Defining the digital-first strategy for FIs

Published September 10, 2021

We’re all seeing the term ‘digital first’ more and more—but what does it really mean?

GM Spotlight: Terry Duffy, General Manager for NCR’s Software and Professional Services business, discusses what digital-first means and how FIs are embracing it.

Digital-first. It’s a term that’s been gaining traction for years and now it’s everywhere. But what is it? While it may not be intuitive, digital-first is actually pretty simple. When it comes to, for example, making a payment, digital first means consumers can do it using a digital device—whether that’s using a smartphone, tablet or a computer. And digital first is now at the heart of banking.

Banking has been around for centuries, but for the last 70 or so years technology has played an increasing role in running the bank. Today we’re seeing FIs using technology as a catalyst to transform the institution—whether it’s enabling new business models, offering new products, simplifying the ecosystem or delivering greater experiences to consumers and the staff that serve them.

As consumers increasingly “think” with their smartphones first the banking sector needs to think this way, too. FIs must ensure that their technology reflects the experience consumers get on their phone or table—simple, intuitive, efficient and sometimes even fun. Digital first is at the heart of the strategy to deliver exceptional experiences that seamlessly bridge all channels providing a common, smartphone or tablet-led, experience.

Why has ‘digital first’ emerged in banking?

Many people ask why now? Essentially, banking is in the same place retail was a few years ago, where different channels have emerged over time. Take mobile over the last 5-10 years, online in the late 1990s, ATMs in the 80s and 90s and branch systems back in the 1970s. These channels continued to operate and evolve in their own silo, most often completely disparate from any other channel.

And each channel has its own technologies, architecture, standards and business rules. That means it’s expensive to develop and integrate, and consequently there’s resistance to change and FIs are slow to adapt to changing business needs.

But, like consumers did in the retail environment when they wanted the same experience whether they were purchasing online, instore or via an outlet or concession, banking customers are now demanding a frictionless journey. They want the ability to move their transaction between channels whether they start it on their phone, further it at the ATM and then ask for branch support to complete it—having the same experience in each channel (for every touch point of their transaction). 

"Santander has moved 200 servers to the cloud every day over the past two years."

Source: Computer Weekly

Embracing modern tech to deliver integration

The advent of common technologies to deliver an enhanced user experience—think HTML5, CSS, tile and gesture based—coupled with better middle- and back-office tools such as enterprise-driven apps, cloud native, APIs and microservices means that it’s easier for FIs to begin integration across (and with) their silos.

And by moving to a shared-services approach, the tech stack can be dramatically simplified; the technologies in play can be modernized, impacting business rules, applications and infrastructure. Through the use of APIs, FIs can easily add new technologies or channels without lengthy and costly development or integration time. Meanwhile with micro- and shared-services, a single development team is able to create a modern user experience so business flows across mobile, online, ATM and the branch using the same technologies and standards.

This modernized approach to banking architecture means that FIs can deliver a customer experience that is new, innovative and resonates with consumers. You can do more with such a foundation, meaning you can create greater value and have increased stickiness with customers. 

"We're seeing FIs shift to cloud-native shared services and a contemporary UI/UX for customer touchpoints across all channels. It's imperative to innovate and enhance the experiences customers have as they engage with their FI."

Terry Duffy, GM NCR Software and Professional Services

Modernization in action

We recently worked with a top-five United States FI that was facing the challenge of a legacy teller system that was complex to manage, expensive to maintain, hard to enhance and difficult to use. Replacing this system with a cloud-native set of shared services meant the FI’s 10,000 or so branch staff were able to easily assess their system via a PC or tablet and enjoy that same tablet interface we’ve all become used to. By modernizing their architecture, the FI has a much simpler set of technologies that are cheaper to run, easier to maintain and allow new services to be quickly integrated and brought to market.

Another example is using APIs to connect different channels and improve their interoperability to further enhance the customer experience. For instance, marketing systems enable customers to select their ATM screen preferences—be it fast cash options, language, preferred transactions—but to set this up it needs to be done by phone.

But with open APIs, consumers are now able to set up their ATM screen preferences via their digital banking mobile app. And not just for that FI, but for other banks’ cards, too—meaning you could be providing an even more personalized experience for your competitor’s own customer if they have accounts with more than one institution.

Maybe not easily understood, digital first simplifies modernizing your operations

The benefits of a digital-first approach are not just for staff, nor just for consumers. The same technology can be applied where it makes sense—back or front of house and across the full set of channels; ATM, mobile, online and branch. That’s the promise of a digital-first approach. So while it may be a term that isn’t necessarily immediately easy to understand, digital first does make innovating, providing the best customer experience and running your business more simple.

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