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Case for a Decoupled Front End

In today’s global banking environment, financial institutions need to deploy proven, game-changing strategies to attract and retain customers, slash operating costs and elevate overall efficiency. Banks are finding that their long-held focus on channels and products is no longer sufficient to meet these increasing demands. They would need to shift focus and evolve to a more customer-centric approach – one that leverages customer insight to orchestrate extraordinary customer experience while generating front-end efficiencies.

In the present scenario, banks have strengthened their branch and especially ATM network and have embraced alternate channels Internet, Call centers and Mobile banking for servicing as per the changing customer behavior and demands. Out of these alternate channels, ATM and Internet banking channels are the ones that have gained wide acceptance from customers whereas Call centre and Mobile banking still have some catching up to do.

Customers prefer online channels for simple transactions, but they also demand high-quality, personal service for more complex transactions and advice.As per recent survey by E & Y, In most markets, internet banking is the most popular channel for customers undertaking simple transactions such as paying bills. However, despite the success of internet banking, customers around the world agree that access to branches and branch staff remains crucial for overall satisfaction. This is especially true when it comes to complex transactions, which customers in all markets prefer to perform in branches.

Keeping this preference for branches in mind, Banks need to ensure speed and operational efficiency at Branches to meet complex transaction requirements ensuring that these  service/maintenance request can be met and completed at the Branch quickly itself giving satisfaction to the customer, building much needed connect and in turn giving the Branch user opportunity to cross sell other products of the bank. 

In order to provide extraordinary customer service, Bank user needs capability to get holistic view of all customer information so as to service the customer for its disparate needs. It needs capability to get the next best fit product for the customer  to facilitate cross sell of other bank product in each of the interaction.

But presently is it  possible for a user to fulfill all these mandates through a single application or Frontend? Probably not.

In their quest to have core banking and point solutions deployed for specialized needs, banks have made the situation complex for the user in a way that customer information now resides on multiple applications, one application services the customer whereas other provides the cross sell products for the customer. Banks are also required to train different users to operate these different applications to fulfill all the customer needs.  The systems and platforms deployed are of varying usage and satisfy the different business requirements of bank.

Bank user needs to log in to different applications to build a complete customer relationship view before they can resolve issues, make inquiries, conduct transactions or pitch new product offers. This reference to multiple applications by user to provide complete information to customer leads to operational inefficiency and slow delivery of services at branches. Also, the intervention of valuable human resources is both costly to the financial institution and fraught with the potential for error as users piece together a relationship view before they can apply manual, written policies. If all this occurs while a customer is waiting, costs rise as the customer experience deteriorates and the bank’s brand is diminished.

With the deployment of core banking and other point solutions, banks in different countries especially India have got married to the idea of using the front end provided by each of these applications as the user front end obligating the need for the bank user to learn and understand the working and get used to the front ends/UI  of these different applications . The different solution needed create pressure on resources, training for different solutions and incapability to service or cross sell the customer well because of user required to know and input information in different systems.

The solution to all these issues is to have separate flexible back ends (host) component and pluggable common front end. A Decoupled front end which is independent of the technologies of the different back end or host systems. Front end build on standard or flexible technology platform so as to facilitate simple and easy integration with different back end or host. This common Front end could be the single user front end for multiple solutions such as core transaction processing, customer service request management, re- payment processing and leads/cross sell management.

Banks  in lot of countries including India are  alien to the idea of having applications with separate Front end & backend component. There could be visible benefits to the separation of back end and front end of the application in up gradation, replacement of certain applications, resources training, efficiency and vastly improved customer experience .



Comments: (2)

A Finextra member
A Finextra member 28 November, 2012, 05:32Be the first to give this comment the thumbs up 0 likes

The trend is definitely towards integrated front-ends. This of course is easier to support and enhance, and provides a consistent user experience.

However the trend does not stop here. Banks also want integrated solutions that span both front-end capabilities and back-end functionalities - not necessarily back-office, but rather middle-office that takes care of all transaction processing. 

The challenge is therefore coming out with solutions that are best-of-breed, and are horizontally-wide, as well as vertically-deep !

There is no single strategy that will suit all banks, and hence a technilcally flexible solution, which has all of these as a unified offering, but is modularized, and can be decoupled into e-banking or business verticals will give significant benefit. 

A Finextra member
A Finextra member 28 November, 2012, 10:41Be the first to give this comment the thumbs up 0 likes

Agree a best of breed and flexible solution is the answer. 

In fact an essential perquisite for a solution will have to be a robust standard based integration mechanism to integrate seamlessly with different back ends. Integration mechanism flexible enough to easily  accomodate  any addition or modification of  back end SORs or peripheral solutions in the bank environment.




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