LAS VEGAS, Nov. 13, 2007 — Banks are getting squeezed on all sides by consolidation, regulation, lower margins and fierce competition. Couple that with the rise of consumerism – or the push by consumers for better overall experiences and services – and it’s understandable why banks are so concerned over customer attraction, retention and extension.
Today, at one of the leading forums for the financial services industry, the BAI Retail Delivery Conference & Expo, Microsoft’s U.S. Financial Services Group is showcasing a number of new technologies to help banks differentiate – and ultimately win over new customers, retain long-standing ones and extend relationships to achieve a greater share of wallet. To learn more, PressPass spoke with Tracy Issel, general manager, U.S. Financial Services Group at Microsoft.
PressPass: What are the three biggest challenges facing banks today?
Issel: Unlike in years past, where growing market share was a priority, banks today are primarily concerned with attracting new customers, retaining existing ones and extending those relationships to achieve a greater share of wallet. Differentiation, then, becomes critical in a commoditized market in which many customers view one bank as indistinguishable from another. As consumers get quality service and superior experiences from other institutions – such as making travel plans online or booking dinner reservations – they expect the same personalized, high-quality service from their financial institutions.
That’s why it’s so important that banks differentiate from competitors and provide the superior service that customers expect. Failure to meet expectations can result in a customer opening an account across the street. Thankfully, technology can be a tool to create this differentiation for the industry. Technology can help banks find new value in existing systems, explore new market opportunities and realize measurable returns on their investments. Microsoft’s software, in particular, is well positioned to help banks achieve this differentiation in the market – whether it’s attracting customers by creating a dazzling online banking interface with Microsoft Silverlight or retaining customers by providing a complete, 360-degree view of their accounts with Microsoft Dynamics CRM.
PressPass: You mentioned challenges around maintaining a competitive advantage. But how have outside factors, such as the subprime mortgage crisis, affected the banking industry?
Issel: Well, it’s obviously had an enormous effect. In the wake of mortgage lending crisis, even good credit has become difficult to move. Large banks that collateralized loans and sold them off in secondary market will continue to feel the pressure from reassessing their exposure. In times like these, banks typically resort to beefing up their middle office infrastructure and resources to deal with risk management. There is a need to price complex financial instruments, gauge overall exposure and build models to predict future cash flows. We believe that technology can help play a problem-solving role here as well. Microsoft solutions, such as Microsoft PerformancePoint Server, Windows Compute Cluster, Excel 2007 and Excel Services, can help provide insight into the most critical problem areas, while also alleviate complex computations in an effort to determine a bank’s risk exposure.
PressPass: During this year’s BAI Retail Delivery Conference & Expo, Microsoft has a number of events and demonstrations planned. What is Microsoft’s presence at the show?Issel: In our booth Microsoft will demonstrate a number of new applications and partner implementations that showcase how Microsoft-based technologies can impact the banking community. These include:
Next-generation online banking demo – Based on Microsoft Silverlight technology, this demo highlights the future online banking experience that is browser and platform independent, including enhanced functionality and unique visual appeal.
New campaign management for banking – Featuring Microsoft and partner technologies, this demo showcases an end-to-end campaign management and delivery system that provides consistency of execution across various banking channels, as well as intelligence regarding each campaign.
Unified communications in banking – Built upon Microsoft’s recently launched Unified Communications and Collaboration platform, this demo showcases how banks can better collaborate internally between individuals, branches and departments, and externally among their industry partners.
Performance management in banking – Powered by Microsoft PerformancePoint Server 2007, this demo highlights how banks can build an enterprise-grade, scalable performance management application that improves performance while providing a high degree of data confidence and control.
Bank of America mobile banking service – Accessed by Windows Mobile phones and powered in part by Microsoft MapPoint, Bank of America’s new mobile service gives customers a friendly interface to manage personal finances “on the go.”
PressPass: How are customers taking advantage of Microsoft’s platform to solve problems?
Issel: One example was announced at the show, as Microsoft announced that Windows Mobile phones and Microsoft MapPoint software are providing consumers with a feature-rich user interface when they access the Bank of America’s new Mobile Banking service, making it the most popular smartphone operating system used by its customers. This announcement shows the collaboration between two brand leaders to bring an innovative solution to today’s banking customers. With the launch of its new service, Bank of America’s banking customers are now able to more securely access balance information, pay bills, transfer funds and find nearby ATMs or banking centers directly from their Windows Mobile phones. In addition, customers benefit from the range of security and systems management options built into the Windows Mobile platform, ensuring the secure transfer of financial information between the bank and its customers.
PressPass: How would you describe Microsoft’s current vision for the banking industry?
Issel: I think it starts with what industry problem we’re trying to solve. Banks, in order to remain competitive in the market, must differentiate by offering more unique and personalized services to draw in customers. They also have to keep these customers through superior, integrated experiences. Finally, they have to extend these relationships to new products and offerings to gain a greater share of wallet in the marketplace. Microsoft’s vision is to provide banks with familiar, easy-to-use and widely supported software to deliver these differentiated services. At the end of the day, our company is really all about giving individuals within banks access to tools – unified communications, business intelligence, etc. – through an interface they use every day. Banks won’t succeed through “ivory tower” information technology or top-down infrastructure. Ideas and action have to come from employees all along the value chain in order to make their institution stand out from the pack – and ultimately succeed with customers.
PressPass: How committed is Microsoft to the banking industry?
Issel: We’re very committed to serving this industry. In the past five years, Microsoft has grown from six to 600 people supporting the financial services business. Our banking team is made up of industry veterans who have come to us from leading banking institutions and investment firms. We leverage their years of industry experience and expertise to provide banks with technology insight, reusable business components and partner solutions built on the Microsoft platform. Microsoft’s large and dynamic partner community, as well as our nearly US$7 billion in R&D investments, has allowed us to stay on top of key banking trends. We also provide industry feedback directly back to our product teams, so that they are able to continue developing solutions applicable to our customers.