Celent Model Bank Awards 2017: Banking Products Innovation

Celent Model Bank Awards 2017: Banking Products Innovation

This is the next article in a weekly series highlighting trends and themes from Celent’s Model Bank submission process. For more information on how the Model Bank Awards have evolved, see the first two pieces from my colleagues, Dan Latimore and Zil Bareisis

This week’s article focuses on Model Bank entries in the Products category. Part of the criteria for this category is that the solution needs to be in production and demonstrating business benefits. The Products entries for 2017 fall broadly into four sub-categories:

  • Payments Product — for launching the best consumer or business payments product.
  • Lending Product — for the most impressive consumer or business lending or collections initiative.
  • Open Banking — for the most impressive API strategy and results so far.
  • Product Innovation — for demonstrating the ability to launch multiple innovative products.

The majority of submissions in the Products category came from banks in developing markets, with only a handful from large global banks. The Model Bank award submissions came from Argentina, Germany, India, Korea, the Philippines, Poland, Russia, Singapore, South Africa, Spain, Taiwan, Turkey, UAE, and USA.

The Products category submissions were impressive indeed:

Payments: The submissions in this area focused on modernizing existing banking and payments infrastructure. With consumer expectations growing for real-time transactions and unified information across channels, banks are layering new capabilities onto legacy frameworks. Capabilities include accelerated check clearing, enhanced mobile wallets, simplified fraud controls, and streamlined charitable donations.

Lending:  Possibly threatened by alternative lenders, banks in this sub-category are improving the speed and convenience of loans for micro and small businesses. Some entries focused on expanding application channels, both digital and physical. New digital channels include SMS/text, ATM and Facebook. Physical channels include the local coffee shop. All of the submissions featured faster loan decisions through advanced analytics and paperless (or almost paperless) loan closings.  

Open Banking: Open Banking APIs have moved beyond hackathons and proofs of concept to production implementations. While some banks are rolling out Open API development portals in response to regulations like PSD2, the Model Bank candidates in this category are using APIs to improve the customer experience. The submissions represented two approaches to Open Banking. The first is the use of open APIs to connect directly with customers and developers, enabling transactions including B2B payments, personal remittances, loan disbursements, and e-Commerce refunds. The second is the use of open APIs as the core foundation for digital-only banking models. Third-party developers then create value-added client-facing applications using the bank’s exposed API services.

Product Innovation: This sub-category features partnerships with both traditional financial technology and start-up Fintech firms to make banking more convenient, create new offerings, improve customer service, expand a bank’s digital footprint, and personalize marketing offers.  

Want to hear more about the Celent Model Bank winners for payments product, lending product, open banking, and product innovation? Join us for the 10th annual Innovation and Insight Day on April 4th in Boston. In addition to revealing the winners of all the awards, Celent analysts examine the trends that are driving innovation in Banking. I look forward to seeing you there.

Model Bank 2017: Small Business and Corporate Digital Innovation Themes

Model Bank 2017: Small Business and Corporate Digital Innovation Themes

This is the fifth article in a weekly series highlighting trends and themes from Celent’s Model Bank submission process. For more information on how the Model Bank Awards have evolved, see the first two pieces from Dan Latimore and Zil Bareisis. This particular article is focused on innovations in small business and corporate banking:  two critical market segments for financial institutions as they seek revenue growth and relevance in the evolving digital B2B marketplace. 

When evaluating this year’s Model Bank submissions that are targeted at small business and corporate clients, we identified a number of excellent initiatives in each of the five overall categories:

    Customer Experience

    Products

    Operations and Risk

    Legacy Transformation / IT Platform Innovations

    Emerging Innovation

For these two segments, the Model Bank award candidates come from Europe, North America, the Caribbean, Asia Pacific and the Middle East. Despite the wide geographic spread of the submissions we received, certain common themes became evident that are important to highlight, 

Enhancing client experience is paramount: Banks are intensely focused on how to deliver solutions to clients in ways that are convenient and easy to use in order to meet the emerging expectations of business users based on their consumer experiences with technology. Creating a consolidated point of access for all corporate banking services using portal technology that eliminates the need for multiple logins and security procedures was just one of the types of initiatives that were submitted.  Mobile and tablet access are becoming mainstream channels for employees of business and corporate clients to effectively manage their daily workload no matter where they might be located.

Improving digital channels is not enough to succeed: The initiatives that demonstrate significant quantifiable benefits to banks and clients are those that address the inefficiencies in the way that bank employees interact with their clients but also involve the elimination of paper-intense, manual workflows both for the client and the bank. From the use of videoconferencing technology to access experts in trade finance for advisory services to the replacement of faxed instructions with digitally signed transactions initiated on mobile phones, banks are finding innovative ways to contribute to their own efficiency while also improving client productivity. Another critical element of the digitization of these processes is speed. Automation enables faster decisions (for example for credit approval) and this provides business with a superior service and the ability to manage their businesses rather than managing their banking relationships. These initiatives drive revenue growth and loyalty because the bank’s services provide quantifiable benefits to clients that are seeking to leverage technology advances in order to more effective manage their working capital.

Reinvention in Small Business Banking: I was struck by several of the initiatives that represent an entirely new way of thinking about how to enable entrepreneurs and small business owners to succeed. Rather than tweaking traditional banking solutions that are designed for consumers or larger businesses, several of the banks submitted initiatives that reflect an entirely different way of meeting the needs of small business clients. Recognizing that the needs of entrepreneurs and start-ups fall well beyond the services that a bank traditionally offers (i.e. credit, payments, cash management), a few innovative banks have attempted to reinvent business banking by offering a complete, integrated package that combines traditional banking activities with non-banking services that extend beyond even the adjacent types of solutions that banks typically make available through partnerships (e.g. payroll services). The goal of these packages is to offer a business owner every piece of business functionality and technology they would need to grow their business. What makes these solutions especially impactful is that they are designed from a business owner’s perspective and don’t reflect a bank-centric view of how the client should manage their business. 

I hope this brief description whets your appetite for more discussion on our award winners in small business and corporate banking at the 10th annual Innovation and Insight Day on April 4th in Boston. I look forward to seeing you there.

European Payments: Breathing a Sigh of Relief (For Now)

European Payments: Breathing a Sigh of Relief (For Now)

In our recently published report on Top Trends in Retail Payments we quoted a European payments professional:

“If the publication of PSD2 gave the industry a headache, then the publication of draft RTS gave it a heart attack.”

Of course, he was talking about the draft regulatory technical standards (RTS) that the European Banking Authority (EBA) has been tasked to develop for how the industry should implement Payment Serivces Directive's (PSD2) requirements for strong customer authentication and secure communicationThe draft RTS published in a consultation paper last August was indeed rather draconian. One of the key proposals was "not to propose exemptions based on a transaction risk analysis performed by the PSP” and to keep “the authentication procedure […] fully in the sphere of competence of the ASPSP [Account Servicing Payment Service Providers, i.e. banks].” The draft RTS has united the industry to an extent rarely seen before – representatives from payments, cards, e-commerce, small merchants, digital technology, telecoms, travel and industries have expressed concerns that the EBA’s standards implemented in their current form would “make online shopping much more onerous than it is today and have a wider and chilling effect on the Digital Single Market.”

Thankfully, it appears that the EBA has been listening. The final standards have not yet been published, but yesterday, Andrea Enria, Chairperson of the EBA gave a speech at the Westminster Forum, and has given the clearest indication yet that the EBA is open to changing the RTS. Specifically, according to the speech, the RTS when published will:

  • Introduce two new exemptions, one based on "transaction risk analysis" and the other for payments at so-called "unattended terminals" for transport or parking fares. Transaction risk analysis exemption will be linked to maintaining predefined fraud levels and will be reviewed after 18 months.
  • Contain some changes to the existing exemptions, such as increasing from EUR 10 to EUR 30 the threshold for remote payment transactions. However, there will be no further exemptions for e.g. corporate payments.
  • Outlaw the current practice of third party access without identification (e.g. ‘screen scraping’) once the transition period under the PSD2 has elapsed and the RTS applies.
  • Maintain the obligation for the ASPSPs to offer at least one interface for AISPs and PISPs to access payment account information. A requirement has been added requiring banks to provide the same level of availability and performance as the interface offered to, and used by, their own customers, as well as to provide the same level of contingency measures in case of unplanned unavailability.
  • Remove references to ISO 27001 and other specific, technological characteristics, to ensure technology-neutrality and allow for future innovations.

It will be important to review the details when the final RTS is published, and of course, much work will still have to be done by the industry to ensure compliance. Yet, it seems that the payments professionals in Europe may breathe a sign of relief – the heart attack may have just been averted, at least for now.

The Enduring Importance of Physical Engagement in Retail Financial Services

The Enduring Importance of Physical Engagement in Retail Financial Services

I take no issue with the growing importance being placed on digital in financial services. Indeed, it does not take extensive examination to see, in Wayne Gretzky’s words, “where the puck is going”. Digital needs to be a top technology priority among financial institutions – particularly in highly digitally-directed markets such as North America and Western Europe. But, that doesn’t mean physical engagement is unimportant. In my opinion, in-person (physical) engagement will be of lasting importance in financial services for at least three reasons:

1. Most consumers rely on brick and mortar for commerce and will continue to do so.

2. Most retail deposits still take place at the branch.

3. Most banks do not offer a decent digital customer acquisition mechanism

Most Consumers Rely on Brick and Mortar for Commerce

This week, comScore released its most recent measurement of digital commerce. It was truly exciting, with Q4 2016 m-commerce spending up 45% over 2015! But, even with that astonishing year-over-year growth, m-commerce constitutes just 21% of total e-commerce. And, with two decades of e-commerce, total digital commerce comprised just ten percent of total commerce in 2015. Plenty of consumers still like stores. * FRB Consumers and Mobile Financial Services 2011 – 2016, Percent of smartphone users with bank accounts
** US Department of Commerce, Internet Retailer, Excludes fuel, auto, restaurants and bars
***comScore

Digital is not equally important across segments. Books and music, for example, are highly digital. Not so much for food and beverage. I’m being simplistic for brevity, but the data suggests that most commerce will remain tied to the store experience – at least in part – for the foreseeable future. I don’t think financial services will be an exception.

Most Retail Deposits Still Take Place at the Branch

Banks are keen to migrate low-value branch transactions to self-service channels, and there is perhaps no better low-hanging fruit than check deposits. Yet, with a decade of remote deposit capture utilization behind us, a January 2017 survey of US financial institutions (n=269) clearly shows that the majority of retail deposit dollar volume still takes place in the branch. Like it or not, the branch remains a key transaction point for many consumers and small businesses. Sure, the trend lines support digital transaction growth (thank goodness), but we have a long way to go – farther than the hype would suggest.

Most banks do not offer a digital account and loan origination mechanism

Even as banks would love to acquire more customers digitally, most aren’t well prepared to do so. Unlike most every other retailer on the planet, most banks initially invested in digital banking for transaction migration, not sales. That is changing, but not quickly. The mobile realm needs the most work. In a December 2016 survey of North American financial institutions, Celent found that large banks, those with assets of >US$50b, had made noteworthy progress in mobile customer acquisition capability since the previous survey two years ago. Smaller institutions lag considerably. For these reasons, branch channels are getting a make-over at a growing number of financial institutions, with the objective of improving channel efficiency and effectiveness – effectiveness with engagement, not just transactions. Celent is pleased to offer a Celent Model Bank award in 2017 for Branch Transformation. We’ll present the award on April 4 at our 2017 Innovation & Insight Day in Boston. In addition to presenting the award trophies to the winners, Celent analysts will be discussing broader trends we’ve seen across all nominations and will share our perspectives why we chose those particular initiatives as winners. Make sure you reserve your slot here while there are still spaces available!

Rethinking the Customer Experience: Themes from the 2017 Model Bank Submissions

Rethinking the Customer Experience: Themes from the 2017 Model Bank Submissions
This is the third article in a weekly series highlighting trends and themes from Celent’s Model Bank submission process. Dan Latimore and Zil Bareisis led off with two great pieces on the evolution of the Model Bank Awards.  Articles from this week on will explore some of the broader themes within each category. Customer experience initiatives are typically the most numerous.  While this makes the category more difficult to judge, it offers immense insight into what’s happening in the market. The standards of customer engagement are constantly changing, and banks are experimenting with new ways to drive increased satisfaction, higher revenue, and greater loyalty.  Three themes stand out this year. Digital banking subsidiaries: Many banks are finding that existing systems are too rigid to accommodate a truly digital experience.  A number of customer experience submissions this year focus on building out separate digital subsidiary brands within traditional institutions. Banks are typically going in two different directions.  The first is a digital subsidiary as an offshoot of the parent bank.  These brands are basically separate products that offer a digital-first experience to a certain demographic, but are closely tied to the main bank. Brands are similar and products/ services are frequently cross-sold. The second type is a completely separate brand ring-fenced under a different technology stack, operating under the umbrella of the parent organization but effectively a separate entity.  These banks may leverage the parent for product support, but are usually sandboxes for “testing” digital.  Submissions were a mix of the two approaches. Fintech partnerships: The shift from disruptive to collaborative relationships between financial services and Fintech startups feature prominently in this year’s award submissions.   They range from standard B2B vendor relationships to more advanced functional partnerships where portions of the Fintech’s offering is exposed within the traditional institutions digital UI.  Initiatives reflect the growing acceptance among the industry that banks can’t be all things to all people.  Institutions are acknowledging the valuable and complementary role Fintech can play in providing a modern, innovative customer experience. AI and bot technology: Bursting out of the gate in 2015/16, Banks have begun a mad dash towards AI and other bot technologies.  This is a broad spectrum of projects that include everything from simple bots to cognitive computing.  Submissions this year show institutions spreading their resources across many different applications.  Like any emerging technology, most institutions are in a “test and learn” phase.   These technologies are at varying levels of maturity, but the potential to revolutionize the customer experience through AI may be truly transformational, and Celent was pleased to see so many projects in this space. This is just a taste of what we’ll have in store at the 10th annual Innovation and Insight Day on April 4th in Boston. We’ll be diving much deeper into the various topics, revealing the winners of all the awards, and discussing how they combined serious innovation with tangible business benefits to stand out from so many strong contenders. I look forward to seeing you all there.

Fintech’s Beneficiaries: Two Approaches to Regulation

Fintech’s Beneficiaries:  Two Approaches to Regulation
British Prime Minister Theresa May visits the United States this afternoon to address a gathering of Republican lawmakers in Philadelphia, followed by a visit to the White House tomorrow.  Tomorrow’s meeting is noteworthy, as Prime Minister May will be the first foreign leader to meet with President Trump since the latter’s inauguration only last week. The timing is also interesting, as only two weeks ago outgoing President Obama’s National Economic Council (NEC) released a new whitepaper called A Framework for FinTech.  The NEC, a policy advisory unit of the White House established in 1993, proposed 10 high-level principles designed to move the US fintech industry forward. The FinTech whitepaper resulted from the White House’s FinTech Summit in June, 2016 that brought together a wide range of bankers, policy makers, and other interested parties, and subtext of the whitepaper was that cooperation between all stakeholders would yield greater innovation in financial services, as summed up below..
“[A] policy strategy that helps advance fintech and the broader financial services sector, achieve policy objectives where financial services play an integral role, and maintain a robust competitive advantage in the technology and financial services sectors [will]  promote broad-based economic growth at home and abroad.”
Innovation in financial services has been on the agenda of the British government dating back to 2002, when the UK Competition Commission concluded that lowering the barriers to entry in the provision of financial services to small and medium-sized enterprises (SMEs) for competitors would improve service and lower prices paid by SMEs.  The 2002 report spurred on additional studies by various UK regulators regarding the impact of industry consolidation in banking on the outcomes for retail and SME customers. Fast-forward to February of 2016, when HM Treasury published a report of the Open Banking Working Group (OBWG) that essentially mandated many of the recommendations made by the 2014 Fingleton Report that talked about use cases and potential benefits of open APIs to drive innovation in banking and expand competition.  A blog entry by my colleague Patty Hines represents an excellent summary of this report. So while both the US and the UK governments promote innovation and growth in  fintech, they come at it at a slightly different angle, as is seen in the August, 2016 follow-on report of the UK’s Competition and Market’s Authority (the successor regulator to the Competition Commission).
“[O]lder and larger banks do not have to compete hard enough for customers’ business, and smaller and newer banks find it difficult to grow. This means that many people are paying more than they should and are not benefiting from new services.”
Even as this statement hints at subtle differences in policy goals, thankfully there’s no need to take one side or the other, as ultimately innovation in financial services can achieve both goals.  Whether creating customer advantage is a stated goal or merely a collateral benefit of fintech, the movement towards opening up the banking system through more accessible APIs will ultimately benefit not only the consumer, but the financial institutions themselves. Clearly, banks need to continually work on sharpening their game in the use of emerging technologies in order to maintain their competitiveness, but for the moment the dance floor remains open for those who choose to embrace innovation rather than fear the change that is to come.

Three Common Mistakes Banks Make

Three Common Mistakes Banks Make
In my work as a research analyst, I run into three particularly common mistakes. Banks aren’t the only ones that make these mistakes. I make them too and have to be vigilant to avoid them.
1. Failure to appreciate diversity of needs or preferences
2. Failure to appreciate the shrinking half-life of facts
3. Failure to skate to where the puck is going
Let’s look at each one briefly…

Failure to appreciate diversity of needs or preferences This is utterly common. You see it in headlines all the time. “Millennials this…”, “Small businesses that…”, Community banks are…”. The trap involves extrapolating limited data to an entire population. Two current examples illustrate: The Use of AI in Banking is About to Explode. Apart from confusing AI with predictive analytics (which is more broadly used), the article asserts “explosive” future adoption of AI right around the corner. I’ll just say that this assertion vastly overstates planned adoption of AI among North American banks based on recent Celent research. Bank on Changes. Among other things, this pleasant article states “Smaller community banks like Edison, which emphasize personal service, said they have no plans to scale back drive-through or other services at brick-and-mortar locations.” While referring to a small number of community banks interviewed for the article, it projects those results on the entire community bank population.

So, are community banks planning on maintaining their current brick-and-mortar services in their entirety – despite the growth in mobile banking utilization? Some are and some aren’t. the figure below displays results a very question posed in a December 2016 Celent survey of North American financial institutions. “Compared to your current branch count, how many branches do you expect your institution will operate five years from now?” The report is not yet published. The idea is simple: banks serve diverse markets and make a diversity of decisions as well. The diversity of expected response is glaring in this data! So as not to give away too much of the report’s contents, I refrain from graphing the results of that question by asset tier. Failure to Appreciate the Shrinking Half-Life of Facts Assertions abound about customers, what they do, want and value. Some data points supporting these assertions are dated. This is increasingly dangerous. Samuel Arbesman argues for a shrinking half-life of facts in his book, The Half-Life of Facts. Most substantive change takes a while to accomplish – particularly among large organizations. I think many banks are at risk by assuming the facts as they knew them at the beginning of a protracted initiative will remain after the initiative is finished. When it comes to mobile, for example, six months is a long time and a year is eternity.

Failure to Skate to Where the Puck is Going Even those of us who aren’t hockey fans are familiar with the famed Wayne Gretzky quote about skating to where the puck is going instead of where it has been. I saw this up close and personal as part of a research effort exploring the current and likely evolution of retail delivery channel technology. Omnichannel delivery clearly remains aspirational at most institutions (I’ll defend that assertion thoroughly in the upcoming report). Yet, even as most surveyed institutions concede the importance of omnichannel delivery, the significant majority are not yet meaningfully engaged in bringing it about. How could that be? Many banks – particularly those with below industry average mobile banking customer utilization – aren’t feeling the pain yet. They are skating to where the puck has been. When they do feel the pain, it will likely be the result of much damage already inflicted.

Introducing Celent Model Bank 2017 Awards

Introducing Celent Model Bank 2017 Awards
As my colleague Dan Latimore wrote in the article that began this series, 2017 was the best ever year so far for Celent Model Bank programme in terms of quantity, quality and diversity of nominations. As we went through the judging process, we felt a range of emotions – grateful and privileged to receive so many amazing stories, and daunted by the prospect of having to pick the most worthy award recipients. In the end, we are excited and confident about our selection of winners, yet we are sorry that we could not recognize so many others that clearly also deserve recognition.

Over its ten years of existence, Celent’s Model Bank programme has always changed and evolved. In the last few years we have been awarding multiple initiatives in a small number of categories – for example, last year we had four winners in Digital Banking Transformation, the busiest of seven categories. While all the awards within the category were equal, we knew that some institutions craved for more exclusive recognition. This year, we decided to take it a step further and to introduce specific named awards with only a single winner for each award.

After long deliberations, the judging panel decided to recognise 21 initiatives as winners of the following Model Bank 2017 awards:
  • Consumer Digital Platform – for delivering an outstanding digital experience for consumers. The award is open for traditional financial institutions, digital-first, and challenger banks.
  • Small Business Digital Platform – for delivering an outstanding digital experience for small businesses.
  • Corporate Banking Digital Platform – for delivering an outstanding digital experience for corporate clients.
  • Consumer Banking Channel Innovation – for the most creative use of consumer channels, or the most effective channel integration.
  • Branch Transformation – for the most compelling branch transformation initiative, including branch format innovations and creative use of live agents.
  • Product Innovation – for demonstrating the ability to launch multiple innovative products.
  • Open Banking – for the most impressive API strategy and results so far.
  • Payments Product – for launching the best consumer or business payments product.
  • Lending Product – for the most impressive consumer or business lending or collections initiative.
  • Fraud Management and Cybersecurity – for the most creative and effective approach to fraud management or cybersecurity.
  • Risk Management – for the most impressive initiative to improve enterprise risk management.
  • Process Automation – for the most effective deployment of technology to automate business processes or decision-making.
  • Employee Productivity – for improving employee training or collaboration, incentivising employees, or enabling mobile agents.
  • Payments Replatforming – for the most impressive project to improve payments back office, e.g. payment services hub implementation or cards replatforming.
  • Core Banking Transformation – for the most compelling initiative to transform a traditional core banking platform.
  • Banking in the Cloud – for innovative approaches to implement a banking platform, e.g. deploying in the cloud.
  • Banking as a Platform – for creating an ecosystem of partners via a banking platform that connects and enables third parties.
  • Emerging Technology for Consumers – for creative deployment of emerging technologies for consumers (e.g. AI, ML, API, biometrics, wearables, voice, blockchain, etc.)
  • Emerging Technology for Businesses – for creative deployment of emerging technologies for small business or corporate clients (e.g. AI, ML, API, biometrics, wearables, voice, blockchain, etc.)
  • Most Promising Proof-of-Concept – for the most promising experiment – pilot or proof-of-concept – with emerging technologies.
  • Financial Inclusion – for efforts to bring financial services to unbanked and under-banker communities.
And of course, we also kept our Model Bank of the Year award, first introduced in 2012, which recognises one financial institution that in any given year simply stands out from the crowd and uniformly impresses Celent judges.

For the time being, only the nominees will know if they won any of these awards, as we begin working with them to distill their achievements into a series of case studies. We will be announcing all winners publicly on April 4 at our 2017 Innovation & Insight Day in Boston. In addition to presenting the award trophies to the winners, Celent analysts will be discussing broader trends we’ve seen across all nominations and will share our perspectives why we chose those particular initiatives as winners. Make sure you reserve your slot here while there are still spaces available!

Channel Strategy for Corporate Banking: Is Your Bank Paying Enough Attention?

Channel Strategy for Corporate Banking: Is Your Bank Paying Enough Attention?
According to the GTNews 2016 Transaction Banking Survey Report, 91% of North American corporates are evaluating their cash management partners. Of those, 27% indicated that improving availability of online and mobile banking tools were a major reason for reviewing their bank relationships, and 55% cited the need for an improved customer experience. Clearly, these responses are evidence that large numbers of corporate clients are less than satisfied with the channel tools and the overall digital client experience being offered.  Most of the banks we interviewed for recent research on this topic are hearing loud and clear that clients are looking for more streamlined, convenient, and faster access to banking services and information.  Our recent report, Strategies for Enhancing Corporate Client Experience: The Future of Attended Channels looks at strategies that leading North American and global banks are adopting to achieve the following goals:
  • Build out integrated portals to make invisible the organizational and product silos inherent in corporate banking.
  • Simplify the user experience.
  • Establish an omnichannel approach to providing consistent data and access to transactions across channels.
  • Enhance authentication options, including biometrics.
  • Expand self-service, including the ability to securely exchange documents and open accounts and new services.
While we found broad agreement on importance of the themes described above, we identified other aspects of digital channel strategy that varied widely from bank to bank.  The graphic below summarizes those opportunities for differentiation. Celent recommends that banks take the following steps to optimizing their future investments in attended channels:
  1. Define the Digital Strategy for Corporate Banking, Not Just the Digital Channel Strategy.  In the current environment, attempting to implement a successful strategy for digital channels in the absence of an overall digital transformation strategy for corporate banking is short-sighted.
  2. Understand How Attended Digital Channels Fit into Clients’ Daily Workflow.  Product management and strategy executives at many institutions are driving prioritization in channels based on a set of assumptions about client preferences that may not be valid. Mapping those client digital journeys from onboarding to servicing to managing exception situations for each client persona is critical.
  3. Reexamine the Role of Partners.  In reality, the delivery of services through attended channels has always involved multiple partners, whether the bank has developed an “in-house” solution or offers one or more off–the-shelf vendor solutions. As demands for “non-core” banking functionality grows and technology evolves to enable easier integration with multiple partners, the importance of the bank maintaining control of the user experience layer that is seen and touched by the client becomes even more critical.
The decisions being made today about attended digital channels — whether as a part of a larger digital transformation initiative, enhancing the channel user experience, or establishing a corporate banking portal — will have a significant impact on the ability of corporate banks to attract and retain clients.

Model Bank 2017: Some First Impressions

Model Bank 2017: Some First Impressions
Growing up, a family Christmas tradition was that my mother would ritualistically proclaim, “That’s the most beautiful tree ever.” It seems that way with Celent’s Model Bank awards, too. In our tenth year we’ve just been through more than 150 submissions, and just like my mother, I can say that this was the best crop yet. The quantity emphatically broke records, and the quality was outstanding. Ongoing innovation in banking technology is clearly beginning to pay off, and we’ve been privileged to learn an immense amount from all of the financial institutions that took the time to tell us about their how they’ve been using technology and innovation to serve customers better, become more efficient, and mitigate risk.

Those who’ve followed the Model Bank Awards closely will note that our awards format has evolved to follow the market over the years. As the imperative to be more customer-centric has become more pressing, it has in turn begun to blur the lines between one of the oldest ways to divide banking: channels. And lines elsewhere begin to blur, too – for instance, should a mobile payments initiative be in mobile, or in payments, or in its own category? We’ve addressed this conundrum with five categories chosen to provide a broad cross-section of the banking landscape.
  • Customer Experience
  • Products
  • Operations and Risk
  • Legacy Transformation / IT Platform Innovations
  • Emerging Innovation
The entries were exceedingly diverse, and came from repeat submitters and new participants. EMEA led the pack quantitatively, with APAC and North America roughly the same, and the strongest showing yet from Latin America. We expected to see nominations around digital banking, branch and core transformation, and payments, to name a few, and we weren’t disappointed. We were also pleasantly surprised to see intriguing initiatives involving employee productivity, cross-selling, AI, Biometrics, and Blockchain.

Inevitably some will be disappointed; there were so many worthy initiatives that the judging was the most difficult by far. It’s certain, though, that Celent analysts will have a full plate for the next two months as we reach out to our Model Banks and complete the work of distilling their rich stories into pithy case studies that illustrate the incredible innovations banks are undertaking today.

As for what you can expect between now and April 4 in Boston, look for a series of articles from the Celent analyst team highlighting some of the many insights that we’ve gleaned along the way. We’d recommend that you check back in; as we notify the winners and begin to develop our case studies, we’ll keep you posted with a series of articles like this one that detail some of the insights.

And while space is filling up fast, there’s still time to register for 2017 Innovation & Insight Day, April 4, 2017 in Boston, Massachusetts. Find out more about last year’s event here.