Winning Digital Strategies: Innovative Banking

Last week, the forth event of the Winning Digital Strategies series was held in Moscow by the Vedomosti business daily in partnership with the National IT Leader Prize. Top managers of large banks met at the round table to share cross-industry experience and ideas regarding retail banking digitalization.

Digitalization is changing people’s habits by increasing consumer service requirements, thus fueling a shift towards a customer-centric development strategy among banks, with digital technologies being the main driving force of this development. At the event, CROC, MTS Bank, Ural Bank for Reconstruction and Development, DeltaCredit Bank, Home Credit Bank, Citibank, B&N Bank, and URALSIB Bank shared their business cases and discussed how digitalization opens new customer interaction channels and transforms the approach towards customer service.

Sergey Isaev, Director of Customer Base Management Department at Home Credit Bank, told the attendees that the bank shifted focus towards going online where the number of customers increased manifold.

Elena Skuryatnikova, Head of E-Business Development and Support at Citibank, shared the bank's plans to reduce the number of offices without getting rid of them altogether, as well as to expand the capabilities of smart kiosks already being used in its offices, once the biometric data law comes into force.

Vadim Belopolsky, Managing Director, Head of E-Business Department, Ural Bank for Reconstruction and Development, believes the market offers many banking products that are either way ahead of their time or remain unwanted and this is why the bank's top priority is personalized communication with customers. According to him, banks now need to implement new digital services into their existing infrastructures burdened with legacy banking systems.

Ivan Barsov, Director of Resale and Segment Marketing Department, MTS Bank, noted that a bank can obtain more publicly available data from digital environment rather than a strictly regulated telecom segment.

Svetlana Shmykova, Head of E-Sales and Services Department, Uralsib Bank, said that their bank was undergoing serious transformation to find more effective customer communication channels, with its new analytics and forecasting system already covering all banking products and real-time marketing modules being now implemented. According to Svetlana, obsolete IT infrastructures may prevent banks from adopting digital services, and not all customers are ready for remote banking.

"Today, we can see how rapidly digitalization is changing traditional service provision approaches. Modern customers get used to instantly receive information and therefore push banks to develop their digital services. This is why the customers wish banks would offer them what they need exactly when they need it, in real time. In such a context, real-time marketing technologies can give banks a unique toolkit to quickly evaluate customer needs, take informed decisions, and make a tailored offer. Real-time offers drive sales and improve customer loyalty," noted Svetlana Shmykova.

Alexey Smirnov, Director for Integration Solutions, CROC, said that legacy banking IT systems hamper omnichannel customer service, with 'omnichannel' often being misinterpreted as 'multichannel'. Alexey believes that banks today apply a multichannel model for digital user interaction, when not every communication channel is involved in offering a service. For example, a bank makes a personalized offer by phone or via a mobile app, but when a customer comes to the bank’s office, its employees know nothing about the offer made. Meanwhile, an omnichannel approach provides for the integration of all online and offline methods of communication for consistent and seamless service provision.

The expert also noted that banks do not need to completely rebuild their IT infrastructures to adopt a new digital banking model. Instead, they can opt for integration platforms and microservice architecture to adjust and then further develop their existing infrastructures. Where it is impossible to improve legacy systems, a bank can use robots to emulate the functions of specialists in existing systems according to preprogrammed standard scripts.

According to the speaker, such an approach will help banks improve flexibility and verify their hypotheses by themselves, independent from suppliers and counterparties that provide data from external sources. Alexey highlighted the Data Lake solution, which accumulates all data coming from both internal and external sources in a unified scalable infrastructure, features flow processing of hypotheses, and is a big help for data scientists, with CROC both using this solution itself and helping customers with relevant implementations. CROC's mathematical modeling experts detect data patterns and dependencies to provide businesses with verified hypotheses that will help them develop individual offers.

Furthermore, Alexey told attendees about open-cycle processing of personalized offers, another crucial problem banks face today. For example, a marketing specialist offers a one-click-away service, which is unavailable via the bank's IVR, and therefore inaccessible for customers. Due to poor integration, information about customers and offers made to them cannot often reach the so-called 'last mile', i.e. where the service is actually provided. Alexey believes this problem can be solved by mandatory data transmission from Data Lake to remote channels, offices, and a call center.

"As noted earlier, obsolete IT infrastructure hampers banking digitalization. Having realized that our customers need flexible IT infrastructures, we launched a new 'Digital Generator' service provided by our agile team of experts, from data scientists to IT architects and marketing specialists. This team, jointly with a customer, develops new digital services and determines the infrastructure changes required for implementation," said Alexey Smirnov.

Daria Kuchina, Head of Digital B2C Solutions Development Team at Digital Service Department, DeltaCredit Bank, spoke about mortgage lending digitalization. In 2016, the bank launched a web app for customers, realtors, and bank partners to seamlessly interact with the bank via a secure channel, avoiding information duplication and operating expenses. The bank intends to further develop its business by leveraging digital technologies.

Elena Tyatenkova, Department Director at B&N Bank, said that digitalization helped complete the merging of ten banks into one on a rather tight schedule. Today, B&N Bank is focused on studying and using foreign peers’ digital channel experience.

Sergey Isaev, Director of Customer Base Management Department at Home Credit Bank, emphasized that they served about 36 million customers during 15 years. For the customers, the bank deployed its own marketplace to sell products by installment.

Mikhail Bashlykov, Business Development Director, CROC, noted that the development of digital service and remote access channels in the banking sector calls for greater focus on security and that new legislation regarding biometric identification of citizens will push the remote banking market forward.

Mikhail also told attendees about the benefits of speech analysis technology being actively used by CROC's customers in contact centers. Moreover, CROC's video surveillance service, based on easy-to-use and low-cost cameras, allows customers to identify visitors and ensure more personalized communication, with banks and retailers already using this service.

“Digital technologies are conquering the world and offering new opportunities to evolve, grow, and go digital. This is where our country may be among leaders, because many Russian banks have already been boasting of successful hi-tech product and service implementations, helping them maintain a competitive edge, while their customers are going digital. For major market players, this event was a great opportunity to both adopt best banking service digitalization models and identify the right vector for banking transformation,” said event moderator Alexey Korovin, Co-owner and CEO at Active Learning.

ABOUT IT LEADER PRIZE

The Annual National IT Leader Prize was established in 2002. The Organizing Committee includes the Russian Managers Association, iBusiness web portal; Dengi and iOne magazines (Kommersant Publishing House); Intelligent Enterprise; and CROC.

Information Partners (in the past): Business FM radio station, The Analytical Banking Magazine, and Systems Administrator and BIT. Business & Information Technology magazines. Information TV Partner is World Business Channel. Finally, the online partners are Comnews, ICT-online, IT Manager, CRN, CTA (Contemporary Technologies in Automation), The National Banking Journal, and Global CIO magazines.

The IT Leader Forum is a landmark event in Russia which has been held since 2002 and is attended by over 300 executives and IT directors from the Russian and international companies. Last year, presentations were delivered by top managers from Yota, Enter Svyaznoy, Moscow United Electric Grid Company, URALSIB Bank, Sberbank of Russia, etc. In the past, IT Leader Forum special guests included: Steve Wozniak, Apple co-founder; Thomas Frey, Executive Director and Senior Futurist at the DaVinci Institute; Peter Hinssen, co-founder of Across Group and CEO of Across Technology; and Josep Curto, CEO at Delfos Research and professor at IE Business School Madrid.

For more information, please email to pr@itleader.ru

About Vedomosti Praktika

Vedomosti Praktika means:

  • Venue for open dialog, opinion exchange and discussion of the most pressing business matters, progressive ideas and innovative technology
  • Venue for Russian and international business communities to meet and analyze and apply the best corporate management practices
  • High-level attendees and speakers: executives and business owners, top managers, heads of representative offices and departments of Russian and international companies