15 December 2017
Lee Cameron

Lee Cameron Monitise CEO

Lee Cameron - Monitise

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Retail banks and retailers: do department stores offer a possible blueprint for tech success?

19 December 2016  |  10400 views  |  0

The role of bank CIO has always been a high-pressure one. It is characterised by the need to ‘keep the lights on’, continuously using data and technology to innovate, juggling budgetary restrictions and the potential implications of banking regulation.


Despite the CIO’s best efforts, simply updating a legacy system is no longer enough to meet the evolving demands of the modern banking customer. As Chris Skinner of the Finanser recently wrote when describing the emergence of the Internet of Things in banking, “incumbents must be agile, nimble and digital, but they were built for being slow, risk averse and physical”. This is why all too often banks have ticked the ‘innovation’ box with theatre – tips and tricks that give the pretense of innovation without actually working to get something new into customer hands.


However, there is real pressure to integrate specialist products and services, such as those offered by the army of disruptive fintechs emerging from the UK tech scene. It is critical for banks, who would benefit from opportunities to make operations leaner and more focused. Banks and fintechs have been advised time and time again that collaboration is key and they need to work together. CIOs don’t need to be told again. Instead, they need to be offered solutions that can make that collaboration actually happen.


The 2017 World Fintech Report from Capgemini and LinkedIn noted that a majority of financial institutions (60 per cent) now view fintechs as potential partners, but that less than half of executives (44 per cent) are happy with their execution strategy. When it comes to execution, CIOs should look outside of the financial services sector for inspiration. In particular, lessons can be taken from long-established department stores and tech unicorns alike.


The Selfridges model


It may sound like an unlikely idea, but the CIO could look to department stores such as Selfridges for a blueprint of how to improve agility. Just as department stores have branded ‘concessions’ on the shop floor under the umbrella of their own brand and identity, banks are already slowly beginning to replace elements of their legacy operation with branded services from fintechs.


However, as the more forward-thinking CIOs are learning, this takes much more effort to operate efficiently than simply plugging new services into a bank’s digital platform through APIs. Following the Selfridges model, when fintechs plug into their new operation, banks can establish ‘rules of engagement’ to ensure consistency of experience across the banks’ whole offering.


As a PwC report from earlier this year points out, structures and processes are often not set in stone for many fintechs. This means they can adapt much more easily and align to the banks’ brand ‘norms’ fairly early on in a partnership process. Maintaining a seamless, consistent experience is key – from one concession to another or from one banking service to another. Same brand, same experience, different tech. Integration into the tech core, plus integration into the business, brand, and customer relationship supports this.


Customer-centric tech


Department stores have been around for decades. However, the customer experience principles around consistency that have made them so successful are not too far away from those of some of the most powerful tech companies dominating the industry today.


One example is Airbnb. When customers book through Airbnb, regardless of whether they are booking a trip to a penthouse in New York or a hut in Nairobi, the online service that a customer receives is the same in terms of process and experience. It has a standard model that can be easily adapted, with customer-centricity at its core. Like a department store or franchise, the quality of the experience should be the same each time.


Customer-centricity is a common theme. A brand can only sell under a department store umbrella if it adheres to the high standards that have been set for service within that store. Airbnb provides the same experience for a host or customer using the site regardless of where the booking is for or where it’s made from.


Following these principles, the way forward for the bank CIO is to position the bank as a central operator. The bank’s identity will remain at the heart of customer activity, utilising the existing position of trust with customers, brand recognition, and knowledge of the regulatory environment. When fintech partners then join, they should then not only plug into APIs but also be initiated into the bank’s standardised, cultural brand and operate under this umbrella.


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I was appointed CEO of the group in September 2015. I have been with the company since its formation as a member of the founding management team. Appointed to the Board in 2008 I have held a number of...

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