In the financial services sector, there is a narrative that old banks are too set in their ways to change. Relying on decades of technologies built on legacy systems surrounded by modern point solutions, today's typical bank is a hodgepodge of complexity.
This culture doesn't stop at computers. Banks have a propensity to silo departments and workforces, making it hard to establish modern digital economy fundamentals, such as data sharing and back-to-front integrated workflows and processes. Consequently, new features like faster customer onboarding and transparent bank-wide processes are pipe dreams.
But these perceptions are wrong. Look no further than the Spanish multinational bank BBVA. Established in 1857, it has adopted all types of technologies along its history into layers of legacy. Yet, today, BBVA onboards customers within minutes, uses bank-wide data sharing and predictive analytics, and strategically prioritises sales and service. The results include a 41.7% reduction in its cost-to-income ratio and 150% growth in new customers.
How did a 167-year-old bank accomplish all these things? It created a platform-based nervous system for the entire organisation.
Creating a banking nervous system
Dealing with banks can feel schizophrenic. At the front, customers and employees engage with new systems, mobile apps and many digitally enhanced services. Yet, it doesn't take much to run into problems.
For example, when new customers want to join the bank, they tend to fill in paper forms. Existing customers might want a new service, but then are asked to repeat information their bank already holds in other products. Employees are bogged down by inaccessible information or elaborate and time-intensive know your customer and anti-money laundering checks.
"Banks struggle to make experiences seamless for both customers and employees," says Warren Olivier, ServiceNow's Financial Services Lead. "It's not just about culture or legacy systems. Some of the customers I'm speaking to, their biggest challenges include trying to understand which path to take that can improve multiple services – credit cards, home loans, etc – what path should they take for a single engagement, single experience layer that connects everything for them?"
Creating strategic visibility and streamlining processes doesn't require ripping out incumbent systems or tearing down silos. Disconnected silos are the problem, and the best way to connect the various parts of a bank with minimal disruption is to do what BBVA and numerous other banks have done: create a banking nervous system by layering an engagement platform across everything.
"The most effective modernisation strategy for banks is to use a single engagement layer on a platform that supports financials services business models," says Muhammed Omar, ServiceNow's Africa Country Manager. "Such a platform is built on single data model and architecture. It digitises work flowing across the organisation from the front office to the back office, driving hyper-automation and empowering employees to automate at scale with no code-low code capabilities. These platforms also allow to accelerate new opportunities, such as generative AI due to the single data model."
Choosing the right platform
Some banks attempt to build bespoke platforms. However, it's more practical to use a third-party workflow platform. Vendors such as ServiceNow are dedicated to developing pedigree platform solutions with vertical specialisations.
Working with banks and other financial institutions, they develop big libraries of financial service workflows that often work off the shelf or require very little configuration. For example, ServiceNow collaborated with VISA to develop a single, connected dispute resolution solution for issuers.
"The big thing for banks is that they are used to being ahead in technology. Traditionally, that meant they had to develop bespoke solutions because there wasn't anything available when they needed it, or the solutions were not up to standard for their risk and regulation requirements. But the right workflow platform can now bring all the advantages of a bespoke platform without the development headaches or replacing established systems," says Olivier.
Workflow platforms are not just helping established banks. Omar says new challenger banks are also using these systems to become more competitive: "With newer banks, their challenge is to build small, scale out fast and attract more customers faster. They often use the same workflow platforms to get those results without encumbering their IT environment."
Whether banks struggle to modernise due to old yet reliable technology, necessary silos or workflows that move between the modern front, messy middle and opaque back, they don't need to replace it all. By using workflow platforms with focused solutions for banking verticals, they create a nervous system across everything, empowering everyone: new customers, existing customers and staff at every level, and further can embed GenAI into the process.
"A single experience layer interconnects all your different disparate silos," says Olivier. "That, ultimately, increases your efficiency and reduces your time and cost to serve."
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