On June 10 Verizon hosted a panel event in New York and teamed up with US Bank and IDC Financial Insights for a discussion on the key drivers and disruptors impacting retail banking and wealth management both today and in the future. Here are five key takeaways.
- Winners Will Deliver the Best Customer Experience.
“The industry tends to talk to customers in ‘bank language’ – products, channels, accounts – rather than ‘customer language,” said Niti Badarinath, head of mobile and money movement at US Bank.
Badarinath notes that the only lasting competitive advantage is about creating better experiences. Verizon’s Chandan Sharma, global managing director, financial services agrees.
“Most people don’t look forward to applying for a mortgage; they look forward to buying a house. They don’t look forward to a car loan. They want to drive away in a new car.”
And in wealth management, Mike Versace, global research director at IDC Financial Insights, says that experience is about providing personalization to the mass affluent or high net worth individual in the right context.
- New Competition, New Rules, New Relationships.
“We’re competing with every app on your phone, not just other bank apps. Banks have started to realize that I can build an ecosystem that’s open rather than build everything myself,” said Badarinath.
Despite emerging threats to the industry via new entrants from Silicon Valley, Scott Eason, global vice president of financial services at Verizon says that banks have an incumbency of deeper relationships with their customers, but the flip side of that incumbency is “old fashioned and boring legacy,” which is why creating more a contextual relationship with consumers is key he says.
- S.M.A.C Technology to Emerge as Core.
While the industry is still suffering from a hangover from years of consolidation when it comes to legacy technology infrastructure, Sharma notes that S.M.A.C will emerge as core for banks and wealth managers with social media, mobility, analytics and cloud.
On cloud, Sharma says that while it is about infrastructure, it also provides accessibility to high velocity IT.
According to Versace, there is a shift in what banks and wealth managers view as core.
“We used to say that transaction processing is core. Today, it’s more about analytics.”
- Incident Detection Needs a Wake Up Call.
According to Bryan Sartin, director of RISK at Verizon, one of the weaknesses in security is for victims to react.
“Data Breaches are not about smash and grabs, it’s more about weeks and months. The average time to discover that you’ve been breached is seven months. Incident detection has to change so that victims recognize attacks even before the point of entry.”
In terms of roles and responsibilities, Sartin notes that it used to be the job of the chief information officer. It’s really a CEO function he says.
- Global Convergence is Essential.
When it comes to regulation in the wealth management space, IDC’s Mike Versace says that we still don’t have the convergence we need [globally] to address things like how privacy is managed, how standards for rules of conduct are enforced. Understanding the regulations of regulators around the world is critical.
In Badaranith’s view, globalization is raising the bar on expectations.
When it comes to security threats around the world, Sartin notes that organized groups are the current and future threat as opposed to individuals.
Editor’s Note: Check back with us soon to see video excerpts from our bank of the future panel. You can also view the conversation from the event on Twitter using the hashtag #fintechchat.