultant

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A post relating to this item from Finextra:

Digital transformation needs end to end thinking

04 November 2016  |  5505 views  |  0
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Alan Trefler, Founder & CEO, Pegasystems, speaks about how the double whammy of regulation and more demanding customers is creating challenges for banks, and the danger of implementing multiple point...

Holistic end-to-end backbone - Some observations

07 November 2016  |  3246 views  |  0

Mr. Alan is absolutely right in his feelings.

Now, I know that some members of the FinTech community will call me Hard Haid Moe but, with my 48+ experience in banking - technical & business - I can realize some wrong directions in the banking digital solutions evolution:

1st. Equaling the bank customer, in the same way as a retail customer, and investing billions in 'big data', Artificial Intelligence, Machine learning, when internal data is not 100% accurate and not available immediately.

2nd. Investing billions in FinTech Startups to develop innovations in the 'cosmetic side' of the financial business when the real problem - the backoffice legacy core sistems - is avoided. As Fernando Lanzer mention in his book 'Take Off your glasses': "Complication is a form of using rationality as a shield to defend ourselves from the emotional consequences of acting".

3rd. Considering IoT as an isolated process, when IoT is an underlay of major processes - even financial.

Each industry, commerce or services offer their 'products', and it has heavy marketing campaigns to get customers in each area, to buy its products. Then, yes, it's worth to know your customer's details - KYC.

Now, what is the Bank's core PRODUCT?
Money?
But money comes from shareholders and customers, right?
So, money is NOT the bank's core PRODUCT!

In other industries, the customer buys products from the store's stock. In the banks, the commodity (money) belongs to the customer rather than the bank.
So, the KYC focus of the banks should be different of the KYC of others industries.

Now, what are the interests of bank's customers?

In my simple view, they are four types of bank customers:

1. The individual customer who needs money at the moment:

It will contact the Bank and will contract the best service to fit its needs, a Loan, Leasing, Mortgage, among other offers.

2. The individual customer who needs 'to hide his dark side' securely in a strong, trusted and safe box (the bank):

It will contact with the bank to choose the best service to keep its money/assets safely.
Can be a Physical Coffer, a Current Account, a Savings account, a Time Deposit, an Investment, among others.

3. The individual customer who 'uses' the bank services to execute its Standing Instructions and other activities like:

Utilities payments, installment payments, periodic deposits, money transfers, internet shopping, cards debit/credit, physical shopping (POS), blockchain settlements, among many others.

4. The customer 'big fish' like: other banks, government, conglomerates, corporations, SMEs, M&As, institutional investors, clearing houses, central banks, stock exchange, retailers, etc. which deals with special services.

Now, if the bank's customer discovers that the bank goes to spy its 'dark side' (-KYC-), the 'trust' weakens (For the human sciences: 'trust' is a hypothesis that is realized on the future behavior of the other. From the Internet).

Again, in my simple view, the bank's CUSTOMER is WHO should have a 360-degree view of the BANK, allowing the customer itself managing its money, and not the other way.
Obviously financial advices are welcome, upon request.

So the right way to the banks win customers is in providing tools that allow customers to 'manage' their assets/liabilities/services in the safe box, swiftly, seamless, instantly and intuitively, in any channel, without having to go through multiple services menus and other barriers.
To achieve that in the right way, the business in the bank must be treated ‘corporately’ (this is the only way!) rather than by ‘line-of-business’ (silos) as is today.

Here comes the turning point, a NEW PARADIGM in the banking business handling.

And that’s the focus of the ARCHITECTURE “The Bank of the Future” that Hard Haid Moe developed. It will handle the banking business 'corporately', omnichannel.

He'll hope to make it a reality quickly.

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Holistic end-to-end backbone - Some observations

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