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How can banks launch products that customers actually want?

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The Problem

Even after experimenting and testing new ideas, banks still need to handle product roll-outs or updates carefully. “When we change a product, we want to perform a dry-run to test whether it works, and whether it is palatable to the customer,” said one respondent in our recent whitepaper on product lifecycle management.

Another said they wouldn’t want to move all customers to an updated product on day one because of a potential backlash – it’s not ideal to roll out a change, and then find out customers don’t like it. A better approach would be segment a group of customers and launch slowly on an incremental basis and then build up to a full launch.

Another challenge banks often face is that because they can’t predict future customer behavior, there tends to be excessive debate and bureaucracy around the potential impacts and business cases, slowing the launch process down. Product managers want to move fast and be given the freedom to innovate without any bureaucratic constraints.

At the same time, banks also want to avoid dangerous scenarios when creating new products or updating old versions, such as harming vulnerable customers or alienating loyal customers.

The Solution

Next gen core banking solutions can allow banks to perform dry-runs and launch product ideas to smaller audiences to better gauge customer reaction and ensure the bank is well-informed before pulling the trigger on a full launch.

In the future, more advanced technology could potentially enable banks to simulate product launches by predicting customer behavior based on past activity. That data can give senior managers more confidence around how products will work, reducing the bureaucracy that typically slows innovation and drastically cutting the time-to-market for new financial products.

Those simulations could predict both the impact on a bank’s financial outlook and how fair they are for customers, helping avoid any unwanted scenarios. Banks could also take a certain cohort of customers and measure their behavior over a set period of time and then project that behavior over a subsequent period with new interest rates or fees, simulating what segments would be most impacted. All of that information can then help inform not only how financial products are designed but also how they are rolled out. As one respondent noted: “Running simulations is what banks want to do - we don’t want to waste time on process, policy and procedure.”

The Customer Benefit

Dry-runs or simulations will ultimately mean banks build products that customers actually want. If banks could reduce the bureaucratic red tape that slows innovation, product teams would be able to spend more time interacting with customers and getting valuable feedback to inform product design rather than wasting time debating internally if something will work or not. If product managers are more accurately able to predict how products will behave, then they can focus less on governance and more on creating better products.

“Product managers should be spending less time concerned with ‘how will I get this through’ and more time talking to customers,” a respondent said.

This article is an extract from our whitepaper "Supercharging your product lifecycle". To read on, please download the full whitepaper via the button below.

 

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