Banking on the New Style of Business discusses how technology is transforming banking and the customer experience. It explores how digital banking requires moving from transaction-focused multichannel integration to a customer-centric strategy that incorporates online, mobile and physical banking into a unified experience. The document recommends that banks shift from automating existing transactions to focusing on the customer experience, create an architecture to support new digital touchpoints, and implement integrated digital banking solutions.

1. Banking on the New Style
of Business
Shaping the Bank of the Future
Executive Introduction
Research from Gartner:
How to Develop Digital Banking That Delivers More
Than Multichannel Integration
Customer Engagement and Experiences: The Age of
the Digital Bank
The Multichannel Evolution: Shaping the Bank of the Future
Branch Transformation: Evolving Beyond Traditional
Banking Transactions
Cards and Payments — The Next Generation: Achieving
Customer Satisfaction
Why HP?
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2. 2
Executive Introduction
Technology is no longer just an enabler of
business ideas; it is now the key seed for
innovation within the business. In March
2015, Gartner published the findings of
its Digital Business Baseline Survey which
outlined the following results:
“Digital business is here. Twenty-two percent
of organizational leaders say they are
currently doing some form of digital business,
resulting in higher investment in IT.
Digital business is growing. Fifty percent of
businesses intend to be a digital business
in 24 months, and 83% in three to five
years, which will result in high stresses on
individuals in organizations.”1
The New Style of Business is challenging
conventional notions about how businesses
should operate. With each passing day, more
and more use cases evolve on how technology
is redefining the customer experience.
The art of the possible with customer
experience is limited only by imagination.
Change must be managed to maximize
the value from existing investments and to
optimize the returns from investments. To
achieve this, organizations must identify the right
business issues to address to deliver maximum
returns, adopt the latest technologies to minimize
costs and discover new ways to fund innovation.
In this newsletter, we explore how The New Style
of Business is impacting the banks and how
technology is redefining their relationship with
their customers. It is a transformation journey that
we can help you embark on.
Bank on the New Style of Business and shape the
bank of the future.
Andrew Clarke
Vice-President
APJ Industry Solutions Practice,
HP Enterprise Services
1
Gartner Inc., Digital Business Is Here Now, G00269535, 18 March 2015
Banking on the New Style of Business is published by HP. Editorial content supplied by HP is independent of Gartner analysis. All Gartner research is used with Gartner’s
permission, and was originally published as part of Gartner’s syndicated research service available to all entitled Gartner clients. © 2015 Gartner, Inc. and/or its affiliates. All
rights reserved. The use of Gartner research in this publication does not indicate Gartner’s endorsement of HP’s products and/or strategies. Reproduction or distribution of
this publication in any form without Gartner’s prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable.
Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to change without notice.
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its website, http://www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.

3. 3
Research from Gartner:
How to Develop Digital Banking That Delivers More
Than Multichannel Integration
Introduction
Banks’ IT efforts to integrate channels have been
difficult at best. Channel integration initiatives
typically focus on improving channel solutions’
access to back-office systems, but generally
have failed to give banker staffs in IT or business
what they seek: differentiating value and better
customer experiences that improve product sales
as well as customer acquisition and retention.
In the digital banking environment, supporting
existing and new channels, and providing
integration to the back office, is not enough. With
the proliferation of Nexus of Forces technologies,
a bank IT delivery strategy that focuses only on
multichannel integration will also fail to support
digital banking. At best, multichannel integration
enables the bank to digitalize existing banking
transactions for existing traditional channels,
like online and mobile banking. Multichannel
integration alone supports banking on multiple
(although maybe not most) mobile devices,
tablets and desktops/laptops, but it will not
support the banking business and IT in the
development of new digital transactions, assets
and customer experiences. Furthermore, delivery
strategies that just focus on creating digital
transactions of existing online or mobile banking
transactions or processes do not necessarily
deliver any cost efficiencies or better customer
experiences.
Bank CIOs must understand that digital
banking is fundamentally different from
traditional channel-based banking. To support
digital banking, bank CIOs and senior IT staffs
must create a digital banking strategy and
an architecture to support it. Digital banking
requires bankers to move from a single view
of the customer experience (which relies on
delivering existing products and services across
devices, browsers and operating systems [OSs])
to an architecture that supports applications that
take into account customer location, context
and identity to deliver relevant banking services
to customer devices. Digital banking will also
support the taxonomy of functionality that
Gartner has defined.
Digital banking incorporates multichannel
integration, but focuses on creating new business
models and digital assets that are valuable to the
customer. Bank CIOs and other business leaders
must make sure they deliver a multidimensional
customer experience to all digital channels.
Key Challenges
• Multichannel integration is important to, but not
the focus of, digital banking. Bank CIOs must
resist focusing only on multichannel; otherwise,
they will not move beyond digitalizing existing
bank transactions.
• Bank technology strategies that just focus on
creating digital transactions of existing online or
mobile banking transactions or processes do not
necessarily deliver any cost efficiencies or better
customer experiences.
• These strategies will create a single view of
the customer experience, but do not enable IT
leaders to support applications and apps that
take into account customer location, context
and identity in the delivery of relevant banking
services to customer devices.
• A delivery architecture focused on channel
integration and digitalization of existing
transactions will not enable banks to support
traditional Web-based and mobile banking,
appropriate third-party social sites, wearable
devices, partner ecosystems, and other resources
to generate new customer value networks.
Recommendations
Bank CIOs; enterprise strategic planners; LOB
heads; and product development and marketing
managers:
• Shift the digital banking strategy from a focus
on the transaction to a focus on the customer
experience.
• Create an architecture foundation that enables
banks to support an environment that includes
new and emerging digital touchpoints.
• Plan to deploy digital banking by implementing
a solution that incorporates online, mobile and
physical in an integrated approach.

4. 4
Analysis
Shift the Digital Banking Strategy From
a Focus on the Transaction to a Focus on
the Customer Experience
Traditional online and mobile banking solutions
focus on the bank transactions. These consumer
transactions typically include “view account
balance,” “transaction history,” “pay bill,” “create
a payee,” “transfer funds” (typically me to me
within the financial institution), “open new
account” and “locate bank ATMs or branches.”
Many banks also offer customers the ability to
originate a person-to-person (P2P) payment from
the online banking website or mobile banking
application. Some banks have created apps
that just allow check balance or P2P payments.
Transactions for small or midsize business
(SMB) and other business customers typically
include similar transactions, as well as a variety
of domestic and cross-border payments, cash
management capabilities, trade finance, delivery
management and data sourcing.
While online and mobile banking solutions move
transactions from the teller or call center to the
online banking website or the bank’s mobile
banking application, it is unclear whether the
result is cost efficiencies or better customer
experiences. To improve both of these, bank CIOs
should:
• Create a digital delivery strategy that puts the
customer experience at the center, rather than
a newer version of transaction-centric delivery
through digital channels. A strategy that
automates, digitalizes or streamlines existing
transactions is transaction-centric. A strategy
that supports digital banking capabilities puts
the customer at the center of digital delivery.
These digital capabilities directly impact and
create a customer-centric experience (see
Table 1).
• Focus on customer requirements for
interacting with the bank. Transactions
must not take priority over the customer’s
requirements. A “funds transfer” is a bank
activity, not a customer activity. Customers do
not care whether a payment translates into a
“bill pay” or “payment transfer” for the bank.
They care about cost, speed and ease of use.
Typical online and mobile banking solutions
are transaction-centric rather than customer-
centric. They offer rigid workflows that require
the customer to start by figuring out which
transaction will accomplish his or her goal,
rather than starting with a process that is
focused on achieving the customer’s goal —
such as improving an SMB owner’s cash flow.
Capability Example of Customer Experience
Identity Use social logon to give customers
easy access to their accounts.
Access and
control
Offer customers the ability to
manage and pay monthly bills on
time based on an analysis of their
actual monthly cash flows.
Location
and context
Automatically adjust the capabilities
available to customers based on
their devices and the technology
available.
Data and
information
Enable customers to receive just-
in-time advice regarding the use of
various payment methods based on
their personal financial cash flows,
budgets and debts.
• Separate the customer experience from the
transaction. Customers will expect and want
a different experience when accessing a
mobile app, as opposed to when they access
the bank’s online website. The customer’s
experience on a device should take his or her
location and context into account in helping
him or her accomplish a task. For example, the
customer’s experience in using a smartphone
or smartwatch to get an account balance
before making a purchase should be different
from when he or she uses a laptop at home
for the same activity. A graphic display on a
smartphone enables the customer to quickly
get the information without giving away his or
her account information. Westpac Banking in
New Zealand, for example, created the Cash
Tank app for mobile phones, and recently for
the Sony SmartWatch. When a customer is
on a laptop at home, he or she may like the
option to view an account balance as well as
any upcoming bills.
Table 1. Digital Banking Capabilities
Source: Gartner (March 2014)
Create an Architecture Foundation
That Enables Banks to Support an
Environment That Includes New and
Emerging Digital Touchpoints
The digital banking delivery strategy should
include multichannel integration, which must
accommodate all kinds of banking customers
(that is, consumers, SMBs, high net worth,
private and business). A digital delivery
architecture must be ready to distribute bank
transactions, products and services to any
device via any delivery mechanism to any
customer, whether consumer, business, or
associated third party, third-party app or third-
party site. This architecture is shown in Figure 1.

5. 5
Bank CIOs should:
• Provide the technical infrastructure for
sophisticated integration capabilities. The
digital delivery architecture supports not
only channel integration, but also data and
analytics, whether from the bank’s sources
and analytics or from third-party sources
and analytics. In addition, the architecture
supports channel integration to not only
bank-owned channels, but also third-party-
owned channels or networks. Also, the
architecture must support bank-owned apps
as well as APIs to enable third-party apps
and open banking.
• Manage customer experience from device
to device (whether customer-owned or
bank-owned) separately from transaction
processes and integration. This management
means the architecture must be able to
identify the device and type of technology
(for example, browser, native app and so on)
that the customer is using. The bank must
also deliver consistent data and services that
are appropriate to the device.
• Separate the presentation or rendering of
functionality and services from the services
themselves. The architecture should support
transactions, alerting, security and other
Source: Gartner (March 2014)
FIGURE 1 Digital Delivery Architecture
capabilities for any channel or device. These
capabilities should not be tied to a specific
channel or device. This will free the bank to
create new apps and support new devices
more rapidly. For example, if the consumer
line of business wants to enable customers
to open new accounts on their smartphones,
the IT group can reuse the account opening
functionality. That functionality is not linked
to the presentation on the smartphone
devices.
• Monitor the emergence and use of devices
and OSs. Consumer preferences are constantly
changing, and they — not banks or their IT
organizations — will determine which devices
and OSs must be supported. Information
about consumer preferences will, in turn,
support CIOs’ business cases for supporting
functionality for new devices and Oss.
• Leverage the digital delivery architecture to
assemble assets using digital technology and
deliver them to customers with value that
is not otherwise available. As a result, this
architecture will enable the bank’s ability to
marry partner data, products and services to
create digital assets. This architecture should
be the foundation for a partner ecosystem and
other resources to generate new customer
value networks.

6. 6
Plan to Deploy Digital Banking by
Implementing a Solution That Incorporates
Online, Mobile and Physical in an
Integrated Approach
Bank CIOs should build or buy digital banking
solutions that support delivery to all types of
devices and across all digital channels. Traditional
online and mobile banking solutions have focused
on creating self-service versions of existing bank
transactions. Many mobile banking solutions copy
the functionality and customer experience from
online banking. While online and mobile banking
frees customers from needing to visit branches,
the popularity of these and other services (such
as balance checking and mobile-based alerts)
also limits customers’ interactions with bank
representatives.
In addition, the bank’s cost of supporting these
digital services erodes gains by pushing transactions
to digital channels. Many banks’ IT staffs have seen
increased costs of maintaining separate and aging
mobile and online banking solutions, without a clear
connection to revenue generation. Thus, bank IT
and other line-of-business leaders must determine
how to build relationships with customers who use a
variety of digital services.
Bank CIOs should create delivery technology
replacement strategies that reflect the focus on
customer-centric delivery rather than transaction-
centric delivery. These replacement strategies
should focus on enabling customers to accomplish
their goals and tasks, rather than locating the
transaction required. These strategies also should
accommodate digital banking capabilities. Bank
CIOs should:
• Use centralized customer communication and
preference management to create a personalized
delivery matrix that works with alerting and
transactions to support customer requirements
for information and communication. Doing so
will enable the bank to provide messages and
information that are consistent with the methods
the customer wants to use to interact with the
bank.
• Identify solutions that:
• Have a single delivery platform to support
integration, devices, user interfaces,
customers and technology environments.
Separate customer experience from the bank
transactions, and separate functionality
from the specific device. Doing so is crucial
to designing customer experience and
functionality that are appropriate and relevant
to the device, and to the contexts in which the
customer uses that device.
• Build in social capabilities, personal
financial management (PFM) tools and
gamification functionality that can be
deployed to a variety of OSs, browsers,
devices and device types. Do not segregate
these capabilities as mobile banking or
online banking.
• Deliver customer data, transactions and
services in ways that are appropriate and
relevant to the specific device. However,
recognize that understanding the nuances
of customer experiences and requirements
on various digital devices does not mean
delivering or supporting all functionality at
every digital destination.
• Support distinct presentation, transaction
and integration layers that can and do
function autonomously. This enables IT to
develop and support capabilities that are
flexible and agile enough to follow the
customer’s location and context, rather
than force the customer to a specific
device or channel.
• Adopt context-sensitivity to the delivery
of channel-agnostic functionality, such
as alerts and PFM. The separation of
functionality from presentation will guide
the bank to appropriate and relevant
locations and devices.
• Consider solutions that can replace stand-
alone online and mobile banking solutions
with a single digital banking solution for basic
transactions, and also offer integrated digital
banking capabilities.
Technology providers that support many of
these capabilities include Backbase, Comarch,
Crealogix Group, D3 Banking, FidorTecS, Finantix,
Intelligent Environments, Misys, Q2, Vipera and
Yodlee.
Deploying a digital banking solution does not
mean the bank should not also develop apps
to meet specific customer requirements for
smartphones or tablets. The digital banking
solution must also be part of the bank’s mobile
financial services strategy.
Gartner RAS Research Note G00263075, Stessa Cohen, 31 March 2014

7. 7
Customer Engagement and Experiences:
The Age of the Digital Bank
When was the last time you had to wait in line at
the bank to withdraw money or deposit a cheque?
That might have been a typical scene some
20 years ago, but today’s customers want the
ability to perform banking transactions on their
smartphones and other mobile devices. They
are not going to wait in line just to deposit or
withdraw money, and they want these services to
be integrated into their buying cycle. They also
want the information and intelligence to help
them make the right purchase.
Banks that are unable to transform their business
and meet these changing customer requirements
risk losing their market relevance and client base.
They need to start looking at how they should
integrate their traditional and digital operations,
and change the way they deliver services.
It is not simply about creating a new digital
channel, but building a platform that can work
seamlessly across different channels including
ATMs, phone banking, and online banking.
In short, it is no longer business as usual. It
is now the age of the digital bank, and a new
era where banks need to get involved in their
customers’ buying cycle and help them fulfill the
entire lifespan of their transactions. While doing
so, banks still need to ensure their cost remains
below 30% for every dollar they make.
Clearly, financial market players face a
challenging road ahead.
According to McKinsey’s May 2014 report
“Strategy Principles for Competing in the
Digital Age”, digitization is rewriting the rules of
competition, with incumbent companies most
at risk of being left behind. Citing a banking
CEO, it noted that the industry was witnessing a
transition that occurred once every 100 years and
market leaders would face pressure tests of their
growth strategy.
Consumers in the digital age expect a different
way of banking, but many banks today are not
ready for the digital evolution. This has led to
gaps in the market and provided opportunities
for non-traditional players to fulfill these needs
with innovative financial services, threatening
the space that incumbents have long dominated.
eBay, Apple, and PayPal are just a handful of
non-traditional financial services providers,
with strong expertise in technology, that have
emerged to offer new ways of delivering services
that typically would have been part of a bank’s
portfolio, such as payment, vouchers, and
insurance.
New market entrants threatening
traditional players
In his November 2014 report “Five Future Forces
Impacting Banks”, Joseph H. Cady observed that
technology had enabled non-traditional market
players to step into the banking arena and these
new entrants would continue to build out their
footprint and gain market share.
A managing partner at CS Consulting Group,
Cady further cited a study where 71% of bank
executives perceived these market entrants as
a threat, pointing to players such as Walmart,
Amazon, and Google. He said these companies
were likely to remain niche players due to
the lower profit margins and high investment
associated with banking services, but noted
that they could still prove disruptive to
traditional banks and eat into their lucrative
niche service segments.
“If that occurs in a meaningful way, financial
institutions risk becoming irrelevant among
consumers and then serve largely as a quasi-
utilities offering monetary safekeeping,” he
cautioned. To remain competitive, banks must
differentiate their lines of business and provide
distinguishable services, he said, and compared
these to those offered by the finest hotels and
restaurants.
McKinsey’s report noted similar observations:
“Japanese web retailer, Rakuten, is using
its network to offer financial services. Web
powerhouses like Google and Twitter eagerly
test industry boundaries through products such
as Google Wallet and Twitter’s retail offerings.
“New competitors can often be smaller
companies that will never reach scale but
still do a lot of damage to incumbents,” it
said. McKinsey added that some traditional
players were turning to partnerships with new

8. 8
market entrants as part of efforts to remain
competitive. The consulting firm pointed to
Santander’s alliance with startup Funding
Circle as an example, noting that the U.K.
bank recognized that a segment of its
customers sought access to peer-to-peer
lending and realized it would be too costly to
build this service from ground zero.
Banks also should create new store-fronts
in the digital domain and significantly
change the way they do business. They need
to keep consumers in the center of any
service development efforts, and this means
becoming more agile so they move quickly to
meet their customer’s changing demands.
By gleaning more insights about what matters
most to their customers and the platforms
on which they want services delivered, they
can build products that involve them in the
customer’s purchasing cycle and lead to
better consumer outcomes.
Today, when consumers browse online stores
such as eBay or Amazon, they search and
identify the product they want, purchase it
on the website, and expect it to be delivered
to their doorstep. Banks need to be more
involved in this digital domain.
Ideally, they should have a virtual assistant
that can dispense advice and help consumers
obtain the best deal available in the market.
For instance, they can help a customer
looking to buy a car secure a good deal by
providing a list of models from their business
partners in this market segment, such as car
manufacturers or dealers. Banks can offer
recommendations that are within the buyer’s
targeted price range and link them to the
seller when a choice is made. They can then
provide information about the most suitable
car loan and recommend an insurance plan.
This is just one example of how financial
institutions can be involved in the customer’s
purchasing lifecycle and become an integral
part of the consumer’s decision-making
process. For this to happen, though, banks
need to realize that trust is a critical
component in terms of user experience
and working with the bank. This is where
traditional banks can differentiate themselves
from new market entrants.
An Australian bank, for instance, whose portfolio
includes mortgage services developed a property
app to help consumers search for available property
across the country, according to their specifications.
Once they have found the property they are
interested in, they can make an offer for the house
and view the bank’s mortgage services.
The bank will then assess the customer’s financial
background, conduct the appropriate checks, and
pull up the relevant legal documents they need to
apply for a loan to purchase the property as well as
a home insurance plan.
So the app makes property search quick, hassle-
free, and easy. It is highly innovative and impactful,
providing much convenience for the bank’s
customers. On its part, the financial institution
had created an app with the goal of differentiating
themselves in the digital space and in so doing,
built a new style of brand loyalty and stickiness.
The bank is able to position itself as one that can
not only provide financial services, but that can
also help customers along with their purchasing
journey and assist them in securing the best deal.
Ensuring market sustainability through
customer experience
This need to reinvent themselves will be vital
for banks, as their industry is expected to see
disruptive changes ahead.
According to Ernst & Young, the financial and
sovereign debt crises had forced the global banking
industry to snap out of a relatively calm, prosperous
period and face an era of great uncertainty. As a
result, major market forces will shape the banking
realm over the next few years through to 2030 and
beyond.
Among these is the transformation of customer
relationships, noted the consulting firm, where
consumers increasingly want more control of their
financial associations. “By 2030, banks will deepen
their personal connections with customers via data
analysis techniques that might seem fantastic by
today’s standards,” it said.
To do that, financial institutions can work with
technology vendors such as HP to identify what
they need to drive their business and establish
a roadmap. This blueprint will prioritize digital
services they need to provide and determine the
underlying technology that is needed to support
them.

9. 9
Banks need to start looking at disruptive
technology, such as cloud, mobility, and big data
analytics, and figure out how these would work
within the organization. As previously highlighted,
customer insights will provide important guidance
on what consumers want and the kinds of services
they expect their banks to provide.
And customer experience in future may not require
physical outlets.
In his report, Cady said consumers will find
decreasing need to visit branches, noting that
branch visits for many banks were already dipping
by double-digit figures. “Younger generations will
have less need for traditional institutions, opting
instead for person-to-person lenders and niche
players,” he explained.
In future, banks also may no longer be able to
sustain costly branch networks and subsidize
money-losing customers, he added. To cope with
these changes, financial institutions will need
to move this customer segment to lower cost,
technology-based service delivery channels. “The
key to a successful transition will be to educate
and incentivize your customers, making the
benefits of doing so readily apparent,” he said.
Challenges in the digital banking era
The route toward the digital, however, will not
be without its challenges. Bank employees, for
one, will need to change the way they work and
embrace innovation.
Transforming their core backend systems will also
prove challenging because most banks operate
mainframes, which are expensive and built on
decades-old technology. These systems are heavy
and monolithic, and designed to work in silos to
support specific services such as credit card and
mortgage processing. This makes it difficult to
enable integrated service delivery.
Rather than overhaul their system overnight, which
would be a costly exercise, banks should look to
evolve their IT infrastructure to an “as-a-service”
model and consume IT services without the need
for heavy backend systems.
They should also look to technology as an enabler
of their transformation in the digital age, helping
them to become more agile through automation
and better understand their customers through
analytics.
To sum up, competing in the digital age requires a
whole new way of doing business and banks will
need to break out of their silo-ed environment and
tap technology to bring their services together
to provide a more cohesive experience for their
customers.
It is no longer business as usual. We are now fully
immersed in the digital era and banks must catch
up in order to remain relevant in the market.
Sudesh Shah is a Chief Technologist for HP Enterprise Services, Asia.
Sudesh has over 20 years’ experience in helping enterprises be successful by
developing innovative new approaches to solving business problem leveraging
technology as an enabling agent for reducing costs, improving customer
experiences and growing revenues. Sudesh has spent his career primarily
helping organizations in the Banking and Telecommunications sectors. Prior to
taking up this role Sudesh worked with the Commonwealth Bank of Australia
helping define their Digital Workplace Strategy transformation and defining
the development of their On Demand Platform for providing cloud services.
Chien-Wei Ching (Ken) is an Industry Principal for Financial Services Industry
for HP Enterprise Services. He has more than 14 years of experience in financial
services industry and provides strategic consulting for financial institutions. He
provides thought leadership to ensure the business strategies and technology
of clients are effectively implemented to achieve business outcome, with pace,
certainty and strategic agility.
Source: HP

10. 10
Source: HP
FIGURE 1 Recent technological disruptions
Internet
Email
Mobile
Phones
Smart
Devices
Social
Collaboration
Online Banks
and Services
Cloud
Services
(Banking,
Travel, Music,
Retail, etc)
Internet of
Things
90’s 00’s 10’s ‘15
Technology disrupts. That is a given, but the
disruptions that are occurring because of
the technologies enabling the New Style of
Business is far more revolutionary than any
other new technologies. It is a confluence of
various technologies that will redefine the way
organizations relate to their stakeholders.
The banking industry have benefited immensely
from emerging technologies in the past, ranging
from advancements in core-banking solutions,
to automated teller machines, electronic
transactions, and online banking. However,
banking today is different than it was 20 years
ago and yet, many of the systems in place have
not evolved alongside these changes. There are
many fragmented silo-ed systems and an overall
architecture that is labor-intensive and expensive
to maintain.
Over the past two decades, there has been
a plethora of technologies that changed
consumers’ lives:
be designed to take into account, and enhance,
the consumers’ lifestyle. It is no longer about
just providing a product, but supporting an entire
relevant purchasing lifecycle.
Banks should have the insights to provide the
best possible service, such as loans, when the
consumer requires it. The questions banks need
to ask themselves are:
• How do we know that the consumer is looking
for a loan?
• What is the best possible loan?
• What other services are required, such as
insurance, transfer fees, taxes, search fees,
and so on?
• How do we get involved in the entire lifecycle
of the purchase decision for a home or a new
investment property?
The Multichannel Evolution: Shaping the
Bank of the Future
Adapting to The New Style of Business
These new technologies have changed the way
people live and their daily routines, putting
intelligence in the consumers’ hands with
information at their fingertips—24 hours a day,
365 days a year—so they can make intelligent,
informed decisions. Traditional services that
consumers expect from shopping, window
browsing, going to the bank, paying with cash,
and so on, are rapidly changing. Services need to
• How do we provide the right service to the
consumer through the entire purchase lifecycle?
• How do we maintain this service throughout the
life of the mortgage or the loan?
• How do we ensure our relevance in the life of
the consumer?
The digital channel appears to be the answer.

11. 11
Transformation through the digital channel
Clients are dictating what services need to be
created as well as where and when these will
be consumed. Channels need to adapt to meet
these requirements and banks need to look at
a redesign.
Imagine the following scenario:
It is a Saturday morning and the consumer,
using their smartphone, searches for
the property they want on the bank’s
property portal. They use the bank’s wealth
management portal to calculate what they
can afford. The portal also provides insights
into the properties they are looking at.
They identify properties that match their
needs and arrange for viewings using the
same portal. The Navigation feature creates
an itinerary for the viewings and contacts
are downloaded to their car’s navigation
system.
After viewing the properties, they make
their choice and decide on a property.
Again, using the same portal, the property
buyer informs the bank, which then
arranges for the necessary background
checks and legal documents. The
complexity for the consumer has been
significantly reduced.
The purchase was made simple and
efficient. Some rules, regulations, and
compliance obviously need to be reworked
to make this scenario a possibility,
however, the technology already exists
today. It requires a cultural shift in the way
banks do business today.
HP has found helping their clients build a
solution like this blurs the boundaries of what
a bank can do in a positive way. The bank
becomes a convenient service provider, and
not simply a checking account manager. If
a bank continues to think of ways to make
using their money more convenient, easy, and
seamless, customers will think of banks as
more than a place to store their money and
one that plays a more central role in the lives.
Technological advancements in unrelated areas
are creating an impact on the banking industries
as well. Consider the following:
• Internet of Things (IoT). This evolving
technology is increasingly pervasive and
finding its ways into concepts such as
smart cars and smart homes. Smart cars, for
instance, that can book itself for a service and
accept payment for the service (with the bank
and customer’s approval), as well as ensure
best insurance package has been secure and
fuel paid.
• Point-of-Sales (POS) and payment systems.
Traditionally, this is the confluence of the
customers, retailers, and banks, but with
Apple Pay and Android Pay, new entrants
are entering the purchasing Ecosystem and
changing the dynamics of the transaction.
• Potential new market payers. Google
already has a banking license1
and market
watchers are speculating that Apple also will
eventually provide banking services2
.
These new entrants can be formidable
competitors to traditional banks as they are at
the bleeding edge of technologies that underpin
disruptive changes. These market players are
already years ahead before products and services
hit the market, forcing traditional banks into
catchup mode, and are highly adapt to fast
changes.
In comparison, traditional banks have proprietary,
disparate solutions running on outdated
business models, and rely on products that force
customers to conform to the way banks offer their
products and services.
The new entrants also do not have legacy
systems or processes to worry about. They are
in the perfect position to recreate the customer
experience by deploying the latest technological
advancements to enable change. HP has
solutions for traditional bank models to allow
them to compete with the new entrants by
updating their business process and operating
model all while keeping existing systems such as
their loan origination system.
1
http://www.huffingtonpost.com/brett-king/would-google-make-a-bette_b_443317.html
2
http://www.marketwatch.com/story/an-apple-ibank-is-only-a-matter-of-time-2014-09-12

12. 12
As a sign of the things to come, Google
announced at the World Mobile Congress 2015
that its Android Pay will provide a ubiquitous
platform for developers to create specific
payment applications for merchants and other
businesses. This will incorporate payments for
the Internet of Things (IoT) touch points that
include smartphones, smart TVs, smart fridges,
smart homes, smart cars, and any intelligent
devices that can be connected to the internet.
Future-proofing banks with multi-channel
strategy
The key point here is that traditional channels are
slowly but surely becoming a thing of the past.
The players in the purchasing lifecycle is fast
changing in the digital era. Banks need to adapt
to the customer-centric purchasing ecosystem
or risk being overtaken and start thinking of
multichannel strategies they need to support
their future growth.
This requires significant transformation of their
legacy infrastructure to a technology ecosystem
that is more agile and responsive to the changing
needs of the banking industry. This also means
they should avoid solutions that are standalone
proprietary, and designed for specific business
processes. Many HP clients have moved to As
A Service solutions to allow them to be more
agile and responsive to change in this fast past
technology world.
Banks need an enterprise architectural framework
that supports the approach of putting the
customer and their life demands at the center
of operations, planning, and services. They must
have a roadmap that allows them to plan for the
future--one that comprises the digital channel.
The digital channel is now impacting and
influencing every channel of the bank. Some banks
view digital channels and systems as the core of the
Bank of the Future, while others are simply bolting
on tactical upgrades to their existing systems in an
effort to provide the service demands of the web-
connected consumer.
Remember that banks now need to compete with
other non-traditional market entrants such as
Google and Apple. The cost models of these ‘non-
banks’ are a lot lower and they posses strengths
that traditional banks do not, such as:
a. They are agile
b. They don’t have large monolithic siloes of IT
systems and business processes.
c. Their processes are leaner.
d. They identify and enter niche market segments
where gaps exist in current banking portfolio.
e. They operate in a startup culture, where there
are more inclined to take risk and try new things.
They are innovative and adopt a try-and-fail-fast
model.
f. They have leaner cost models
g. They are more inclined to provide digital services
to market faster than banks.
Most banks have been on a digital journey for
years now, but how many actually have adopted or
looked at changing their architectural framework
to move toward a customer-centric, rather than
product-centric, model? In HP’s experience with
their clients, those that have moved to a customer
centric approach have realized greater customer
engagement and increased revenue.
Source: HP
FIGURE 2 From Product-Centric to Customer-Centric
product-centric to customer-centric
Transactions
Products
Queues
Service
Solutions
Convenience

13. 13
The new growth market
The non-banked customer segment is out
of reach to banks with legacy systems and
infrastructures. These are consumers that
do not have access to banking services and
facilities, and it is estimated that only 30% of
the world economy is banked. This indicates
a massive opportunity in the non-banked
segment where customers are more willing
to adopt new technologies.3
The digital
channel is ideal in addressing this market.
It is imperative that banks adapt and adopt
the New Style of Business or risk being made
irrelevant. The customer engagement model
has to be re-engineered from ground-up,
taking advantage of the cachet it has built
with their traditional business and embracing
the disruptions to its advantage. The Bank
of the Future will have to be mindful of the
following:
1. The consumer is at the center of the
digital world.
2. The digital consumer will shape the new
way of banking.
3. All other channels and systems will need
to be tightly integrated to the new way of
banking. These will include:
a. Branch banking;
b. Banking business process;
c. Operational culture within the bank to move
from product-focus to customers-centric; and
d. Architectural framework, technologies, and
strategy to service the new way of banking,
4. Banks need a lower operating model per
transaction. The core of many existing banks are
mainframes and these must transition to enable
a lower cost per transaction.
Building the Bank of the Future
Let’s have a closer look at the architectural
framework and technologies that banks have to
adopt. First, they need to reach their target market
through smart devices, so they need to support
mobility. Banks will need to maintain customer
contact through other channels such as call
centers, e-mail, branch, ATM, and so on.
To support this, they need a common platform
or what HP calls, Digital Presentation Platform,
to ensure consumers have a uniformed and
integrated interaction with the bank. Banks must
ensure continuity across their channels and
services, and look at multichannel transformation,
ubiquitous channels, and omni-channel to establish
consistency across the different channels.
Source: HP
FIGURE 3 The New Always Connected World
Processes : The customers world is changing
Information, Choice, Always connected – Our Service and Business Processes need to adapt
Trust, Service Excellence, Happy Consumer
3
C.K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Pearson Education, 2005

14. 14
Another key requirement for banks is to be
proactive and offer services that support the
consumers’ lifestyle, buying patterns, and so
on. They need customer insights and should
deploy big data and analytics platforms to
analyze structured and unstructured data
sources rapidly.
To support a multichannel environment,
banks need:
1. Mobility Platform
2. Digital Presentation Platform
3. Big Data and Analytics Platform
a. Campaign Platform
4. Enterprise Data Warehouse Platforms
5. Customer Relationship Management
Platform
These five systems represent the key
systems banks need to develop a growth
strategy. More importantly, all these systems
need to be strategically positioned in the
bank’s Digital Architectural Framework.
These services cannot operate in silos and
should be consumed horizontally.
A five-layer architectural framework is required to
support a bank’s New Style of Business, as shown
in the figure 4: Many clients find great value in
working with HP on their multichannel roadmap
because HP provides end to end services and
lessens the burden for the client to manage
multiple vendors and interfaces into multiple
vendor solutions.
The lower the level, the more consumable the
service. This way, banks need not worry about
designing, operating, and maintaining utility-
based services. For example, Infrastructure such
as network, memory storage, and compute should
be consumed as utility-based services dependent
on the workloads being serviced.
Compliance and regulatory requirements
are mandatory considerations. Automation,
orchestration, and end-user product services
management also come to the forefront. Thus,
banks will be the authority for specifying
service specifications, while the delivery of the
utility-based service and maintenance of the
infrastructure and applications will be that of the
service provider.
Source: HP
FIGURE 4 The Five Layer Architecture Framework
Channels
Business process as a Service
Software as a Service
Platform as a Service
Infrastructure as a Service

15. 15
Platforms such as EDW, analytics and big data, and
mobility must be strategically designed to service
all channels within the bank. Another key change
in the existing banking framework is the move
away from vertical siloes to horizontal services
that service the cross business units of the bank
consistently. A typical framework for the future of
banking architecture is shown in the figure 5.
Note how channels strategies are now serviced by
horizontal services and not vertical siloes of the
traditional banking framework. The DevOps chain
refers to the new model of business operations,
where IT application development and IT service
management are coming together and being
collaborative with services and a go-to-market
strategy. This enables higher degree of more
Source: HP
FIGURE 5 Typical Framework for the Future of Banking Architecture
Digitised Services - HELIX Framework
Intelligent Business Framework - CHANNEL Presentation LAYER
Customers Employees B2B (Hybrid Cloud)
Business Group
5
Business Group
4
Web Services - Workflow Services
REYALNOITARGETNILENNAHC-secivreSssenisuBscitylanAdeddebmE BPaaS
Business Group
1
DBaaS
CoTs Cloud Services
IaaS
SDN DC
iCaaS
MS Windows Server
tfihSnepOAzure
SQLaaS
iPaaS
APaaSApplication Platform Services – Platform Automation(Cloud Foundry based)
Oracle DB 2
Red Hat Enterprise Linux AIX
Vertica in memory DB
Software Defined Logical Network (DC, LAN, WAN)
Compute Storage
Mambu.Com Cloud
BlueMix
Amazon S5GoogleHP Services S3plus AuroraMicrosoft AZURE S6 Master CardVisa
HP Cloud OS (Openstack infrastructure services)
Automation Policy and Rules, Orchestration across services
SAP Hana
tropsnarTNAL
tropsnarTNAW
VeriPark
tnemganaMIPAduolCSCPH Legacy API Management BOLT
Pivotal CF Apps Dev Framework
SoftwareDefinedDataCentre
Memory Public Cloud 1 MPC 1 MPC 2
BraintreelaPyaP
MPC 3 IaaS
NoSQL
DevOps Chain
DevOps Business
services definition
Business Process
specification
DevOps Consumer
Demand signals
OS
Business Group 2
Business Group
3
SaaS
Foundation SaaS
Components
App3 App6 App6 App7
Sales force dot com Autonomy intelligent Analytics
App5App 2App 1
SaaS modules
Receive FundstnemeganaMytitnedI tnemeltteSlortnoC tnemeganaMtnuoccAtnemeganaMyraicifeneB Identity Authoristion
Buy/Sell CurrencyExchange Rates Make Payments
Buy/Sell CurrencytnemeganaMksiR Make Payments
Geo LocationTravel Money tnemyaPsnaoL Home Loan OriginationMicro Loan Origination Cash Balance Enquiry
Up Sell PromotionCredit Check 1ngiapmaCtekraM 1ssecorPdnuobtuOMarket Campaign 2 Fraud Check Home Loan OriginationtrelAduarF Digital Signature
App4
Hadoop.cte,emorhC,elgooG,swodniWSaaDtnioperahS.NetsecivreSbeW UCCaaS
DataCash. com Mambu.Com SAP
563SM
Branch aaS VeriPark
Digital Framework aaS Polaris
Workflow aaS OOPH idrabmoLSaaPBDigitisation (Trim aaS)
MDM Airwatch Exchange
Cloud Data Centre
Services (Global and
Local)
DevOps Business
Application services.
IT Specification map
to business
Production, test,
development.
DevOps Lifecycle
Services
Application
Management
Release, Test,
Production
DevOps foundation
Standard application
platform services
SDN Overlay WAN, LAN
PaaS Automation
BRANCH ONLINE TABLET MOBILE SMS SELF SERVICE
KIOSK/ATM
CONTACT
CENTRE
SOCIAL
innovative customer services and products.
The supporting IT and applications services
and processes will be more agile to cater to
business demands because of the higher degree
of automation and orchestration.
The diagram (figure 5) shows what the
next level of the new banking architectural
framework typically looks like. It is important
that banks today reassess their framework
and design a transformation blueprint to help
drive the organization from the legacy mode of
operation to the Bank of the Future, and protect
their market from new entrants and ensure their
customers continue to enjoy the services they
are demanding from banks.

16. 16
Recommendations on how to get started
As more channels are developed, more will be
used. Customers want it when they want it,
and how they want it. This is, in part, because
they generally get the services they want from
other industries and companies, new and old.
They do not want to resubmit data, resend
documents the organization asked for in the
past, and key in information more than once.
Customers do not want to be inconvenienced
because they do not have the time for it. They
want to be able to research, open, change,
check, and request, on any channel, whenever
they want, so banks need to:
• Provide a relevant purchasing ecosystem
for ever-changing customer behaviors and
technology advances;
• Focus on identifying the strategy and engaging
trusted partners to build it with them;
• Update their business processes, operational
models, their culture, and their technology to
compete in the digital world;
• Put customers at the center of the digital
world; and
• Provide customer touch-points that are tightly
integrated and seamless, and that deliver what
customers want, when they want.
The successful bank of the future will be the
bank that is best able to embrace the changes
and adapt to meet the challenges and take
advantage of the growth that disruptive
technologies have to offer.
Sudesh Shah is a Chief Technologist for HP Enterprise Services, Asia. Sudesh
has over 20 years’ experience in helping enterprises be successful by developing
innovative new approaches to solving business problem leveraging technology
as an enabling agent for reducing costs, improving customer experiences and
growing revenues. Sudesh has spent his career primarily helping organizations in
the Banking and Telecommunications sectors. Prior to taking up this role Sudesh
worked with the Commonwealth Bank of Australia helping define their Digital
Workplace Strategy transformation and defining the development of their On
Demand Platform for providing cloud services.
Source: HP
Chien-Wei Ching (Ken) is an Industry Principal for Financial Services Industry
for HP Enterprise Services. He has more than 14 years of experience in financial
services industry and provides strategic consulting for financial institutions. He
provides thought leadership to ensure the business strategies and technology
of clients are effectively implemented to achieve business outcome, with pace,
certainty and strategic agility.
Lori Murray has been with Hewlett Packard since 2010. She was in banking
for 20+ years prior to moving to HP. She is currently the Global Offering Director
of Banking for Business Process as a Service (BPaaS). She is responsible for
meeting with bank executives to understand their current strategies and
initiatives and identify HP BPaaS solutions that will assist in achieving them.

17. 17
Branch Transformation: Evolving Beyond Traditional
Banking Transactions
Banking has always been a competitive industry
and it faces increasing challenges in the digital
era. New market entrants and the increasing
pace of technology innovation have left many
banks with outdated applications and business
practices.
In many cases, banking systems had been built
from the ground up, with various applications,
operating systems, and device infrastructures
bolted on as customer demands and behaviors
changed over time. The result? Systems are often
fragmented, inconsistent, or redundant. The
challenge is intensified with the race to move to
a digital business in order to drive a better client
experience, and banks need to figure out ways to
correct their operating environments. They need
to enhance customer experience, grow revenue,
and reduce expense, and at the same time, deal
with an antiquated operating environment and
new entrants eyeing a share of the market.
The branch network is, in many aspects, the most
severely affected by these changes. With the
increased usage of online and mobile banking,
branch transactions are decreasing. This network
accounts for a large part of the bank’s expense,
so it is no surprise that all banks are trying to
solve the ‘Branch Transformation’ or ‘Branch of
the Future’ puzzle.
Up until a few years ago, banks continued
to build branches because the metrics and
statistics told them to. Optimizing a network
meant building out branches in highly populated
geographies in markets where they had
substantial market share. Of course banks were
closing suboptimal branches, but the net new
number was usually positive. That all changed
with the enhancements of mobile, online,
and ATMs, and the evolving expectations of
customers who want what they want, when
they want it, and how they want it. Banks,
unfortunately, have not met the challenge.
As transactions decline, what should banks do
with their expensive brick-and-mortar operations?
Do customers still open their accounts based
on the bank they see and know, or does that no
longer matter? It still does, but the importance
will continue to decline and so should the branch
network size. Will it completely go away? Not
in the near future and public data indicates
this trend. For example, China’s largest bank
ICBC in 2010 recorded a total traditional branch
transaction volume to total transaction ratio of
40.1%. In 2013, this number declined to 19.8%,
and other Chinese major banks also showed the
same trajectory.
So banks need to figure out how to optimize
the size of the network--something banks
have been undertaking for years--as well as
optimize branch functions and drive down the
cost while enhancing customer service and
increasing revenue.
Banks need to pay attention to their current
customer segments and target markets, and
identify the best ways to bank with them.
Knowing this will create the nuances the
bank needs in their individualized branch
transformation strategy and allow them to be
more effective and efficient in executing this
strategy.
Mapping the future of branch networks
The ‘Branch of the Future’ strategy comprises
less use of tellers or transaction-based employees,
and increased use of sellers and/or advisors who
are trained not just as checking accounts sellers,
but also as sellers of complicated products and
services that customers are not comfortable
transacting online or on their own.
The strategy may seem simple, where banks
simply move tellers to assume the role of sellers
and complete transactions when needed. Many
banks tried this several years ago and called the
new role, Universal Banker, but it did not work.
Why? Because it is difficult to ensure one person
can carry so much knowledge about the bank’s
products and technology.
Today, sellers and tellers have to toggle between
many applications to carry out everyday functions.
That has to be rectified to successfully move
away from teller- or transaction-based operating
models. Key to success is creating a seamless
and intuitive user interface that allows the
teller, seller, or universal banker to complete the
sale or transaction in the same guided session.
HP’s Unified Front-End solution has enabled
this for all branch employees to allow them to
efficiently serve customers and eliminates the
need to constantly switch between applications to
complete a transaction.

18. 18
Moving to a more sales-based branch operating
model creates the need not just for more
effective training programs, but also more
effective technology and a more intuitive user
interface that is seamless and easy.
The Branch of the Future also includes an
updated version of ‘Know Your Customer’.
No longer is it just a regulation or a form to
complete but an atmosphere built with new
technology and operating models within the
branch. Customers expect their bank to know
what they want and even suggest what they
might want that they might not have been
aware of. Banks have not utilized technology in
this space because many feel it may be invasive
or unwelcomed. Because other industries such
as retail have utilized technology this way and
made shopping, working, or researching with
them so easy and intuitive, customer pretty
much demand it now.
At the core of any branch transformation is a
360-degree view of the customer, every product
and service they have with the bank, how
they interact with it, when they last interacted
with it, and their service requests. In addition,
capturing personal information such as marital
status, number of children, ages, and so on,
will enhance the bank’s knowledge about its
customers and make the interactions better.
Branch employees also can further improve
customer experience when they know what
product offers have been sent and products
specific customers would value.
What HP has found in offering this solution to
banks is, this 360-view needs to be accessible
on an easy to use dashboard, so the branch
tellers or sellers can react more quickly if the
customer is of high net worth, in overdraft,
or has a complaint. The ability to recognize
customers as soon as they enter the branch and
know the reason for their visit without them
saying a word is the way to do business. To
offer further convenience, banks should provide
online appointment booking or mobile queuing
services so customers can join the queue even
before arriving at the branch.
Banks need to take the 360-view further to
include financial relationships customers have
with other institutions. Customers park their
money in various places and various products,
but are not always good at managing it. Banks
need to be able to pull data from other financial
institutions to present the customer’s entire
portfolio and provide their customer with a
comprehensive view of their overall finances
beyond the services they have at one bank.
Banks have more data on customer behavior and
interaction than any other industry, but do not
fully utilize the data. They need to mine the data
to predict customers’ demands and when they
are going to want a service before even realizing
they need it, just like Amazon does with its
recommendations. China’s second-largest bank
CCB, for example, is establishing an enterprise-
level data management department and data
analysis center to better utilize its data on high
net worth customers. HP’s experience in making
data actionable for clients in a wide variety of
industries can really make an impact on the
banking industry.
Taking data a step further, how about a bank
mining the data from the customer’s spending
behaviors to notify them of vacation specials
coming up for a cruise they have taken several
times in the past. How would the bank know
this information, because in the past the
customer used their debit card to pay for the trip?
Using spending behaviors can proactively alert
customers of things they find value in and want
to buy. These products are not bank products
but they make the bank more valuable to the
customer and provide a service of convenience,
something customer are always looking for. Can
you imagine sitting at your laptop and getting a
notice from your bank that your favorite cruise is
running a special? You click on the link, add it to
your shopping cart, click ‘Buy’ and the vacation
is booked and paid for. One last thing on your
To-Do list and it wasn’t even on the list yet! Now
that is ‘Know Your Customer’.

19. 19
Changing face of a bank branch
Moving ahead, face-to-face interaction in the branch
will change. With less focus on transactions, the
teller space is moved to a less important area of the
branch or removed entirely while the sales-centric
model is enhanced. It is improved, for instance, with
mobile queuing, allowing customers to swipe their
debit card or ID as they walk into a branch to alert
the branch they are there.
Bankers will have integrated front-end technology
at their fingertips with the use of tablets or other
mobile devices, and can access all the information
they need to greet the customer with a 360-view.
They are also aware of any product brochures
recently sent to the customers, and can follow up
on this while they are at the branch to perform
an unrelated transaction. The product offer can be
pulled up on a tablet and the customers can sign
up for the service simply by tapping on the device.
Alternatively, customers can be led to an assisted-
service touchscreen or a self-serve kiosk, where they
can also contact a specialist virtually using remote
video. In the future branch, customers can choose
to interact with the bank any way they want and
complete multiple transactions in one visit.
Face-to-face transactions outside the branch
changes as well. With evolving customer
expectations, banks have to be able to mobilize
their branch and sales force teams to meet the
customer in a non-branch location. These sales
force employees should be able to sell and transact
seamlessly, with access to the necessary
customer data and technology to complete
transactions, including card-swipe capabilities.
HP has worked with many clients wanting to
mobilize their Mortgage and Wealth Advisors,
their Small Business Bankers and their
Commercial Bankers. Communications should
also be tailored for a more personalized
experience.
The Branch of the Future introduces
virtual face-to-face interactions to highly
specialized services, such as investments
and institutionalized lending, enabling bank
employees and customers to see each other
without being in the same room. To further
enhance the experience, customers can easily
check via their mobile device if tellers are
available or whether the service queue is
long before driving to the branch. Banks also
can enable customers to communicate with
bankers via instant messaging apps and alert
bankers when they have a customer query, so
they can respond as soon as they are able to.
The Branch of the Future also includes a
seamless workflow across all channels and
is a part of an omni-channel optimization
(Figure 1). Customers are accustomed to being
able to research services via one channel
and transact on another, but banks today are
unable to effectively support this behavior.
Many still require customers to come to the
FIGURE 1 The Branch of the Future
Workflow
Remove bottlenecks, Re-engineer process
Reduce expense, Increase efficiency
Analytics
Data Storage
Customer Interaction
Hardware/Devices/Tools
upload, scan, purchase, chat
Call Centre
Mobile
Branch
On-line
Gather
Digital and non-digital information
Process
Drive efficiency and reduce time
and expense
Store
Electronic accessible information for customer
communication, regulatory reporting and compliance
Analyze
Respond
Customer Interaction
Software/Tools
,
Call Centre
Mobile
Branch
On-line
ATM
ATM
The way the customer wants
Enhance Cross sell,
effective marketing
HP Analytics and Secure Managed Services
Source: HP

20. 20
branch to complete a transaction or submit the
required documents, such as pay stubs or driver’s
license, multiple times. Customers often have to
repeat their account number and other identifying
information as they move across operators at the
call center. This disparity has to be resolved and
banks need to identify ways and technology to
create a truly omni-channel experience for the
customer.
At the core of the Branch of the Future strategy
is a digital component, which takes cost out and
enhances customer experience, thus enhancing
revenue (Figure 2). Creating a digital strategy
should aim to address antiquated business process
and operating models, for instance, allowing
customer to submit documents online, storing
these documents to be used for future product
requests, and using them to determine whether
a customer has been approved for additional
products. Digitizing internal processes at a
branch such as retail operations, audits, and logs
will not only take cost out, but also allow branch
employees to spend more time with customers.
HP has found their clients experience up to 50%
savings in operations, improvement in customer
satisfaction due to decreased time for processing
and effort from the customer and an improvement
in compliance and reporting.
To conclude, banking is a very competitive industry
and it is becoming increasingly so, with new
entrants creating new products, new services,
and new channels customers desire. Technology
can help meet evolving customer behaviors and
expectations. It can make branch operations more
efficient and effective in moving from transaction
to sales. It can help banks be more proactive in
assessing their customers’ needs and make every
interaction seamless and intuitive.
Banks of the future are about being where
customers are when they need them, and this
extends beyond typical banking services and
products. Banks should think about how they can
better improve everyday events in their customers’
life, and evolve from their traditional role to provide
additional products and services that normally
would not be associated with them.
Lori Murray has been with HP since 2010. She was in banking for 20+ years
prior to moving to HP. She is currently the Global Offering Director of Banking for
Business Process as a Service (BPaaS). She is responsible for meeting with bank
executives to understand their current strategies and initiatives and identify HP
BPaaS solutions that will assist in achieving them.
Source: HP
FIGURE 2 Benefits From Going Digital
50%
Operational saving through
digitizing paper and transform-
ing the way you do business
By digitizing your business you can achieve:
Days to mins
Improved customer experience
by giving your customers near
real-time updates for key
moments of truth using their
channel of choice
5-10%Immediate revenue
growth by reaching new
customer channels
through social, mobile
and analytics. Create
new revenue streams
Compliant
Simplify your ability to be
compliant to policy and
regulation, reduce your risk
and automate mitigation
strategies
Now HP is leading enterprises to digitize,
improving the customer experience and by providing the
bridge from your current world to the digital world
Of your
change investment
redirected on truly
transforming
projects rather
than “complying”
1
50%Up
to
HP were known for innovating PCs and printing
90%Up
to
90%
Source: HP

21. 21
Cards and Payments — The Next Generation:
Achieving Customer Satisfaction
How customers make payments is an area ripe
for innovation. In a digital world, customers want
a simple, easy, secure way to complete their
transactions, and there are many ways banks can
differentiate themselves in this area to increase
customer acquisition and retention.
Cards and payments are changing rapidly, and
there are great variations in the developments
seen from region to region or even country to
country. Many developed countries have been
using chip and PIN credit and debit cards for
years. This technology is just getting started in
the US, although some would prefer to jump
straight to mobile ecosystems. Contactless
payment, which uses radio-frequency
identification (RFID) but does not require a
signature or PIN, is also beginning to appear in
various places around the world-- although it has
its critics.
The technology for mobile wallets and mobile
payments can be cloud-based or driven by Near
Field Communications (NFC). Models have been
varied and are still emerging. It’s a chicken-and-
egg problem. Merchants don’t want to incur the
expense of replacing their current point-of-sale
(POS) systems if there isn’t any demand from
consumers, and consumers don’t want to switch
to the new technology if there aren’t enough
merchants making it available. More recently,
Bluetooth low energy (BLE) solutions using local
beacons have started to receive more interest
and may be the breakthrough hybrid needed to
deliver local payment services at the right price,
with ubiquitous technology.
Making an impact with cards and payments
When a consumer uses a card or mobile to pay
for a cup of coffee, he likely associates this
customer experience with the coffee shop, not
his bank. Even if it is a positive experience, it
will not increase his loyalty to the bank. In this
environment, how can banks increase customer
acquisition and retention with cards and
payments?
The answer is to put the customer first. The
digital consumer now drives the model of
usage. Start with the basic requirements that
transactions must be simple, easy-to-use, and
secure. Next, offer innovations that will
encourage customers to increase their loyalty,
for instance, by offering personalization,
convenience, and money-saving features.
Personalization
Personalization allows customers to feel more
connected to your brand. In cards and payments,
the simplest form of personalization involves
letting customers choose the words and images
that appear on the plastic of their payment
cards. This feature is available in many countries.
Although it is a niche, it is growing rapidly in
popularity.
Individuals are different and motivated by
different things. Some banks are experimenting
with personalizing reward programs, either
pushing the personalized solution to the
customer, or opening up features that can be self-
selected online to change the rules and rewards
behind the consumer spend. The promotional
push model requires an understanding of the
customer and creating a “market segment of

22. 22
one.” HP provides advanced analytics solutions
to analyze structured data such as the customer’s
transaction history, uniquely combined with
unstructured data such as social media postings.
This can help banks turn data into real, actionable
insights, such as personalized offers. For instance,
the analysis might lead to offering the customers
the award of a discount at their favorite restaurant
on an anniversary date that may be significant to
them, such as their wedding anniversary. When
the customer cashes in the reward, it’s a win-
win-win: the customer enjoys the discount, the
restaurant benefits from increased business, and
the bank collects transaction fees — and gains a
happier customer.
Convenience
From a customer perspective, payments must
work well, securely and be almost invisible
in their execution. The cost of switching to
another bank is low, and consumers simply
pull out another card when things do not work.
Customers do not appreciate the multi-million
dollar IT plumbing and risk management beneath
every transaction. So banks need to increase
their relevance before and after the sub-second
payment transaction. The use of loyalty coupons,
alerts, and personal finance dashboards all help
customers feel more connected to their bank’s
brand while generating more transactions.
For example, one of the biggest hassles of
international travel is making payments in
multiple countries and currencies, where travelers
need to keep up with exchange rates and fees
from one currency to the next. Banks can delight
their customers by offering a simple, secure, and
multicurrency card to eliminate these hassles. HP
makes this easy for banks by providing a multi-
currency card as part of its prepaid card services.
With this offering, banks let their customers
personalize cards with up to 12 different
currencies. And when the traveler returns home,
any funds remaining on the card can be converted
back to the customer’s home currency.
Time or money saving
When banks provide informative, time-saving
features, customers will engage and feel more
loyalty to the bank brand. Banks can provide
an advisory application to help customers
understand the tradeoffs between different
payment methods in a specific situation.
For instance, to book a hotel room, the app
might recommend using a frequent flyer
card to maximize award points. To buy a new
television, it might suggest using a different
card to minimize fees, receive an extended
warranty, take advantage of a personalized
offer, or pay in monthly installments. An
advisory application could also provide a
dashboard to help customers stick to a budget,
meet savings goals, and better understand
where they spend money.
This approach puts the modern bank back
in customers’ mind as the custodian of their
finances and a relevant partner in their day-
to-day routine. HP’s Cards and Payments
Practice can guide banks on building mobile
applications that provide smart and time-saving
features for their customers.
Case Study: Customer satisfaction using
reward programs with mobility
Chile’s third-largest bank, Banco de Crédito
e Inversiones (BCI), engaged HP to build a
mobile app for credit card rewards that use
geo-referencing capabilities on mobile devices.
After downloading the app, customers will
know when they are near a store in which they
can use their rewards. Almost 20% of BCI’s
mobile-enabled customers downloaded the app
as soon as it was available and used it actively.
In addition to increasing customer satisfaction
and engagement, BCI estimates that the
app has helped to increase their credit card
revenues by as much as 5%.

23. 23
Looking into the future of payments
The payments industry is going through an
unprecedented level of change. Simply put, the
immediacy consumers enjoy with always-on
online media has raised similar expectations of
their financial institutions, utilities providers, and
government.
• Instant gratification
• Anytime, anywhere, any device
• It’s all about trust
• Make it personal
• Business considerations
The common interaction between customers and
their Financial Institutions (FIs) is changing.
• While traditional “bricks-and-mortar” FIs are
still strong fixtures in the industry, increased
standardization of transactional payments
systems such as BPAY, POS, and Faster
Payments means FIs are being forced to
compete on price and value.
• The growth of online, self-service functions
has meant that a significant portion of the FI’s
customer base including individuals, small-
medium enterprises, and large corporations
are now more comfortable spreading their
activities across multiple FIs.
• Coupled with the ease of moving their
services to another provider, customer
expectations are increasing and loyalty is
deteriorating as customers place a premium
on the experience they receive from FIs.
• The standardization of payments systems
including mobile payments will continue
to lower the cost of entry for competitors,
particularly those that are able to offer a
niche or targeted offering, such as insurance
or credit cards.
• The retail banking business is challenged
by transactional providers, such as Coles,
PayPal, and TESCO. The wealth and securities
areas also are challenged by groups that
are able to tailor their services, for instance,
BHP’s Plum.
The dichotomy facing FIs around payments
is the ability to process transactions with
reliability and efficiency on legacy infrastructure
that has suffered from a lack of investment
over the last two decades, while bringing new
innovations to the market to protect against
new entrants and other industry segments in
the battle for the customer.
Source: HP
FIGURE 1 The New Connected Customer
Simplicity
A requirement for
acceptance
Personalization
Understanding the
individual
Security
Creating customer
confidence
Participation
Emergence of the
active customer
Sustainability
Environmental
awareness
Integration
Capitalising on
connections
Immediacy
Now or not at all
Mobility
No gaps allowed
Quality
Failure not
tolerated
Multi-Channel
Anywhere. Anytime.
Any Device.

24. 24
As an HP Fellow and Chief Technologist of the Financial Services Industry
for HP Enterprise Services in South Pacific, Daniel Biondi is responsible for
helping clients shape their IT strategy for business innovation and growth,
whilst delivering technology-enabled business solutions that reduce cost
and complexity. Daniel’s 21-plus years of experience include working with
multi-national organizations in more than 15 countries across every industry
group. His previous leadership roles include HP Regional Chief Technologist
for Latin America. Daniel is currently based in Sydney, Australia.
Source: HP
1
Gartner Inc., Transform Your Business With the Nexus of Forces, G00262353, 28 February 2014
According to Gartner, in reference to the ‘Nexus
of Forces’, states:
“The trends that make up the nexus have given
enterprises the means to reach new customer
segments, improve customer interactions, launch
new products, achieve previously unknown levels
of operational efficiency and differentiate for
competitive advantage.” 1
These enterprises understand the subtle
relationships between behavior, sentiment,
history, location, and intention and are agile
to react in constant changing markets without
uprooting proven business models and system
architectures.
Every organization will be affected by this
convergence of technologies and will need to
identify ways to respond.
The cloud as an agile service delivery model is
here to stay and is only growing bigger and more
pervasive by the day. Mobile is becoming the
way people interact, anytime and anywhere, with
the organizations with which they do business.
Social insights will increasingly provide the
platform upon which to build relationships with
the next generation of customers and employees,
and generations after that. Real-time analytics
will become the only way FIs can efficiently
handle the exploding volume of behavioral,
transactional, and regulatory data streams.
Individually, these trends affect parts of the
value chain. Together, they transform it. While
this won’t happen overnight, we need only look
around at the changes wrought by smartphones
and tablets to see how quickly the mobile
industry has transformed. The same can be said
for the payments industry, where the process has
already started and cannot be stopped.
HP powers over 13 billion transactions
globally
HP administers more than 3 million merchant
accounts, 68 million cardholder accounts,
and over 13 billion transactions globally. HP
engineers and delivers 24x7 continuous payment
services to ensure service quality and peace of
mind. Fifty-one clients in 29 countries rely on
HP for critical transaction processing-related
services, including card issuing, merchant
acquiring, and transaction switching across
payment scheme networks. Services include
electronic invoices and business exchange
services, commercial and consumer cards, check
and loans processing, pre-paid card services, PCI
compliance, mobile payments, loyalty programs,
web solutions, and other channels.

25. 25