Service delivery optimization in banking and capital markets has been saved
Service delivery optimization in banking and capital markets
Key requirements for cost optimization and faster service delivery in banking
As technological capabilities, customer expectations, and competition continue to shift dramatically in banking and capital markets, service delivery agility has taken on a more urgent and vital role.
Meeting new customer expectations and competitive threats
Banking institutions today need to be able to quickly deliver easy-to-use, highly tailored services to address shifting consumer preferences and differentiate themselves from competitors—all while maintaining high levels of quality and efficient operations. As financial services organizations go mainstream with modern technologies, service delivery optimization is no longer an option; it’s a requirement.
Most banks still rely on outdated systems and architectures that were not designed to support the core banking capabilities and services of the future. With pressure to reduce costs and risk, many banks are reluctant to invest in improving service delivery capabilities. But these investments are worthwhile—and arguably inevitable—enabling banks to deliver services at a faster rate and meet the ever-changing needs of the customer.
Nontraditional banks are poised to offer banking services with strong consumer appeal that could capture a large share of the Millennial market. Finally, frequent changes in regulatory guidelines and market factors are forcing banks to rethink value chains and develop more componentized operating models.
Key considerations for service delivery optimization
How do banks deliver software and products faster? Through this paper we plan to explore recommended approaches and strategies to do so by transforming an organization’s operations and adopting Agile or DevOps. We will present an outline of a step-by-step process for any bank to undergo this journey while also highlighting key factors for a successful transformation.
Before undergoing a transformation of this scale, there are several considerations and actions that need to be accounted for as part of preparing for the transformation:
- Understand why you need to transform? Consider forces in the market driving change, like “Lower barriers to entry”
- Determine what should you transform to? Consider changing the way you work to align with key principles such as being “Customer-focused and Outcome-driven”
- How do you transform? By defining focus areas to impact, like iterating and collaborating in solution and process design, development, delivery, and operation
- What is the plan to execute? By enabling teams with tools, training, and data and driving the transformation top-down through appropriate leadership engagement
Keys to successful transformation
A key facet to delivering this transformation is a need to reorganize IT for faster software/product delivery; to achieve this desired end goal, programs are structured with enablers (to drive service delivery optimization), coupled with broader transformation capabilities.
In our experience, there are four enablers and four capabilities that have been critical for success across any such transformation. The enablers are key tenets for delivery transformation, focused on: Agile, DevOps, Enterprise Architecture (EA) Transformation, and Workforce Modernization.
Secondary capabilities which support the overall transformation are: API, Cloud, Enterprise Data, and Process Automation.
Leading the large-scale transformation
Legacy systems and processes often limit capabilities of banks to support future core banking capabilities and services. This can be a huge risk: Customer expectations are continuously changing, and many nontraditional banks are entering the market to offer banking services. Service delivery optimization can help banks zero in on some of their toughest challenges by converging business and technology. It can help ensure effective and efficient delivery of technology offerings in support of changing needs, by providing a methodology for managing the complexity of large-scale technology change.
This transformation requires structured collaboration across a group of like-minded technology and operations leaders, to help the workforce continually reimagine how they operate, execute, and deliver services. The value delivered has potential to decrease time-to-market by ~(20–40) percent and increase the quality and stability of software products.
Banks have many compelling reasons to transform and optimize software and product delivery. By instituting key behaviors to help drive the transformation, banks can successfully modernize and tap into the vast range of opportunities in the future of financial services.