Digital Disruption Drives Change

By Capco, PRNE
Wednesday, March 2, 2011

Capco's Nick Levy Offers Banks a Transformation Checklist for Their Digital Banking Plans

LONDON, March 3, 2011 - Financial services firms need to transform their digital platforms to
create bottom line growth through increased levels of loyalty, engagement and
sales. With increasing levels of online engagement across their customer base
banks are increasingly re-assessing their digital proposition with a view to
acquire and retain customers.

Nick Levy, Managing Principal at Capco, the financial services business
and technology consultancy, says:

"There is a ferocious pace of change within the digital domain and this
requires banks to reconsider their approach to providing access to their
products and services online. Banks must adopt more flexible and capable
platforms to ensure they are able to bring consumers innovative and engaging
services which ensure they remain relevant in the digital domain where social
networking, person to person payment services and new market entrants are
increasingly challenging the relationships banks have with their customers.

Consider this

It took 38 years for radio to attract 50 million listeners. 13 years for
television to attract 50 million viewers. In just 4 years the Internet
attracted 50 million surfers. Facebook has more than 600 million active
users, people spend over 700 billion minutes per month on Facebook, there are
more than 200 million active users currently accessing Facebook through their
mobile devices. YouTube has more than 2 billion views per day, 24 hours of
video are uploaded every minute and more video footage is uploaded to YouTube
in 60 days than the three major US networks have created in 60 years.

As the range of digital banking propositions matures and banks move to
deliver enhanced features and capabilities, executives are increasingly being
asked to reconsider their underlying business and technology capabilities to
deliver more and deliver faster.

This transformation journey for digital banking is now entering a
critical phase. The checklist below shows what financial services
institutions need to do to prepare for the changes ahead.

A transformation checklist

    - Define a target for multi-channel engagement - what services, to which
      customer segments; consider what it takes for your business to deliver
      a great customer service in the digital domain, for some customers the
      digital channel will augment an existing relationship with the bank and
      for other customers it will be the relationship

    - Deliver incremental change to transform customer behaviour - very
      simple services such as SMS alerts drive customer adoption of the
      digital channel, innovation such as advice and guidance requires higher
      levels of trust but all of this transformation can be delivered with a
      transformed digital platform designed for flexibility

    - Understand the shifting demand and create platforms which support
      innovation - moving from the cash paradigm / cash replacement the
      mobile banking (NFC) proposition must be able to deliver seamlessly to
      meet customers' user experience expectations (link in Fax machines and
      pagers - rate of adoption v rate of decline - rate of IPAD adoption -
      number of searches on line each day)

    - Leverage the insight and data flows available from real-time
      interaction - close looped marketing delivers improved customer loyalty
      by converting insight; multi-dimensional analysis allowing high levels
      of customisation can drive significant sales

    - Security is not a solution - risk based and flexible identity and
      access management ensures flexibility to support emerging technology
      and functional innovation such as real time payments (faster payment)
      and drives higher levels of customer activity on low cost channels

    - Pervasive computing is here - tablet, smart phone and mobile appliance
      adoption has reach a tipping point, access to the internet on the move
      is here; location awareness and more powerful devices are driving a
      user interface transformation and improving usability. Support a
      digital proposition for segments of customers who only ever access
      services on the move via connected devices."

About Capco

Capco, a global business and technology consultancy dedicated solely to
the financial services industry. Our professionals combine innovative
thinking with our unrivalled first-hand industry knowledge to offer our
clients consulting expertise, complex technology and package integration, and
managed services to move their organisations forward.

Through our collaborative and efficient approach, we help our clients
successfully increase revenue, manage risk and regulatory change, reduce
costs and enhance control. We specialise in banking; capital markets; wealth
and investment management; finance, risk & compliance; and technology. We
serve our clients from offices in leading financial centres across North
and Europe. To learn more, visit our web site at

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Contact: Robert Akam, T: +44(0)20-7400-4480, E: rakam at, Contact: Joe Eldridge, T: +44(0)20-7400-4480, E: jeldridge at

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