A Burning Platform

    By David Gore, Head of Industries at BJSS

    David Gore

    For the Financial Services industry, if there is one thing that is now certain, it is that there has been a significant shift in how banking products and services are being constructed.

    Let’s look at what banks need to do today. They are now expected to be able to scale up or down at will, process transactions in real-time and develop alliances or competitive offerings to negate the impact of challengers in the market. This is on top of maintaining core legacy systems, figuring out how to redesign systems that were built for reliability rather than open architecture and responding to new requirements.

    Oh, and provide open banking capabilities. Be a digital-first institution. And let’s not forget the need to deliver shareholder value.

    The list is almost endless. The advent of mobile and the violent jolt that the pandemic has recently caused has only exacerbated these challenges.

    And that’s without even considering the customer’s wants, needs and demands. Truthfully, it is a tough ask for anyone to master. But it is one that needs to be mastered.

    And that is why we believe that the current model is a burning platform for banks. There is a current need to improve efficiency and customer experience (try having a complex product query answered in the current climate…) but at a time when customer preferences and needs are in a constant state of flux. At the moment, different channels are meeting different needs; this means the customer journey is disjointed at best and broken at worse.

    For us, banks need to rapidly refocus on how they optimally connect and serve their customer base by being channel-agnostic. This has also been heightened due to the COVID-19 pandemic, with banks now needing to demonstrate a fully integrated channel strategy whilst also focusing on creating next-generation solutions to meet new and evolving customer needs.

    They need to focus on a little to achieve a lot.


    Banks should promote the mastery of digital basics to the highest of strategic statuses. It is as simple as that. There’s the adage that it takes roughly 10,000 hours’ worth of effort and investment for an individual to become an expert at something – the same goes for digital execution.

    Over the past decade, banks have faced challenges which their inflexible, monolithic and legacy architecture has struggled to adapt to. It’s understandable. As we’ve already said, reliability has been the watchword for the industry for many a year.

    But that doesn’t mean that it is right.

    The challenger banks – Revolut, Monzo, Starling – are disrupting the model. They’re making banking easier and much more inclusive. How? They’re prioritising and investing in, the absolute basics. And it is the right thing to do.

    The basics have a clear and fundamental role in a banks operation and relationships with their customer. It enables engagement, education and experience. And in our post COVID world, these three areas will be of even greater importance. It’ll enable broad gains in productivity, enhance speed and efficiency across a range of services and products and provide significant value through increased revenues and reduced costs.

    So, what to do? Here are our four learnings to implement;

    • Design for speed and simplicity; ensuring that products are both fast to complete and require as little input as possible. Aim for something which is effortlessly efficient.
    • Design for responsiveness; too frequently, organisations are happy to frustrate customers by having unresponsive websites. Aim for ease, speed and utility.
    • Design to complete; not for you, but for the customer. Abandonment is an issue, so provide a feeling of progression and ownership. Aim for people to invest in the product through experience.
    • Design to deliver; the fable stands, if you have a negative experience, you’ll tell five times as many people as you would have you had a great one. Aim to engage and delight across the entire experience.

    We’ll also let you in on a secret. There’s a real quick win for banks in this and it’s pretty simple. Push all non-value-adding interactions to digital channels through customer education. Now. Sure, banks need to educate customers on the how and why, especially with older demographics, and they shouldn’t neglect their employees in this regard either (it’s about re-purposing these colleagues rather than retiring), but to automate and strip out the mundane is a no-brainer.


    Invest and innovate. Arguably a counterintuitive argument at present, but global shocks bring moments of truth. They can rapidly alter any landscape and the terms of competition, often in ways which we never predicted. Or thought possible. But, those that make bold moves during times of crisis are often the ones who come out the other side stronger, healthier and much more profitable.

    That’s why we say that banks will need to increase their pace of testing and adopt a “now, new, next” approach—ensuring that they have a pipeline of sales-generating incremental innovation (now), efforts trained on breakthrough innovation (new), and true game-changers (next).

    To stay competitive against the emerging ecosystems and challengers, banks must make big bets on which battlegrounds to fight in and, subsequently, which technological, digital and analytics use cases to master.

    This requires a forward-looking perspective on how consumer behaviour, the competitive landscape, and technology are likely to change in three years or more. What are the potential disruptions? What will the growth areas and profit pools be? Important choices will revolve around products, services, functionality, customer interfaces, service options, and loyalty.

    A prime example of this evolving behaviour is the increasing use of remote advisory over the phone and internet when supported by relationship managers. There is also a geographic angle to this; scanning the Nordic market to understand the digital maturity in the region will help inform and educate UK banks on what they can do to accelerate. Remote advisory got its first real foothold in the Nordic countries but is now expanding rapidly.

    Take Sweden. The percentage of consumers who received remote advice jumped from 25% in 2016 to 44% in 2018. That’s a huge increase driven by an enhanced, and value-led, digital initiative.

    It’s our opinion that the most successful banks will embrace technology as the primary driver of commercial effectiveness and cost reduction across their value chain. To be clear, it’ll be their use of technology that sets them apart as leaders rather than laggards; at the moment, early adopters are typically capturing 2-5% more in EBIT than slower-moving competitors.

    Digital solutions, advanced analytics, automation and artificial intelligence can have a far-reaching impact on customer engagement, commercial activities, processes, and back-office operations.

    Technology isn’t going to stop evolving though, and banks aren't going to stop implementing and utilising it. But they must dedicate the time, investment and resources to start strategically taking advantage of new technology to leverage its full capacity.


    To tackle a legacy estate and expect that the transformation will run smoothly and hit the time, quality, and budget metrics you put in place is naïve. Problems will arise, delays will occur, and malaise will hit. Many millions over many years will be spent for little progress.

    But speed is at a premium and agility must now become a way of life for banks. There are, of course, cost benefits associated with implementing flatter structures with flexible networks of teams, but agile companies are three times faster at going from ideation to implementation and two times more likely to take bold risks to transform the customer experience.

    Ultimately, our view is that banks should develop solutions to enable quick change via adopting patterns to change part of the software incrementally to adapt to the current requirements. In essence, this is the strangler approach; you identify, tackle, replace and repeat. You won’t change the monolith, but you’ll adapt new capabilities which can be plugged in.

    To achieve this, we believe that banks should focus on reducing the impact of several challenges, these being: scale, functionality and integration.

    When addressing scale, it is pretty clear that banks are very risk-averse when looking to replace legacy systems. Probably, rightly so, given how embedded and business-critical these systems tend to be. However, the tried and tested replacement method holds banks back. But, and it is a big but, the first bank that successfully implements a next-gen core system will be the market leader. To achieve this, banks need to move away from the heavily matrixed organisations and meeting driven cultures of the past and instead form small, cross-functional teams that use concept sprints to design, test, and scale initiatives.

    In terms of functionality, it’s pretty simple from our perspective. The right architectural answer is to pursue a strategy of loose coupling to reduce customisable issues further down the line. It means banks need to pivot to systems that will be designed to support a reduced set of products and processes, but with a versatile toolkit across software development and API capabilities. This approach will also enable banks to plug gaps and/or capabilities via their fintech ecosystem and traditional supplier network. It’s a huge opportunity to develop and extend a broad and relevant ecosystem.

    Banks also expect new systems and solutions to integrate with their existing stack of channels, data architecture, security systems and middleware. That’s without taking into consideration the significant customisation and development that has updated the business logic over the cause of several decades. That’s quite a tall order as all are very difficult to replace and represent a pretty weighty investment. Read high risk and high cost. Not a great combo. Unsurprisingly, most banks don’t have an appetite for this type of transformation. So there’s a need to gradually migrate from the current to the new over an agreed timeframe. This approach means banks can decommission their redundant systems, simply their product set and improve their tech skills, specifically across automation, digital and cloud.


    We expect the three priorities identified to continue. Customers will continue to embrace digital and hybrid channels while visits to branches will decline. What will set banks apart is their ability to optimise these their digital capabilities and customer channels whilst successfully competing with a wide variety of traditional and non-traditional competitors.

    We’re here to assist our clients not only in navigating the immediate challenges of the crisis but also in creating responsive, adaptable and intelligent technology-enabled solutions that will build resilience for the future. Please get in touch for a free, no-obligation advisory session.