The GAFA approach to Banking. Part III.

Part I of this article briefly presented the challenges that banking industry is facing nowadays, and how Google, Apple, Facebook and Amazon (collectively known as GAFA) are threatening to disrupt it. In Part II the focus was put on the actual GAFA framework, so called GO Digital strategy, and how it can be leveraged by the financial service incumbents. Finally, the goal of Part III is to present the digital enablers, or so called BE Digital strategy.

According to Accenture, in order to provide different products and services in the new economy, banks must have 4 KEY components:

1. Diffused digital culture. Traditional top-down hierarchies are no longer optimal. As I have written earlier, leadership should be cultivated in every department and by each individual employee. Only then strategy can be executed, employees flourish, which in effect will lead to company being the top-runner.
2. “Liquid” customer engagement and CRM. Here banks can turn to FinTechs as well as tech titans to see how to maximize customer satisfaction and engagement. The goal is to move quickly and deliver value in most unexpected ways (for instance, sending a ‘thank you’ note, or giving rewards for joining etc.). Another important thing is to leverage available data to provide customized and individual offers (i.e. Starbucks utilises this perfectly).
3. Digital IT architecture. IT architectures need to be liquid (highly decoupled and made of granular components to be created/customized in an agile way), intelligent (embedding robotics and cognitive computing to accelerate the process digitization), connected (API-driven, enabling banks to integrate easily with third parties and partners), and smart (using distributed consensus ledgers and smart contracts to enable real-time transactions without intermediaries and at much lower costs). When combined, these technologies will be a game changer, enabling banks to create new living services faster, provide new propositions, and make current products instant—all without having to change back-end systems. Figure below (source: Accenture) visually illustrates the idea.
4. End-to-end process digitization. Thus far, most banks have focused on digitizing front-end processes. It is now important to discover the potential of digitizing the invisible processes, including back-office tasks, to provide end-to-end (E2E) digitization. This, among other things, will effectively allow banks to onboard customers at a significantly greater pace, compared to what has (and to some extent still is) taken/taking them couple of weeks.

Bringing it all together

All in all, we can once again note that the banking sector is rapidly changing and effectively moving towards C2B relationships. As more and more focus is being put on the customers, banks need to be accessible 24/7/365 so they could engage with the clients wherever they are whenever they are.

Having this in mind, banking industry can learn much from successful C2B leaders like Google, Apple, Facebook and Amazon (GAFA) that have been delivering amazing customer experience always, and no matter where their customers are. Thus, banking executives must adjust their business models and agenda, and employ strategies that have worked out perfectly for GAFA.

It must be stressed that speed is of the essence here. In an accelerated C2B world, playing catch-up will not be good enough because, by then, GAFA will be advanced further, and banking will be yet another industry that it has disrupted.