1. Developing Information Technology
Architecture to Meet Expanding
Consumer Expectations from a Global
Retail Bank
Author: Vivek Niwas
The purpose of this paper is to discuss the increasing
complexity in consumer expectations with retail
banking, and present an approach that uses a standard
industry model to provide solutions for meeting the
expectations of global consumer. The scope of this
paper is limited to the sales and fulfillment functions
of retail banking that directly impact the consumer
perspective.
The content is organized to as follows
State the concept of Total Quality Management
(TQM) and its common principles
Discuss the changing landscape of retail
banking
Validate TQM principles in the new landscape to
identify any architecture change requirements
Define the scope of architecture development
exercise based on an industry model, vision,
mission and goals from one of my
engagements. I use the QFD (Quality Function
Deployment) approach to derive strategic value
of Solution Enablers, which were selected based
on current technology trends to meet the
architecture requirements.
Total Quality Management or TQM is an integrative
philosophy of management for continuously improving
the quality of products and processes. It is based on
the premise that the quality of products and processes
is the responsibility of everyone involved with the
creation or consumption of the products or services
offered by an organization, requiring the involvement
of management, workforce, suppliers, and customers,
to meet or exceed customer expectations.
In the context of a service industry, TQM is based on
the following three principles.
- Satisfy Customer Expectations
o (Internal & External)
- Satisfy Suppliers Expectations
o (Internal & External)
- Continuously improve Processes
TQM has an established track record and has been
adopted by several successful customer-centric
businesses. Dramatic change in the retail banking
landscape in the last 15 years has caused
consumer expectations to increase far more quickly
than the banks’ ability to meet those expectations.
Consolidation in the banking industry has kept
management focused on integrating architectures, by
slicing or merging for cost efficiency and product-
2. enrichment to meet current expectations. The
expansion of consumer expectations in the new
landscape has often been overlooked, bringing the
three TQM principles out of balance.
As a result, big banks now have to set their
architecture missions to meet consumer’s expanded
expectations as well as promote economies of scale,
flexibility, agility and continuous cultural integration
without impacting the overall stability of the
enterprise.
To evaluate the impact of architecture complexity on
consumer’s expectations, and the results of any
approach that suggests simplification, I consider that
Customer Offer, Product and Service set retail
consumer’s perspective of the bank and are not only
the basis of any retail bank’s relationships with its
consumers, but also are its signature in the market
place. Complex architecture brings limitations to
Customer Offers, Products & Services.
With increased global reach, consumer challenged the
banks to provide consistent experience across physical
boundaries tailored for her culture, delivered via all
available local channels.
More Products and Services and their various flavors
are now available in bank’s portfolio as they merge or
acquire smaller entities. Consumers expect they can
now have better banking experience with expanded
reach and with better offers than before. In order to
fulfill these expectations, banks not only require
people, process & technology integration across all
competencies but also cultural integration in
distribution, manufacturing and processing of
products and services. Within the context of sales and
fulfillment after some brainstorming I come up with
the following architecture requirements.
- Proactively capture, understand and incorporate
consumer’s banking needs globally.
- Flexibility in core processes by design and
technology to remain competitive.
- Agility in distribution and processing while
keeping customer informed.
- Configurable Product Definitions for quicker
time to market.
Bundle products for greater value to customer
and bank.
- Modernize infrastructure globally for security &
availability.
- Flexible User Experience adaptable to
consumer's culture.
I have used IBM’s CBM (Component Business Model)
framework to identify business components which are
in the consumer’s direct perspective. Different vendors
have different frameworks, like SAP’s BOF (Business
Object Framework), and Oracle’s IRM (Industry
Reference Models), in which case the components
could be different.
Performance of components highlighted below would
directly impact consumer’s banking experience as well
as bank’s reputation in the marketplace. As a bank
increases its global reach, the design of these
3. components should be internationalized to adapt to
different cultures while maintaining process
excellence. Sufficient localization shall also be made
available in these components to adapt to the
dynamics of local markets. Increased awareness of
consumer behavior and her complete profile, when
combined with the bank’s ability to adapt to her
culture as well as to her local market, will help the
bank to communicate and service effectively. This will
help to build highly trusted relationship that would
attract the consumer to bundled products as well as
enable the bank to offer her competitive pricing and
rewards.
Configurable Product Definitions, Processes, Policies
and Rules would enable internationalization and
localization of business components. Processes within
these business components should be automated and
continuously integrated to offer services. Modern,
highly scalable, secure infrastructure would strengthen
the service oriented architecture. Recent advancements
in social media should be tapped to proactively sense
the competition and sentiments about bank’s products
and services as well as any new trends in the markets
globally to improve quality of service and adapt
proactively to consumer’s trends.
5. I will now share my analysis of business components
that were selected based on the immediate mission of
the retail bank to which I consulted. The purpose was
to modernize sales and fulfillment functions of a retail
bank to bring it closer to the consumers and prospects
globally than it is today as one integrated bank. Vision,
Mission and Goals were already set by the management
and the need was to establish solution enablers that
are essential to accomplish the mission in the
prescribed timeline. Hence strategic values of these
solution enablers were determined utilizing QFD
technique that helped prioritize initiatives based on
priority and current maturity of these solution
enablers. Following priorities were derived from the
QFD.
1. Modernization of Customer Facing Internet
applications for security, availability, usability,
look & feel and easy integration
2. Internationalization
3. Workflow Management & Localization
4. Next Best Action Determination, Customer
Interaction Monitoring, Single View of Customer
5. Social Media, Analytics, Context Based Routing
& Mobility
6. Relationship based pricing & Proactive Offers
Management
Vital Statistics were developed to measure the
current portfolio health of the above enablers.
Measurement was done for Business Alignment,
Cost Effectiveness, Technology Risk, Complexity,
Stability and Optimization Opportunities.
Surprisingly we found that within the context of the
mission statement, organization had been fairly
maturing on the #1, 2 and 3 priorities, had started
significant technology initiatives for #4 and was in
infancy for #5 and #6. Hence the recommendation
was to continue on #1, 2, 3 and 4 at the current
pace and plan, and to execute detailed architecture
development exercises for #5, & #6. From this
point my engagement went more into the
execution of architecture development exercises
for Relationship Based Pricing & Proactive Offers
Management.
In the following QFD diagram you will see Solution
Enablers (SE) Architecture Requirements (AR)
Goals (G) Mission (M) Vision (V) as columns
and Business Components (BC) as rows. Following
relationships were measured at the scale of 0-3 for
the need of LHS by RHS. SEBC, SEAR, BCG,
ARG, GM
0/blank: Not Needed, 1: Nice to Have, 2: Some
Dependency, 3: Absolute Dependency. Needs of
each solution enabler were totaled to determine its
strategic value. In further iterations Business
Components and Solution Enablers were elaborated
to identify architectures, roadmap and detailed
work packages.
In a separate paper I will introduce the analytical
model for vital statistics and also explain how
these may be used to determine the maturity of
current state of solution architectures for a
portfolio of applications as well as to drive the
solution design to the target state.
