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Examples of Innovation in Retail Banking: "They Do Exist!"

Jenni PalocsikMany might say that innovation and banks don’t fit into the same category.  Although retail banks are traditionally fairly conservative--their highly regulated industry makes them pretty “risk averse” when it comes to trying out new technology--several shining examples of innovation were recognized during Celent’s recent 2013 Insight and Innovation Day in Boston.

Quoting Santa from the M&M®s commercial [right before he faints], “They do exist!” And, I’m pleased to share a few examples with you. Innovation in retail banking—delivered, not simply conceived—is something I want to highlight.

The premise is this: “What would it look like for a financial institution to do everything right with today’s technology?”

And for the sixth year, examples of today’s best practices in financial services technology were recognized with Model Bank awards across seven categories:

  • Infrastructure and architecture
  • Product development
  • Marketing and sales
  • Customer service and support
  • Loan processing
  • Transaction processing
  • Security and risk management

These companies didn’t have to be doing everything right, but in the category in which they were recognized, they delivered components of a theoretical model bank’s technology and best practices.

And introducing a new category this year, Celent Impact Awards were given to celebrate the significant impact that some banks were making with relatively straightforward initiatives. These examples were so logical, yet impactful, that Celent was left asking, “Why aren’t more banks doing this?”

This year 20 financial institutions were recognized for 21 components (one received two awards), representing 12 countries across North America (9 institutions), Asia (10 institutions) and EMEA (3 institutions).

A few of my favorite innovations were Bank of Montreal, recognized for their online appointment booking; Commonwealth Bank of Australia for their “Right People, Right Place, Right Time” initiative; and University Federal Credit Union for their branch transformation project.

You can make an appointment for a dental cleaning or a haircut, so why can’t you make one to open a new bank account so you can avoid the line? Bank of Montreal is successfully using the online channel to drive sales traffic to its branches, scheduling appointments to ensure the right sales associate in their face-to-face channel is available at the right time to meet with a customer based on their specific needs.

Commonwealth Bank of Australia was one of the first banks to be recognized in the new Celent Impact Award category. Their multi-faceted program delivered improved customer service by optimizing its retail banking workforce. The bank improved the retail branch channel by using newly deployed workforce optimization (WFO) and desktop and process analytics (DPA) software from Verint: Impact 360® Workforce Management for Retail Financial Services and Impact 360® Desktop and Process Analytics.  Data from these solutions gave management visibility to current operational processes and helped them identify opportunities to implement changes – and see the result of those changes right away. Through their initiative, Commonwealth Bank simultaneously improved sales effectiveness, introduced new business processes for improved productivity, and improved customer service.

University Federal Credit Union received a Model Bank Award in the category of Distribution / Channel Management for their branch transformation project, a program based on assisted self-service technology, complemented with full-service pods and collaborative workstations. This credit union successfully rolled out technology, organizational and cultural change as part of the new model in their branches. Reported results included doubling sales productivity and operating expense reductions of $400,000 per branch in the first six months.

Model Bank of the Year was given to BBVA Compass for their real-time core migration project, a huge undertaking when you consider its scope and complexity. This “component” consisted of migrating its legacy core system in the US for more than 700 retail branches, as well as its commercial and wealth management accounts, to a modern real-time system. So far the bank has significantly reduced costs  and implemented a variety of business process improvements with the new platform. It also has other projects planned and underway.

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