Once a bank has come up with a new idea for a financial product, they bump up against the next barrier - the fact it takes far too long to turn a proposal into a finished product. Part of the problem is that traditional processes for building products are not conducive to rapid deployment, with it often taking anywhere from six months to a year or even longer to launch. In that old world, banks that wanted to build a new product would first need an appropriate budget, which means enlisting a sponsor, assembling a team of engineers and having the right technology for it to work.
Respondents also complained that they often need manual workarounds due to the limitations of their systems, so it might mean inserting Microsoft Excel into the process, for example. “We have good ideas, but execution doesn’t happen - it is too difficult to construct the product we want,” one respondent said.
One way banks could approach developing ideas is to create packages of financial products that work together to serve a specific customer need. For instance, a bank could offer a product that combines a loan, a spending account and a savings account into one, with all three parts talking to each other. Another approach is to enable products to be tailored for each individual customer, underpinned by data, rather than having a generic off-the-shelf product with different versions for different customer segments.
In this world of hyper-personalization, banks can use customer data to not only offer more relevant services, but data can also better solve individual needs. Take a mortgage, for instance. In the old world, if a customer didn’t have a deposit, their application would likely be declined. Now, banks can use their customer data and make more informed decisions based on individual circumstances and help them achieve their financial goals.
Banks need technology to help them get financial products to market faster without the need to secure budgets or assemble large teams of engineers. By using a core banking platform that enables banks to build products from basic building blocks without the need to do any coding, it is possible to start creating products and have them ready for testing in as little as a day.
Those products can also be configured to behave based on customer transaction details, so instead of having a loan product with a set number of slight variations for different target markets, banks could just create one loan product that adapts intuitively to each customer.
That means banks will have fewer products to maintain while allowing them to create more complex, intelligent products that work in harmony with their customer segmentation.
The Customer Benefit
By bringing ideas to life faster, customers get the products they need and want now rather than two years down the line when they may have already moved on. Giving customers more control over how their products interact with each other can help them manage their money more effectively. And hyper-personalization means rates, fees and features can adjust and adapt to customer behavior (for instance, by waiving account fees if a customer has paid off the full balance on their credit card over the past 12 months).
“When customer circumstances change, our products should change to reflect their new situation,” said one respondent.
This article is an extract from our whitepaper "Supercharging your product lifecycle". To read on, please download the full whitepaper via the button below.