Digital Banking 2021: Tech Talks 2

Steve Moroski, Senior Vice President, Financial Services, Celonis; Farouk Ferchichi, Chief Data & Analytics Officer, Envestnet

Transcription:

00:00:06:09 - 00:00:30:15
Steve Moroski

It's no secret that banks are investing billions of dollars in it every year. Gartner even estimates that by 2020 over $700 billion will have been invested in an effort to create value for their customers and compete in an increasingly digitized world. ServiceNow CEO Bill McDermott recently shared that in the past three years, $3 trillion has been invested in digital transformation.

00:00:30:29 - 00:01:02:17
Steve Moroski

Yet only one in five companies are seeing the ROI. Gartner … will tell you that projects are overdue and over-budget. Executives … are not shy about sharing their disappointment and frustration, with 44% of leaders stating the digital transformation initiatives have been a complete waste of time. The entire reason to digitize these processes was to deliver and drive better business execution.

00:01:02:28 - 00:01:30:07
Steve Moroski

But that's not what's happening. Peel back the onion here. The hard truth is that in an effort to digitize and simplify our processes, we have introduced a significant amount of complexity. Think about this. Every new technology brought into a bank is expected to interact with dozens of other existing technologies and legacy processes.

00:01:31:04 - 00:01:58:11
Steve Moroski

These legacy processes and systems, however, can't handle the complexity and speed of today's business climate. In essence, we set up our technologies and our processes to fail. And unfortunately, none of this is new. The result is a gap between a company's aspiration, their intentions, goals and business objectives, and what is actually achieved in reality. Before we move forward, let me pause to introduce myself.

00:01:58:19 - 00:02:35:24
Steve Moroski

I'm Steve Moroski, senior vice president and head of Celonis North American Financial Services Business. For our time today, I'd like to dive into the know-your-customer, or KYC, process. This process follows hundreds of different paths, and more often than not, requires manual rework to lead support processing times and has a massive impact on the customer experience.

00:02:36:11 - 00:03:01:11
Steve Moroski

All of this ultimately impacts revenue and growth. But what if you have a way of preventing the manual rework issues before they even happened? What if you can identify the execution gap in your processing time and automate the action to improve just how could it be true? It's not. And let me set a scene for you to identify the root cause of a process issue.

00:03:01:12 - 00:03:28:21
Steve Moroski

We first need to discuss how the processes are actually performing across systems and departments, while all the variations to a process like KYC are many. We want to find out where and when these variations are happening and why they're occurring. In comes a digital X-ray of your processes powered by Celonis. It's a way for you to actually see and measure what's happening in real time.

00:03:29:12 - 00:03:58:09
Steve Moroski

Let's take know-your-customer again, or KYC. In this process, you want to discover where and how KYC analysts are spending their time, how often clients are getting asked the same information and how efficiently workload is being distributed among your various KYC teams. Once you see this level of process transparency, you can benchmark processes and variations against defined targets and track process execution to detect issues before they arise.

00:03:59:03 - 00:04:22:26
Steve Moroski

Let's dig into the poor processing times that we mentioned a bit earlier, because you now have a real-time digital X-ray of your process. You can now isolate which process inefficiencies are having the largest impact on your processing time. Imagine this with a single click of a button. You can see that the largest process gap happens to be in quality-check failures.

00:04:23:15 - 00:04:54:26
Steve Moroski

You see immediately that the average processing time almost doubles. … When you take your step further, though, you see that this continuously is happening in a particular industry, forming life sciences organizations that are looking to take advantage of your receivable solutions.

00:04:55:12 - 00:05:18:05
Steve Moroski

Now, that's just one scenario of potentially hundreds. And why does all this matter? Imagine this is your bank's first or second interaction with a large pharma company. Mitigating risk is your top priority. But if you take far longer than expected and the client’s unhappy with your bank's performance, they may go elsewhere for other banking products and potentially bring the business elsewhere after a couple of years.

00:05:18:29 - 00:05:54:06
Steve Moroski

Now, this is great insight into historic execution challenges, and you can take this information and make targeted improvements to the processes that will have a large impact today. An example would be informing all analysts about future requests, performing life sciences through enhanced due diligence right away. It's important, however, that you're not only able to make targeted improvements to the process, but that you're able to proactively take action before this thing snowballs into a customer experience issue that leads to loss of business or customer trust.

00:05:55:10 - 00:06:38:08
Steve Moroski

The final piece of the puzzle is seeking an automated action for processing improvement, using an intelligent business where you can detect scenarios where a course correction is needed and either proactively communicate with a business specialist or execute. Imagine any of your enterprise systems. Let's continue our story of quality-check failures, where requests need to go through a second round of due diligence as you're listening to patterns in your systems. You can identify when a request is routed to basic due diligence, and if this is the right process route based on historical behavior … either automatically reroute the request to the appropriate queue or send an alert to the KYC analyst or team lead to reconsider before

00:06:38:08 - 00:07:07:14
Steve Moroski

moving forward. Imagine having this type of process to prove the power at your fingertips. So let's go back to where we started. I hope you can see how taking a 50-year-old mainframe, some client server apps from the ’80s, your multicloud solutions, both public and private, and translating that into a modernized system is simply not possible. And it has a major effect on a bank's business execution. With Celonis in place,

00:07:07:25 - 00:07:42:13
Steve Moroski

you'll have continuous improvement baked into your processes and the ability to monitor and optimize your operations in real time. … This is the new state of business execution. To find out more, Celonis invites you to attend our weekly X-Ray Wednesday demo series. …

00:07:42:28 - 00:07:44:10
Steve Moroski

Thank you very much for your time.

00:08:02:25 - 00:08:29:02
Farouk Ferchichi

Hello everyone. My name is Farouk and I'm Envestnet’s chief data analytics officer. I'd like to talk to data and AI, emerging trends that I see and think every financial institution should consider … to deliver a differentiating digital experiences to their customers. One is embedded advice in all aspects of the customer

00:08:29:02 - 00:09:04:06
Farouk Ferchichi

digital experience and two is humanizing that same advice throughout all phases of the customer digital experience. Before I go deeper into financial services and talk about embedded advice and humanizing digital experiences, and how that's applicable in financial services, I wanted to share a little about what other companies in different industries are making this leap. Whether we as consumers know or are conscious of it, data, insights and artificial intelligence are impacting nearly everything we do in life.

00:09:04:24 - 00:09:31:14
Farouk Ferchichi

You may be surprised at where … embedded advice in our daily life is happening. Take our cars, for example, our trusted vehicles that get us from point A to point B and back again. They are much smarter than we think, and they're learning more about us with every drive we take. Imagine you're driving down the road and … your automatic wiper blades come on.

00:09:31:23 - 00:10:05:20
Farouk Ferchichi

Along with the sensors on your windshield, your car has temperature and barometer sensors. The data from those sensors are shared with the National Oceanic and Atmospheric Administration, which uses all that data to understand micro-localized weather. Turns out, using that data from car sensors is way less expensive than building weather stations. Big picture, though, if we step from all of it and with all the sensors in the car, like car proximity sensor, your drive becomes a valuable tip to you and everyone else

00:10:05:27 - 00:10:41:09
Farouk Ferchichi

on the road. Your car becomes a guide to you and others, helping you be safer and helping you reduce mental stress. Now let's get back to financial services. And while we recognize that we made a lot of progress on improving the digital user experience … what we ultimately want is to turn all those advancements into something that can compliantly and intelligently guide the customer through their various steps down their financial digital experiences.

00:10:41:09 - 00:11:10:00
Farouk Ferchichi

Journey embedded finance is a great place to start, particularly in the areas of consumer digital financial wellness experience. As we see, data- and artificial intelligence-driven advice in the form of micro plan or goal setting, micro-savings suggestions and/or even investing suggestions are critical to guiding consumers to having better access to professional services and ultimately optimizing their financial wellness journey.

00:11:10:14 - 00:11:50:07
Farouk Ferchichi

That's precisely why we at Envestnet acquired a startup company called Harvest to be to be able to combine our data analytics and domain expertise with their capabilities to build personalized and targeted data- and AI-driven micro goals, micro savings and micro investing, digital experiences that financial institutions can adopt to accelerate their embedded digital advice initiatives. However, delivering personalized micro financial wellness services through embedded advice in the financial digital experience of consumers is a huge leap forward.

00:11:50:28 - 00:12:23:20
Farouk Ferchichi

… This is about balancing what we deliver with how we deliver it. In other words, we want to take the best human interaction via traditional contact centers … led by expert human agents, and replicate as much of those human interactions via the digital channels.

00:12:24:14 - 00:13:00:27
Farouk Ferchichi

An area of emerging sense and research is psychometric analytics that we find valuable to accelerate this humanization strategy. … That's why at Envestnet we are investing heavily in building a market-leading recommendation engine for the wealth management industry, combining the expertise of our advisors with the tech- and data- and AI-driven digital services that can help them deliver relevant, timely and differentiating consumer experiences.

00:13:01:16 - 00:13:32:16
Farouk Ferchichi

And evidence of that is our current tax overlay initiative, which is a perfect example of how we are utilizing a recommendation engine to deliver near-real-time value to our advisors and their customers. I would love to continue this chat with you, so please don't hesitate to reach out. …

00:13:32:29 - 00:13:38:13
Farouk Ferchichi

We are active on Twitter and LinkedIn. Thank you all for your time and enjoy the conference.