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Digital Channels Investments Soar, But at What Cost?

It is no surprise that adding and expanding digital channel technologies are on top of almost every bank technology executives’ agenda. As banks compete against each other for customers, they want to be seen as being able to provide the latest and greatest offerings of the smartphone-centric age. In CEB’s latest survey, digital channel solutions accounted for four out of the top six most recently installed technologies at commercial banks. This category includes technologies such as corporate online and mobile banking and payments platforms as well as business-to-bank integration.

Digital solutions provide tremendous value to corporate users, enabling them to have better access to accounts and information along with additional product features, enhanced self-service capabilities, and value-added services like reporting and dashboards of account and transaction status. Digital channel technologies also help institutions to lower cost by freeing relationship managers from handling routine service requests to focus on higher value work.

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Keeping Channel and Product Investments at Parity

However, as commercial banks have been focusing on these front-end channels, they have been neglecting the critical product applications that support the underlying products and services. Crucial product and compliance technologies such as commercial loan origination and monitoring, payments engines and hubs, and AML and KYC rank near the bottom of the replacement cycle, with many having been installed at least ten years ago at a great number of banks.

Because the best channel solutions are only as good as the products that they provide access to, commercial banks should pursue a more balance approach to technology investment and adoption and look to improve or replace outdated product systems. The results from CEB’s 2015 Financial Technology Survey will enable technology executives to benchmark planned investments against those of their peers and understand the major drivers behind
purchasing decisions.

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