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People First: The Primacy of People in the Digital Age

2016 Accenture

Technology Vision

for Banking

2016 Accenture Technology Vision for Banking

Intelligent

Automation

Liquid

Workforce

Platform

EconomyPredictable

Disruption

Digital

Trust

Copyright © 2016 Accenture. All rights reserved. 2

The Accenture Technology Vision 2016 identifies five technology trends fueled by the people first principle

and that are essential to banking success in the digital economy.

The Platform

EconomyIt’s time for banks to join

in and welcome others

3Copyright © 2016 Accenture. All rights reserved.

New technology

platforms have the

power to drive banking

innovation• 83% believe platforms will be the “glue” that bring

organizations together in the digital economy

• 46% believe adopting a platform-based business

model and engaging in ecosystems of digital partners

to create value are very critical to their business

success

• 59% are already investing in a competitive digital

technology program as part of their business strategy.

• 52% percent expect to be working with new digital

partners in their industry in the next two years; 42%

expect to be working with new digital partners outside

the industry.

The value for banks is being fueled by three key

natural traits


Distribution Power Law

Enables scale by allowing non-

financial services providers in the

network to draw on bank customer

data in ethical and secure ways to

generate new revenue in the ‘long

tail’ of the distribution curve—

avoiding diminishing returns

associated with traditional value

chain models.

Network Effects

Two user groups generate

network value for each other,

resulting in mutual benefits

that drive demand-side

economies of scale.

Network Synergy

Cross-industry, mutually-benefiting

synergies around growth and

competitiveness arising as the

right participants come together,

link their products/services and

create a marketplace that satisfies

a specific customer need that

would be cost-prohibitive to do

alone.

How should banks

participate?


Banks should consider operating across a

combination of five key roles:

• Relationship player. The bank owns the

relationship with customers, leveraging partners to

provide solutions.

• Platform provider. The bank provides a platform

for sellers, buyers and content providers to interact.

• Core financial services utility/manufacturer. The

traditional role of banks in providing financial

services.

• Innovation playmaker. The bank participates in

digital banking ecosystems, using a full spectrum of

approaches to provide capital and to enter new

businesses.

• Digital ID enabler. The bank operates a secure

platform, offering consumers access to digital

commerce.

Digital Trust

Erase the trust

paradox in banking


Banks’ digital

trust paradox is

unsustainable

• 84% of bankers agree trust is the cornerstone

of the digital economy

• 86% of consumers in North America trust their

bank over all other institutions to securely

manage their personal data

• Customers rank financial services companies

among the least trusted by customers to

behave in ethical ways.

12015 North America Consumer Digital Banking Survey22015 Edelman Trust Barometer Report

(Re)building bank

customer confidence

relies on two major

components:

Ethics and Security

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A culture of ethics in banking requires

decisive actions in key areas:

• Communicate clearly to consumers on

customer data being collected, for what purpose,

who can access it legally and how it will be used.

• Use data primarily to offer customers

reciprocal benefits that are directly relevant to

the data and service being provided.

• Be responsible to accurately collect, manage

and access customer information, with

accountability for the use of data.

Banks can combine ethics with stronger security

strategies toward higher digital trust:


Adopt a zero-tolerance

approach with a cyber-

risk appetite in moving

toward open and

ecosystem banking.

Incorporate next-

generation security

mechanisms in

managing data

security risks.

Rethink identity and

access management,

using more innovative

techniques.

Integrate security

solutions—such as

security-aware

application design,

integrated database

security and others—

into new products.

Identify indicators of

risky insider activity to

detect early signs of

possible fraud or

criminal activity.

Liquid

Workforce Bank on “fluid” teams

focused on results


Banks realize a

“liquid” workforce is a

competitive advantage

74% of bank executives believe that a more “fluid”

workforce would improve innovation.

55% of jobs in banks that have a digital component

today (compared to 50% across all industries);

bank executives expect this number to increase to

61% in three years.

75% of banking executives believe in three years

the proportion of workers will shift towards more

multi-skilled, flexible employees.

To start and progress their

digital transformation,

banks must develop new,

more fluid, workforce

strategies


Skills

Build learning as a

core competency in the

organization to actively

generate skills that are

in demand.

Projects

Use technology to

coalesce and disband

internal and external talent

at your disposal for new

innovative projects.

Organization

Optimize workforce

responsiveness with

insightful analytics that

provide a real-time view

of organizational

capabilities.

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Forward-thinking banks will go

further to organize their workforces

around business outcomes and

business services (ex, giving

customers a unified view of their

financial picture), relying on:

Best-fit

delivery

approach with

“multi-speed”

features

Bank’s

committed

investment

Value for

the

customer

Service

structured

around an

outcome

Knowledge

and skills to

deliver and

sustain it

• Small teams that support the evolution

of the outcome

• Hard and soft skills—particularly,

communications and collaboration—

development and diversity embedded

into the team

• External skill sources, such as

freelancers, contractors,

crowdsourcing, application developers

and traditional outsourcers, to

supplement the core internal

workforce

Intelligent

Automation The essential new

co-worker in digital

banking

Banks have an

opportunity to improve

operations

• 86% of bank executives agree the widespread use of

artificial intelligence (AI) provides for a competitive

advantage beyond cost.

• 77% expect AI will be a significant change or complete

transformation for banking over the next three years

• Banks plan to use cognitive information systems or

increase intelligent automation:

- Knowledge worker tasks (91%)

- Customer interaction/experience (88%)

- IT tasks (90%)

- Embedded AI solutions (80%)

- Machine learning (79%)

Better

outcomes

Banks can drive more value by pairing

Intelligent Automation with people


Faster

decisions

Machines analyze banks’ massive data

simultaneously in seconds to be used by bank

advisors to offer more personalized service.

Greater

efficiency

Automate, speed up and off-load more routine

tasks and free executives to focus on higher-value

functions.

Highly-tailored

customer

service

Machines quickly access and analyze Big Data to

verify customer identity, understand problems, find

solutions, recommend services and hand off to a

human specialist.

New ways of

working

Machines analyze job applicant traits to predict

which ones will leave and recommend retention

strategies—insights that HR managers can use to

personalize employee programs.

Capture new

revenue

Serve low-to-medium net worth customers with a

personal touch which banks could not do profitably

in the past.

People + machine possibilities

Rally the troops. Leaders must be advocates for doing things differently as humans and machines work

together more collaboratively.

Sharpen the human edge. Revise the organization’s talent development programs to reflect the more

strategic work that people will perform.

Close the trust gap. Leaders can grow middle managers’ trust of intelligent systems by choosing

systems with proven track records.

Chart a course of discovery. Create a union of managers and machines that multiplies the value that

each are able to deliver alone.

Four ways banks can create more productive

relationships between people and machines


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Predictable

DisruptionBanks need to be

proactive to spot the

next wave


• 85% of bankers agree that bank industry boundaries

are being erased and new paradigms are emerging

with every industry being significantly impacted

• 45% of bankers say financial services companies are

going through significant digital business

transformation or digitally-enabled change

• 27% of bankers believe the industrial Internet/Intranet

of Things will cause a complete transformation of the

industry

Fast-emerging, cross-

industry digital

ecosystems likely to

usher new disruption

for banks

The opportunity? Predicting digital disruption

in banking

Copyright © 2016 Accenture. All rights reserved. 16

Large, traditional banks with strong consumer

and corporate customer relationships across

industries are particularly well placed to watch for

and recognize three indicators of ecosystem-

driven disruption:

Rapid growth and patterns of digital

ecosystems inside and outside of banking.

Shifts—gradual or sudden—in consumer

income and spending that may indicate needs

and point to new bank products or services.

Use of new technologies, such as the Internet of

Things, to reshape industry processes, products

and services.

• Envision your role, and new partnering relationships, in

the next phase of economic disruption.

• Pilot an initial foray into a digital ecosystem, targeting

one business process, product, or service best aligns with

your prioritization of potential disruptions.

• Create new metrics to measure success in digital

ecosystems by extracting insights from your pilot to

uncover potential indicators.

• Identify new skills demanded to support the expansion of

your digital ecosystem strategy, and develop a plan to

acquire these high-priority skills.

• Continue to increase information security, boosting

investment in machine-to-machine security and

authorization technologies to support ecosystem-driven

innovation.

Copyright © 2016 Accenture. All rights reserved.

With predictive capabilities, banks can develop

strategies to forge new roles and new paths