Covid-19 has brought productivity challenges that banks had to face front and center. These challenges ranged from keeping-up with demand, to going virtual. However, one of the most unexpected challenges was something that banks have struggled with before the global pandemic; finding talent. This long-contested issue has forced banks to rethink what constitutes a sustainable ecosystem of analytics partners, and how an analytics partner is capable of supporting banks in their initiatives.
Financial institutions have a long history of partnering with consulting firms, IT contractors, market research firms, and several other agencies who provide the horsepower behind their core processes and corporate functions. Now, more than ever, this is being re-evaluated as definitions of what is core versus non-core are changing. The lines between data and technology are being blurred, customer experience is becoming more important, and going digital is at the forefront. To retain their competitive edge, leaders are seeking the right partners to support their digital, technology, and customer experience initiatives. As we round off the year 2020, there is no denying the pivotal role that insights and analytics will play in this.
In our conversations with industry leaders, fulfilling the following parameters will help ensure a successful partnership.
#1: Business Continuity and Clear SLAs
Business continuity is the concrete planning and preparation that ensures organizations are able to continue critical business functions in the case of an emergency. Regardless of the nature of these emergencies, business continuity and SLAs ensure that organizations not only continue to operate but also continue to receive the optimal level of service from their vendors. Creating a business ecosystem that can function during unexpected events has not been more important and critical than earlier this year. Almost overnight, offices had to be shut-down, and everyone had to mobilize a remote working environment quickly.
However, while the majority of vendors currently have an IT infrastructure in place to support this, a select few had a rigorous, battle-tested solution in place prior to the pandemic. We have observed that global organizations, especially in the Financial Services sector, are seeking partners that have a comprehensive and rigorous business continuity plan that encapsulates people, process, and technology.
#2: “Always-On” Coverage
In today’s “always-on” world, where new information is being shared by the second, there is tremendous value that global coordinated teams can provide. The ability to integrate actions, knowledge, and goals to achieve common objectives (regardless of location and function) is one of the key aspects banks are looking at while selecting a trusted insights and analytics partner. There are various options that organizations can choose from, ranging from a partner that provides quarterly insight reports to a partner that offers an intuitive insights and analytics platform. However, finding the right fit for your organization’s current strategies is key.
Currently, various banks are looking for ways to improve their response times, reduce cost, and achieve execution efficiency. Many have started arming themselves with platforms that leverages both domain expertise and cutting-edge technology to achieve “one version of the truth” at an enterprise level. We have also observed that having curated competitor intelligence also enabled organizations to stay ahead of the competition.
#3: Deep Domain Expertise
In the race to gather the most intelligence and data, it has become apparent that true value lies within the insights gathered from it. Without any context, intelligence and data is just mere numbers that are to be stored and forgotten about. Due to this realization, banks not only need mathematicians and data scientists to gather and analyze numbers, but they also need domain experts who can decode what the numbers say and put it into the context of the business problem. However, many banks have found it challenging to find domain experts that possess these specialized skills (especially in certain geographies), along with continuing the hiring process.
Today, all top 10 investment banks have adopted a hybrid model that leverages an in-house captive unit and third-party consultant to build-up their insights and analytics programs. While captive centers bring in technology that is core to the bank, third-party vendors bring the specialized skills that are needed in a domain expert.
#4: Ability to Scape Up and Down
The pandemic has definitely shown the need for organizations to be able to quickly scale up or scale down to match the demand it is experiencing. In order to keep up with increased demand and improve customer experience, banks have faced the challenge of quickly scaling-up their people, processes, and technology. Many areas of banking such as research in different parts of the bank (investment banking, global markets), customer onboarding and underwriting in commercial banking, client services in asset and wealth management, data services, and customer services have called for a surge in support. However, with there being a lack of certainty in how long this surge will last, many banks have been hesitant to hire. Instead, with the increased proliferation of FinTech that was previously unavailable, banks are now able to partner with and rely on service providers.
Despite an uncertain future, many banks have been able to quickly scale-up or scale-down thanks to partnerships with global vendors. Thanks to strict regulations and careful monitoring, these partnerships have ensured that banks can keep-up with both strict standards and increased volumes of work, while also being able to scale-down once the workload has decreased. This ensures that teams, technology, and processes are not being underutilized or overutilized.
#5: Aligned Business Focus
When establishing a relationship with vendors, one of the biggest fears is that there is a misalignment or misunderstanding when it comes to objectives. Over the years, many banks have forged relationships with an analytics partner and third parties that have completely aligned with the bank’s goals, objectives, and standard of work. Vendors that took the extra step to collaborate with key decision-makers and understand the organization’s insight-out found a successful partnership. Rather than being cost-centers for banks, vendors have instead become their competitive advantage through communication and strict standards.
Many large banks have started partnering with vendors who take a strategic approach to project creation, where vendors ensure that the project size is right for the bank’s existing bandwidth. Additionally, the banks that have found the most success with vendors are the ones who see their partnership as a relationship that they can rely on.