Single View of a Customer: are financial institutions still seeing double?

So is Single View of a Customer (SVoC) or Single Customer View (SCV) new?

Single view seems to have made its debut as part of the Deposit Guarantee Schemes Directive (DGSD) (December 2010) to ensure that compensation can be paid out quickly in the event of a Bank default. But Single View Of a Customer must surely have been in existence prior to 2010 or before the new entrant and challenger banks started to emerge…

Challenger banks and new entrants are fighting for those last remaining USPs that will galvanise customers into switching from their current provider at a faster rate than the 802,036 customers who switched during the first nine months of 2016 (source: BACS CASS dashboard 20 October 2016).

But these USPs need to be underpinned by systems, solutions and the latest FinTech, often from multiple providers, to deliver both a dream service to customers and the rewards the new entrants and their investors are looking for.

The shopping list of components grows and once the new entrant has a full basket and has gone through the checkout, they need to complete the task of plumbing all of these components together to create that seamless customer journey to (and beyond) customer satisfaction.

These shopping list items have often originated from multiple providers, from those on robust platforms with many years of implementation experience, through to the latest and greatest on the most leading (and sometimes bleeding) edge technology.

Will they talk to each other? Do they want to talk to each other and can we expect them to work together? “Who’s the Daddy…?” becomes the issue: which one single component will step up to the plate to orchestrate the other components, what to do and when to do it, all whilst delivering 24×7 availability?

It all boils down to how that Single View of a Customer is delivered: if each component operates in its own little world and creates a customer profile and footprint that is stored in that little world, then how is this information shared, analysed and used to provide an enhanced customer experience? In such a scenario, there seems little chance of creating the bigger picture and instead we continue with lots of small, single dimensional views of the customer.

Both the Customer Relationship Management system (CRM) and the Core Banking host have big parts to play in solving this dilemma, but that still leaves us with two primary candidates vying for the key role of providing the Single View of the Customer. The Core Banking host clearly has its role to play in storing financial information and in maintaining the lifecycle of the account. Likewise, the CRM looks after customer interaction – but it is also looking after prospects before they mature into customers, an area which may not be covered by the Core Banking host.

Let’s use the scenario of customer complaints to help us understand the answer. The complaint may be about an interaction that has taken place, what was said or perhaps what was not said to the customer. The catalyst for what turns into a complaint may have been an interaction which can be traced back through the CRM.  However, the counter-argument from the Core Banking host side might be that the complaint could be down to an issue with the lifecycle of the product, a payment problem, a fee charged or the amount of interest paid. This analysis from the FCA shows that complaints can arise from a number of areas within a bank:

pie chart: 60% Advising, selling, arranging; 26% general admin/customer service; 11% T&Cs; 1% Arrears related; 2% Other

(Source: Financial Conduct Authority – March 2016)

So who has the edge over the other components on the single view at this stage? It has to be the CRM, doesn’t it? After all, it manages the interactions and holds the non-financial view. However, we have to guide the CRM, as it is not a single ‘fix-all’ on its own: we need to consider the number of external service providers, how they are working together and whether they are using standard communication platforms and methods not only to output information but also to receive fresh inbound data. This leads to a parent-child relationship, where the CRM (and that’s a unified CRM platform) is the parent and all of the other service provider components need to abide by the standards and toe the line.

The CRM needs to be fed information that is accurate and consistent in real-time (or as near as it gets). It needs to be able to know when customer interactions take place, what was the nature of the enquiry and who is handling it. If further interactions arrive, who is available to manage these, as there is little point in routing to already busy agents or distributing multiple interactions for the same customer to different agents. A customer interaction routed to a customer advisor they have previously spoken to or one that has dealt with their case in the past should increase the level of customer satisfaction by at least a couple of points.

So, by first accepting that customer delight and attraction may require some complexity within the solution design, an SVoC solution should:

  • start from the CRM host and build out
  • maintain clear flows of data where the latest data set resides in the CRM
  • use common communication methods
  • rationalise the number of external service providers to maintain a single focused view

But the main message here is – don’t underestimate the potential complexity and critical importance of creating your information and single customer view strategy at the start of your journey, especially where there are multiple service providers involved.  Putting off your SVoC strategy until later can leave you with a siloed, inefficient and costly environment to manage………

What do you think? Leave a reply below or contact me by email.

Challenger banks have challenges of their own

If you think that the UK’s High Street banks have had it tough over the last few years, spare a thought for the new kids on the block…

Sure, the big 4 have had to deal not only with the credit crunch, product mis-selling, systems failures and outages, increased regulation, the CMA, the FCA and new regulations such as MiFid II and soon – very soon – PSD2, where all banks will have to allow access to their customer account information to third parties via open APIs. But they now also have to deal with nimble start-ups with appealing propositions who can cherry pick the most attractive and most profitable customers and offer them a well thought-out product set with excellent – and targeted – customer service. Or even just a single product, one that has been honed and finely tuned to satisfy a specific market demand, be it the highest-paying savings account or a transactional account with all the bells and whistles but without the so last century chequebook. And what’s even worse for the High Street banks is that they have to try and compete with these start-ups – or upstarts – using a creaking legacy infrastructure which isn’t fit for purpose in the digital age.

So it’s really an unfair fight, isn’t it? It’s as if the High Street banks are playing with a marked deck, or with one arm tied behind their back, while the Challengers hold all the high cards and can pick off the incumbents at will, much like Monty Python’s King Arthur fighting the Black Knight. Or is it….?

While the incumbents have had to contend with IT systems which were developed in the 1970s, around the time of the widespread deployment of ATMs and when internet banking wasn’t even a twinkle in the eye of Tim Berners-Lee, the Challengers DREAM of having an IT infrastructure to fall back on, or a data centre, or even a Call Centre. Mostly, they have an idea and a target market to go after but they lack the systems and services wherewithal to realise their ambitions. They often have to rely on a systems provider who gets them part of the way to their goal, but who lacks the Business Intelligence and Analytics component or the Business Processes support capability needed to create a comprehensive systems solution.

This means that Challengers have to partner with a number of other providers to realise their goal of an integrated, seamless IT and services offering to support their customer and product ambitions, mostly with a set of components which are not quite as integrated as they would like and where information exchange and a single customer view is far from seamless. In short, they tend to end up with a “legacy infrastructure of the future”, instead of a flexible, upgradeable solution that moves with the times and has built-in future-proofing – which is really how all such systems should be designed and implemented today.

So, the Challenger Banks might be nimble in terms of product development and responsive in terms of customer service but, in reality, their supporting IT solutions can sometimes be as much of a patchwork as an incumbent’s legacy infrastructure, although carefully concealed behind the veneer of a digital front end and a slick mobile app. Not so much a state-of-the-art solution, more of a dead parrot. That’s quite a challenge…

What are your views? Do you think the Challengers have it easy? Are they about to eat the incumbents’ lunch? Or are they faced with exactly the same infrastructure problems and integration issues as their bigger and older competitors? Please leave your comments below or contact me by email.

My blog was originally posted in Finextra on Wednesday 29 June to coincide with the press announcement of Sopra Steria as digital partner of choice for the new UK challenger bank “The Services Family”.

Mobile payments?

Oh no!” (I can hear you say) “Not another blog about mobile payments…” Well, yes… and no.

I’m probably as fed up as you are with a lot of the stuff that gets written about “mobile payments” – almost as fed up as I am with the nonsense that people write about “mobile wallets”, but that’s a whole different discussion.

Why am I fed up? Well, basically because many of the blog posts and articles and much of the commentary around mobile payments cast too wide a net and addresses products, solutions or developments that are way wide of the mark when compared against a proper expression of a mobile payment implementation. All of this noise helps to perpetuate the idea that anything which involves:

  1. a mobile phone, and
  2. a payment of some sort

automatically qualifies as a “mobile payment”.

So, if I take out my Samsung Galaxy S4 and use the Chrome browser to call up the Tesco Dotcom site, place an order for groceries to be delivered over the weekend and then pay for the goods by entering my credit card details, then that’s a mobile payment, right? Or if my friendly neighbourhood plumber fixes that annoying leak under the sink and he accepts my credit card payment (well, it was an emergency!) by using his iPhone connected to an iZettle card reader, I’ve just made a mobile payment, haven’t I?

Compare that to walking into your nearest Starbucks with your Starbucks Rewards app open on your iPhone and presenting the “Pay” barcode to the scanner at the till to buy a caramel macchiato and a chocolate muffin – see the difference? It’s not the best example of a mobile payment by a long way, but at least it’s heading in the right direction insofar as you haven’t had to supply any payment credentials at the point of interaction to effect the payment (as in the Tesco example above) and you haven’t had to provide your plastic card to complete the transaction (as in the payment to the emergency plumber). Instead, information related to a payment card – in this case, the Starbucks Rewards card linked to a pre-paid account has been transferred from your mobile phone to the point of sale terminal, and all you had to do was wave your iPhone screen in front of the scanner.

If you want to get technical about it, you had to open your iPhone, which requires a screen swipe and (hopefully) a passcode; then you had to look for and open the Starbucks app; then you had to click on the “Pay” button and then orient the iPhone screen in such a way that the barcode could be read by the awkwardly positioned laser scanner… But it was easy, wasn’t it? And you got a star for making the purchase with your Starbucks Rewards card (in your iPhone app). So maybe it wasn’t that easy and it could have been better designed to ensure a smoother, more convenient customer experience, but it’s still more like a “real” mobile payment than the other examples above, despite its sub-optimal implementation.

So, in my view, there are true mobile payment solutions and there are other implementations which are “mobile payments” in name only. But what makes a good mobile payment product, as far as I’m concerned? Well, there are a number of factors at play in building a fit for purpose solution in the mobile payments space, including security, functionality and ubiquity of acceptance, but most of them revolve around the customer and the customer’s experience of using the mobile payment solution. I talk about this aspect of mobile payments and what customers are looking for in a mobile payment product in my recent white paper on mobile payments as well as discussing what makes a mobile payment a mobile payment. Take a look at it: it might help you appreciate why I get fed up with some of the stuff that I read about “mobile payments”.

What do you think? Post a reply below, contact me by email at liam.lannon@soprasteria.com.

The future of mobile payments is contactless

Mobile payments may well be set for a period of explosive growth, according to the recent Guardian article “Mobile payments: the brave new cashless future”, but it won’t just be down to Apple Pay, despite its apparent success since launching in the US in October of last year.

Yes, Apple Pay might be convenient and secure – two of the three consumer-centric attributes which MasterCard’s Jorn Lambert identified in the same article as key to the success of m-payments – given its reliance on a tokenized set of card credentials in an embedded Secure Element, a Touch ID payment authorisation process and a slick user interface. However, it falls short when it comes to the third attribute identified by Lambert, namely ubiquity. Never mind that Apple Pay is only accepted at the 3% of US retail terminals which have been upgraded to support contactless payments, it is also only available today on the iPhone 6 (and soon on the iPhone 5 for anyone who pairs it with an Apple Watch) so it definitely won’t be everyone’s favourite way to pay, at least in the short term.

Separately, Kevin Dallas of Worldpay took the view that merchants need to ensure that they partner with the “right” payment app since research suggests that consumers will only load one or two payment apps on their phones to avoid confusion. Since in-store retail payments still account for over 90% of all payment transactions by dollar volume, we would argue that the “right” mobile payment app for merchants to support is one which is optimised for use at a point of sale (POS) terminal. The following might help those merchants who are still sitting on the payments app fence come to the right decision:

  • Apple Pay was launched to support both in-app and tokenized in-store NFC (contactless) payments
  • Samsung Pay has just been launched to support both NFC and magnetic secure transmission technology (MST)
  • Google have recently announced support for Android Pay which uses NFC and tokenization
  • MasterCard announced (Sept 2014) that all legacy POS devices in Europe must support contactless payments by 1 January 2020, with all new POS devices to be compliant from the start of 2016

Merchants who today accept card payments will – in five years or less – be accepting contactless card and mobile payments. Those merchants who today do not accept cards but who want to accept mobile payments would do well to consider a future where smartphone penetration is expected to reach 6bn subscriptions by 2020, where the dominant handset models will be mobile payment and NFC-compliant and where their competitors are servicing customers with these handsets at contactless POS terminals for both low and high value transactions.

That’s right: the future of mobile payments isn’t cashless, it’s contactless.