Can there be such a thing as bad luck in banking?
A worthy question, given the fact that Friday the 13th has just passed and some of us spent the day dodging black cats, crossing our fingers or perhaps just staying under the covers. Banks, faced with a perpetual and growing challenge from tech-driven upstarts known as FinTechs, could be forgiven for thinking that every day is Friday the 13th, outgunned as some feel in the race to keep tech-savvy consumers content.
In the latest Topic TBD, PYMNTS’ Karen Webster posed that very question about bad luck to Lisa Fugate, vice president of product management at i2c.
“I don’t know if it is as much as being unlucky as being stuck,” said Fugate. Some of those financial institutions (FIs) want to innovate and understand that they need to.
“There are just so many things coming at them,” she said. “[The FIs] have tried things like setting up innovation labs, but there’s the [question] with ‘Well, what do you do with them?’ You can’t really scale those innovation labs necessarily.”
Banks themselves have the advantage of knowing their clients, but they get these challenges that abound in picking new technologies, amid working with legacy systems, said Fugate. And those legacy systems can be defined by a static operating environment.
Additional hurdles, said Fugate, come with the length of time it takes to successfully undertake product development — a timeline that has shortened considerably from 10 years to under two years. That can be a tough challenge as banks, she said, find their technology is not where it used to be, but they have new demands from their customers.
Against this pressured backdrop, the question arises as to just what financial institutions should be doing. One salve, Fugate said, can be found in agile processing. “When we talk about agile processing, we’re talking more about the ability to move quickly and bring innovative and compelling solutions to the market.” The actual processing issue, she said, involves card issuers and brings flexibility and control to create and execute a bank’s unique roadmap and what’s needed to drive more revenue.
Some of the key components and advantages of agile processing center on the fact that those platforms, said Fugate, are configurable and multifunctional, with the added benefit of real-time feedback.
For the FI burdened by legacy systems and a static infrastructure but that wants to make the leap into the digital, customer-focused realm, said Fugate, i2C offers several different payment options across credit and debit. In credit, she noted that agile processing can be useful in the case where an FI is offering a revolving credit program, with SMBs in focus, using information that is already on hand. The key here is the ability to speedily gain access to other financing.
In an example with a bakery, she said, the baker’s high-end, commercial-grade oven breaks — on Friday the 13th, no less. “What if that bakery was able to easily click on a button from their account and request term financing?” she asked. Or an installment plan or other financing separate from a credit line? “The FI has the ability to do this fast,” said Fugate, as the information needed is already on hand, and all that is needed is to add another account.
For the FI, she said, this is another way to drive revenue, while, at the same time, serving customer needs with speed, cementing the relationships between the two. After all, she noted, we live in an age where people can control the lights in their home with their cellphones and expect to have the same control over their financial information, its flow and their own knowledge at any given time.
With real-time alerts and consistent communications that are not necessarily tied to marketing, said Fugate, FIs can have a leg-up on “leveraging the moment.” That leverage can also extend to commerce, wherein, explained Fugate, a cardholder calling into a customer support center (she noted that such interactions are negative at the beginning, as customers may be experiencing a problem or have questions about their cards) can be rewarded at the end of the support process, with, say, a coffee at their local coffee shop as a thank you for continued loyalty. Such rewards can go a long way towards changing the way a cardholder thinks about the FI’s brand and the card itself.
To move beyond legacy systems, said Fugate, an FI must understand what its cardholder base looks like today and what it wants that base to look like in the future. “Once you identify those pieces,” she said, it’s a matter of “working with whoever their technology provider is” and conducting research into what the technology options are and how that can bridge the movement into the future.