| If you don't have an account, Register here |
At HFS we’re calling 2023 the year of digital dichotomy. On one hand, there is an imminent “slowdown” given myriad macroeconomic headwinds and other factors, and on the other, there is a “big hurry” to innovate and find new sources of value to grow and differentiate. In financial services, the lion’s share of digital investment has gone to retail banking business lines, with a heavy emphasis on customer experience (CX). But commercial banking and its institutional customers are hungry for innovation and ease of onboarding and servicing.
In this edition of HFS Unfiltered, Elena Christopher talks shop with Sumanta Basu, Global Head, Intelligent Process Automation at Wipro, and Doug Shum, Director of Financial Services Solutions at Appian about how their firms are working together to seriously amp customer experience for commercial banks and institutional customers.
You can listen above or watch this HFS Videocast here:
Key discussion topics include:
You can also listen on:
• Apple Podcasts
• Spotify
• Google Podcasts
• Anchor
This transcript was auto-generated from the original recording and lightly edited for readability. We've done our best to catch errors, but names, technical terms, and company references may be misspelled or imperfectly captured. For the definitive version, please refer to the original audio or video. Views expressed are the speakers' own.
Hi, everyone. Welcome to HFS Unfiltered. I’m Elena Christopher, the Chief Research Officer at HFS Research. And today, we are going to be discussing how to drive meaningful customer experience beyond retail banking to institutional and commercial banking — oh, by the way, in the midst of ongoing market headwinds. So I’m very pleased to introduce an esteemed panel that will be having this discussion with me today. I’m very pleased to welcome Doug Shum, the Director of Financial Services Solutions at Appian, as well as Sumanta Basu, the Global Head of Intelligent Process Automation at Wipro. Welcome, gentlemen. Let’s dive right into this. Sumanta, I’d like to start with you. It’s, gosh, 2023 has been an interesting year. In fact, at HFS we’ve been calling it the year of the digital dichotomy. What I mean by this phrase: on one hand, we have the imminent slowdown, given all the myriad macroeconomic headwinds and various market factors out there. So we have the slowdown on one hand, but on the other hand, there’s what we’ve been calling the big hurry to innovate. And really, across all sectors, but certainly in financial services, firms are looking for new sources of value and interesting new ways to grow and differentiate. So, Sumanta, I’d love to start with you. Given this digital dichotomy scenario that I just laid out, what are you seeing financial services firms do to really try and grapple with this so-called digital dichotomy?
So, Elena, the financial services sector’s customers are really going through an era of digital disruption. The way they run their operations, the way they achieve their business targets — a huge amount of disruption is happening today. And the reason for that is that technology is actually facilitating that, helping them strategize their business operations, to service their customers more efficiently and in a faster, more agile way. On the other hand, as you know, financial services is a very highly regulated industry. So in the process, when you’re making things more automated and more agile, a process has to be visible and a process has to be transparent. So, considering these two — this digital dichotomy, for that matter — customers are doing three things. What we see in the market is, they are enhancing the core customer experience in the front. So take the example of onboarding a customer through mobile, fully paperless, automated, digital. You’re making a payment, or you’re applying for something, or handling fraud or disputes. Those kinds of customer engagement experiences are one aspect, which is going through huge changes; a lot of technologies are there. The second aspect is the middle office. As you know, especially in the financial services industry, the middle office plays a very, very important role. If you submit something, it goes to some checks, some validation, some verification, and then goes to the back office to upload to the back-office system. That is also getting a lot of automation — more automated decisions, more automations are happening there. And third is your real back office, powered by a process orchestration layer, heavily integrated with your downstream systems, which can really help you do faster onboarding, faster loan processing, faster claim processing, get an insurance quote just like that. These are the various possibilities. And to do that, the most important thing happening today is that most customers are using Appian, that powerful platform, along with various top-ups like your cloud APIs, AI/ML APIs, and GenAI technologies. That’s what we see, Elena.
Thank you, Sumanta. So just sort of unpacking that response a bit, part of what you discussed with us was the various ways you’re seeing financial services firms — it’s really going across the front, middle, and back office. But let’s talk about that front office piece. And Doug, I’d like to go to you on this. Within Sumanta’s response, you mentioned customer experience, but I want to frame this up a little bit, because when we look at the history of digital investment in financial services, so much of where that investment has gone has been in retail banking. Retail banking has really reaped, I would say, the lion’s share of investment in these digital capabilities. And so, in that digital dichotomy paradigm, there’s certainly other sectors of financial services like commercial banking, and maybe segments dealing with institutional customers, that have been, shall we say, maybe a little light on some of the investment in things like enhanced customer experience. You just don’t get that same focus — even some of your examples, Sumanta, like the mobile experience, have been a bit light in commercial and institutional segments. But Doug, I’d love to hear a bit from you about what you and Appian are doing to help perhaps better drive customer experience beyond retail banking within financial services.
Yeah, that’s a great point. You’re right. Retail banking is always the focus when you think about customer experience, but the reality is we have to think about our commercial and our institutional customers as well. They’re our most complex customer relationships, and that’s a little bit of the reason why a lot of financial institutions don’t focus on that customer experience, whether it’s the online banking or even the onboarding experience — because it’s so complex. There are a lot of additional processes and things that they have to go through, especially when you think about the regulatory landscape and the regulatory requirements that a financial institution must complete for commercial and institutional customers. We’ve got to make sure there’s no money laundering going on, make sure that these commercial customers aren’t doing business with entities they shouldn’t be. So what that’s done is it’s kind of broken that customer experience, where it’s not an ideal customer experience. Forbes actually did a study where they said 89% of commercial treasurers have had a bad experience during the onboarding process, and 13% of those decided to walk away. That’s customers that are walking out the door. So we can no longer focus on just that retail customer experience. We have to start to think about our commercial and institutional customers. Now, how do we do that? We have to take all of those complex processes with that relationship, and we have to automate that. So that’s what we’ve been very focused on. That customer onboarding needs to be a seamless process. It needs to be seamless from my employee’s perspective as well as from my customer’s perspective. I can’t inundate my commercial and institutional customers with emails requesting additional information all the time. I need to have a way for them to submit that information to me online through my online channel. I have a secured customer site: here’s the list of all the things I need from you, customer — submit that information to me, versus me sending out multiple emails, because in a lot of cases we have multiple groups within our financial organizations that may need information. So it isn’t just one person always communicating and requesting that information; I could have various departments requesting that. We don’t want that to be a broken customer experience. So by bringing it all together into an automated system, now we can onboard that customer, they know exactly what documentation they need to submit, and they can submit it electronically — because our commercial and institutional customers, they’re busy. They don’t want to spend time reading all my emails that keep requesting additional information. So having it all seamlessly in one system. Now, the other thing I would caution here is that, especially in the regulatory landscape, we have to have so many processes. We need to bring all of that process together. It needs to be seamless for the customer and institutional customer, because otherwise, again, I’ll break that customer experience. Just because I have to follow those processes doesn’t mean my customer should be impacted by that.
Got it. Thank you for that, Doug. So it sounds like what’s being encapsulated here is a customer life cycle management approach, if you will, but with heavy emphasis on — I think you articulated this very well and very pointedly, and thus it bears repeating — that you have to get it right at the onset. Thus the immense importance of the onboarding. Is that fair?
Yes, absolutely, absolutely. And you know, you bring up another point there: it’s not just that the onboarding stops. I would also caution, we need to make sure that ongoing servicing of the customer is also seamless and also a great user experience. So when the customer actually has changes they need to make to their relationship with my organization, they should be able to submit those changes or request those changes through that same secured portal. Don’t make them call into a call center or send an email to a general email box. Again, nobody wants to do that. We don’t want to do that in our own personal space; we don’t want to have to call into call centers. Neither do our commercial or institutional customers.
Yeah, 100%. And so within that — I’ll underscore that as well — customer experience for commercial and institutional customers really does need to adhere to this customer life cycle management approach, and within that, it doesn’t stop at onboarding. The digital experience needs to go beyond, to the servicing as well, as you stated, Doug. Sumanta, absolutely, I would love to get you to weigh in on this. So Doug just shared a perspective about what Appian’s been building out around what I’ll continue to call this customer life cycle management — again, onboarding and servicing for commercial and institutional customers. Now, Wipro is partnering with Appian to bring some of these capabilities to its financial services clients. What I’d love to hear you comment on, Sumanta, is: what’s Wipro really bringing to the mix to complement the Appian platform and perhaps extend it to really help drive the customer experience transformation, sort of as you were articulating in your prior comment, from the front to the middle to the back? What do you think, Sumanta?
So, Elena, as you know, the Appian platform has three distinct capabilities as part of a customer life cycle platform. One is, of course, customer onboarding; KYC; and connected servicing. If you see those platforms as a full-fledged platform, when you go to the customer, there are three value propositions we bring. One is our capability of design. Wipro has bought a company called Designit recently, and Designit does the service design of all three offices, which is front office, middle office, and back office. We create those new processes — how it will look and how it will help the customer make their business operations more agile and faster. That’s the first thing we bring in. The second thing we bring in is the latest and greatest technologies available in the market, which come as a top-up as part of the offering. So let me give an example. Say you are building an eKYC platform using Appian, and, for example, you want to detect and verify an ID in an automated way. Suppose you have submitted your SSN number, or your driving license, or your passport; then, once you submit all your documents, you extract all that information, create a form automatically, apply the digital signature, and push it to the downstream system or business processes. To do that, you use a lot of AI/ML technologies on top of Appian, along with IDP. We bring all those value propositions. Third, the thing which we love, our IPs and accelerators. We have our own IP — a document management platform and cloud and digital asset management platform called ICA, which we bring as part of the document management services that goes along with the CLM platforms. The second most important thing we bring is the cognitive chatbots, powered by Avamo — again, it’s a Wipro company. And third is a lot of GenAI technologies that we’ve built as our IP accelerators, in terms of when you go to customer service. For example, I want to launch a contact center. I want to put in a case to handle a dispute or my claim or my settlement. In such a scenario, the GenAI technology chatbot comes into play, which will give you a how-to guide and help you create a case in just seconds, instead of waiting in the call center. So these are the three things. One is the design capability you bring in, Elena, which in all three offices — front office, middle office, back office — helps them transform how the new business process looks, which will of course be implemented with the Appian platform. And third is our IPs and accelerators, Elena.
Got it. Thank you for that, Sumanta. It very much aligns with a concept that HFS has, which is what we call our OneOffice — essentially the impact that emerging technology has on an enterprise, to help break down those silos that exist between front, middle, and back office, and make them work more effectively. In a manner of speaking, the capabilities you’ve outlined that Wipro brings into the mix to complement Appian are a great example of the OneOffice in action. So thank you for that, Sumanta. Doug, I’d love to go back to something you referenced in your comments previously that’s of immense importance, which is regulatory compliance requirements. They certainly come into play regarding client onboarding, but certainly as it pertains to servicing as well, and they’re very complex. In the context of commercial and institutional financial services customers, certainly much more so than in the retail environment. I would love it if maybe you could take a couple of moments and just talk through how you are addressing regulatory requirements, and perhaps even how they are being optimized.
Yeah, that’s a critical, critical component for every financial institution. First of all, obviously, we have documented processes. Every financial institution has to have documented processes to prove to regulators that, hey, I am following the regulations and I am in compliance. But if those processes are manual, there’s not a very good way for me to prove to a regulator that I am in fact following those processes, and things can get broken. We see it all the time. Banks end up in the headlines for all the wrong reasons because, well, we got busy, we weren’t following all the processes, or we didn’t follow all the processes for every customer just because we were inundated with work. We make it so complex on ourselves because we don’t automate the process. The reality is we’ve got to automate those processes, and that’s what we’ve done with our CLM — the fact that we now allow you to build those processes into the system so that now it’s automated. There’s no skipping a step. There’s no missing this for half the customers or things of that nature. But then, back to that user experience, when regulations and user experience kind of butt heads a little bit — the fact that we now have to go into all these different systems to verify the customers. All these data systems: we’ll use KYC as an example. We have to do KYC data checks. For commercial and institutional customers, I may go into two or three different systems. From a user experience standpoint, it’s not a good one, because now I’m going into 2, 3, 4 different systems. If I’m going into onboarding and going into servicing, plus I’m going into two or three different data systems, it takes time. Now, if we can integrate all of those systems together — which is what we do — that’s the value. That’s one of the huge aspects to the Appian platform. In fact, we can integrate to any system. It doesn’t matter. Integration is what we do best. We can integrate to all those systems, so no longer does my team need to go into multiple systems. I go into just one system, and that’s the onboarding or servicing, depending on what I’m doing with the customer, and it’s always doing the data checks. We’re doing that continuous, continuous KYC verification. And the last thing I would point out is the fact that most financial institutions have some type of KYC questionnaire that they have to complete. They have all these questions, and regulators come in and make us change those questionnaires a little bit. It’s always, okay, I go in and change the document. Well, a lot of financial institutions, believe it or not, are actually doing these questionnaires on paper, or via Word, or something along those lines, not built into a system. We actually built it into the system. So now they go in, they complete it, and based on the responses, I know what step needs to be completed next. So it’s again automating that compliance verification and the regulatory requirements.
Got it. Thank you for that, Doug. And obviously, being in compliance is massively important, not just for the sake of compliance, for following the rules, but for fighting financial crimes and elements such as this. But as we have more regulation that’s introduced, like the AML Act of 2020 coming into fruition now, increased sanctions requirements perhaps spawned by some of the global conflicts going on — being able to do this incredibly well, being able to do it consistently, and by consistently, it means alleviating or removing many of the manual processes. So baking it into the systems is a way of helping to literally address compliance processes in a much more effective way. So thank you for the thoughts there. What I’d love to do then is see — because part of what we’ve been talking about is this overarching how to make progress in the year of the digital dichotomy and how to really bring customer experience to commercial and institutional customers. But we’ve been talking about two sides of a coin, if you will, Appian and then Wipro. I’d love it if maybe you guys could talk about: do you have a client success story where you worked together to bring some value and benefit to a client? I appreciate you might have to cite a client anonymously, but we’d love to hear something a bit about what’s being achieved here from a real-life customer.
So, since we are talking regulatory and compliance, and obviously the financial services sector, we’ll take one example of one of the global banks, where we addressed the automation of their entire end-user computing applications. So EUC, end-user computing applications, is nothing but small, small business processes built by business groups, subject matter experts, on Excel. So for example, you are running, say, a forex adjustment. Forex adjustment means you are taking the data from your upstream system, putting it in Excel, and then doing a lot of pivots, VLOOKUPs, filters, etc., and finally creating an output that goes to the downstream system. This entire process, the way it used to be earlier, is entirely manual and is run on trust. But there can be a mistake any time, and if there is a mistake happening — even a single cent or single decimal point changes here and there — the entire financial system will go for a toss. So obviously it’s a regulatory concern. So the bank got a consent order from the regulatory industry. They got a guideline and the dictation that it has to be automated. Calculation cannot be done by a human during the run time. They can tell the calculation, but the actual calculation has to happen in a process. Number one, it has to be traced, audited, and reported. So any such calculation that happens has to be reported back for certain business cases and use case scenarios. What we did with Appian — of course, Appian is a platform for the traceability, auditability, and compliance back-reporting, because that’s a single source of truth. That yes, it happened, along with the recording. And the value we brought in there is that our own IP and accelerator platform, which is built on top of Appian, actually manages those Excel files. It’s kind of an AI/ML-led platform we have built which reads the Excel, reads the input data, and transforms that in real time in the Appian environment, and creates the output for the respective SME to review and approve. So this is an overall story. It’s a short story, but it is very, very important for almost all the banks today, because almost all the banks in the world have this problem in hand. In some cases it’s big, in some it’s small, but eventually this is the area where most of the banks are addressing now from the regulatory and compliance standpoint, Elena.
Absolutely, Sumanta. You bring up a fascinating point, just literally in so many financial institutions around the planet, just how much work is done in Excel and some of the risk that actually exists because of that. So I think it’s a very pertinent and timely example in that regard. But being able to drive some enhanced scrutiny, and again tying back to that theme of enhanced regulatory risk and compliance, is obviously something that is always of immense importance. All right, gentlemen. So I very much enjoyed this conversation, as we’ve spoken today about really how to drive meaningful customer experience beyond retail banking to institutional and commercial customers, despite some of the big market headwinds that are going on out there. But I would love to end us today on a bit of an actionable recommendations note. So I’d love each of you — I’ll give you the question, and then I’ll go to you first, Doug, and then, Sumanta, we’ll have you close this out. Here’s the question: given the digital dichotomy that I started our conversation with today, what recommendation would you make to financial services leaders out there about how to most effectively drive impact in the midst of some of these challenging headwinds? Doug, what would your actionable recommendation be?
Yeah, first and foremost, I would say focus on that customer experience. And when I say focus on the customer experience, it’s from that commercial and institutional customer. We need to make it easy for them. That means we have to be able to automate our processes. We cannot let our internal challenges impact the customer. So finding a system that enables you to automate your processes from A to Z, all the way through that customer experience, and being able to bring all of those systems together — because I think the one thing that is also amiss is the fact that we don’t want to lengthen that onboarding time because we have to access multiple data systems. We have to build the integration so that it is now one system of record and they’re all communicating. Just because we have legacy systems doesn’t mean that we should impact that customer experience. So we really need to focus on that, and we need to focus on the fact that we need to make it very easy for the customer. So that process automation should help us do that, but we need to make sure that we have things set up in a way to say, I’m onboarding this type of account, the customer has this type of account, I need these documents. There shouldn’t be coming back to the customer at a later stage saying I need this document or I need that document. They should know right up front, and they should be able to submit that to me very easily, without having to go through a bunch of hurdles to do so — not having to go through email, or have to submit paper or physical documents. We should be able to do that in a way that allows the customer to have a better user experience. And the last thing that I would also say and recommend is: don’t ever be afraid to evaluate your processes. You need to evaluate those processes on an ongoing basis. You know, Sumanta and the Wipro team do a phenomenal job at looking at processes and saying, hey, you can improve your efficiency here. Evaluate those processes and make sure that, as we enhance those processes and streamline them, we should be able to have a system that is flexible enough to enable us to make changes as we identify opportunities to do so.
Got it. Thank you for that, Doug. Sumanta, I would love to hear from you. How would you complement Doug’s recommendations with some of your own?
It’s almost on similar lines, Elena. What we say, and what we recommend most of the time — and that’s what’s happening — first is, you follow your competition, what they are doing. Most of them, as I said in the very beginning, are going to digital transformation. And if you want to do that, if you want to automate, if you want to streamline, your middle office has to be broken. Your front office, which is the customer engagement apps — whether the customer is on a portal or mobile or email or any other channel or in a call center — when the customer is calling, there should not be any middle office. It should be directly the enterprise, and one orchestration layer has to be there to manage those customer touch points, finally enabling you to reach your back-office enterprise system to give a true customer experience in an agile and faster way. Nobody wants to wait today. That’s the fundamental problem. Everybody’s busy. And if we need to make it faster, it has to be automated. And if you want to automate something, considering the regulatory, security, and customer data in your mind, obviously you need to have something like an Appian platform, along with Wipro, to make that happen.
Yeah, indeed. I’ll share, just based on the recommendations you each just made, I’ll leave our audience with this. In a recent study that HFS put out, looking at all things relevant to the current state of commercial banking, one of the things we found is that on average it takes 33 days to onboard a commercial banking customer. So, Sumanta, you just made the point — everyone that we call it the Amazon effect, or take your pick of rapid digital experience — everyone wants to move fast. Commercial and institutional customers are no different, and that is, in essence, the heart of our conversation today. Sumanta and Doug, it’s been fantastic talking with you today. Thank you for sharing your insights. And on behalf of HFS, thank you for listening to this edition of HFS Unfiltered.
Your account has been created. You can continue exploring free AI insights while you verify your email. Please check your inbox for the verification link to activate full access.
With the exception of our Horizons reports, most of our research is available for free on our website. Sign up for a free account and start realizing the power of insights now.
Our premium subscription gives enterprise clients access to our complete library of proprietary research, direct access to our industry analysts, and other benefits.
Contact us at [email protected] for more information on premium access.