business capability accelerators -...
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Business Capability AcceleratorsCore Componentization
April 2017Marvin Foest & Guy Hammon, FIS VPs Solution Architecture
The Financial Services Industry
2
Competitors
CONFLUENCE
OF FORCES
Information
Security
Digital
Expectations
Regulatory
Change
Technology
will be squeezed out of banks by
regulators by the end of 20161$295BILLION
Since 2009, the 10 largest U.S.
banks have more assets than all
other U.S. lenders combined510
of banks worldwide will begin
replacing legacy systems with
third-party platform
technologies to increase
efficiencies4
60%
of millennials prefer to have a
digital relationship with a
CU/bank3
73%
data breaches globally by 2019
driven by the rapid digitization
of consumers’ lives and
enterprise records2
2.1TRILLION
CIOs face multiple transformation challenges
3
Changes in customer and market behavior is compelling banks to transform
Changing Customer Experience• Digital expectations of a fully integrated digital experience
• Millennials expect personalized interaction, rewards for loyalty
• Social network impacts
Siloed Legacy Systems• Decrease time-to-market
• Simplify integration
• Evolve to customer-
centric approach
Tighter Economics• Drive to less expensive infrastructure
• Rapid Solution Integration
• Increased Automation
• Operating cost challenges
Innovation• Big Data
• Machine learning
• Cloud computing
• Open service architectures
Evolving Regulatory
Environment• Complex cross-border
issues
• PSD2, Open API
mandates
• Basel IIII
• Impending Market
Reforms
Unconventional
competitive forces• Peer-to-Peer Lenders
• Cryptocurrency
emergence
• Non-banks providing
banking services (e.g.,
Retail providers, payday
lenders)
The CIO Imperative: Grow – Run – Connect
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A modern platform must support and accelerate these three key business outcomes
GROWLeverage a powerful
combination of advanced
customer centered
analytics, flexible cross
product promotional
pricing, and advanced
digital segmentation and
delivery technologies.
CONNECT
RUNDrive operational
efficiency via analytics
based automation, real-
time processing
capabilities, and cost
effective infrastructure
based on open source,
cloud enabled
architecture alternatives.
Enable faster
time-to-market and
simpler integration via a Java
based API architecture that simplifies both
legacy integration and the rapid
deployment of new innovative Fintech
solutions.
5
How do you engage
consumers and create a
market of one in a digital
world?
How do you leverage the
next wave of digital
analytics & capabilities
to build stronger client
relationships?
6
Why Customer Personalization & Enablement?
Fully engaged banking customers
also have more products with their
bank, from checking and savings
accounts to mortgages and auto
loans. Plus, they have higher deposit
balances in their accounts than less
engaged customers with the same
products do”
“In the retail banking industry,
customers who are fully engaged bring
37%more annual revenue
to their primary bank than do customers
who are actively disengaged.
(FIS Pace Index – 2015)
Common Modernization Focus Areas
Example focus areas:
• Regulatory compliance and fraud mitigation
will continue to be “High Priority” and impact
every IT decision a financial institution makes
• Product Bundling and Dynamic Pricing based
on customer relationship with the bank
• Better utilizing analytics to understand and
predict customer needs and identify profitable
customers and branch inefficiencies
• Offering customers easier access to real-
time, actionable information/data
• Building multi-country strategies with a single
platform and user experience, regardless of
location
Each bank will modernize and evolve their
banking capabilities with a sequence and
timeframe aligned their business and
technology drivers and their capacity to
absorb and implement change into their
environment.
Banking Modernization
1.Digitally Enable Core – Open Integration
Framework
2.Extend Business Capabilities with Enterprise
Business Components
3.Enable Customer Relationship Centricity
4.Customer Active Analytics - Digital Banking
Integration
5. Improve Operational Model & Process
Rationalization
We are seeing clients express a strong preference for an incremental modernization approach which “hollows out” the core platform over time vs accruing the risk of any big bang type of program.
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Key Pillars of FIS’ Banking Modernization
Enriched Customer ChannelsTouchpoints enabled by digital and mobile, allows credit
unions to gather data beyond spend and provide greater
insights to businesses and members
Customer Active AnalyticsImproving data analytics to pinpoint member spending
habits and locations to deliver ‘wow’ moments
Rapid and Innovative Banking
ProductsDevelop new teams focused on using new technologies
to build new products and killer apps for your members
Commitment to SecurityCredit unions need to proactively address members’
security concerns to improve their technology adoption
and trust
ENTERPRISE
CUSTOMER
CENTRICITY
• Enterprise Customer Management
• Retail
• Corporate
• Commercial
• Affinity groups
NEXTGEN CORE
REAL-TIME
TRANSACTION
ENGINE
• Next Gen Deposits & Lending Core
• Real-time, straight-through processing
• Reconciliation elimination
• 99.999% availability 24/7/365
• Multiple Line of Business models
OPEN APIs
• Open Systematics Banking Framework
• Digital API for integration to FIS Core and
ancillary systems
• Seamless orchestration with straight-through
and real-time processing
ENABLE
ENTERPRISE
COMPONENTIZATION
• Enterprise Product & Pricing
• Limits and Collateral
Management
• Customer relationship-centric
banking
• Revenue Leakage Management
CUSTOMER
ACTIVE
ANALYTICS
• FIS Pinpoint Marketing
• FIS Pinpoint Offers
• Relationship Analytics
Customer Experience Suite
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FIS’ Banking ModernizationBanking modernization is critical to next-generation integration strategy
Key
Attributes
Analytics-
driven,
Customer
centric core
design
Enables a
personal,
intuitive
Customer
experience
Real-time, highly
efficient
transaction
processing
Secure, highly
scalable open
banking platform
Provides a 360-
degree view of all
interactions, and
fully integrated with
advanced member
and pricing
analytics
Every function
needed to deliver a
personalized user
experience is
exposed by an easy-
to-use API gateway
System designed
from the ground-up
to process
transactions cost-
effectively,
improving
profitability
Built using the latest
JAVA, security, and
database
technologies, a truly
modern and cost-
effective platform
Advanced
Business
and
Technical
Platform
CUSTOMER RELATIONSHIP-CENTRIC TRANSFORMATION
• Flexible business flows and definitions: Rules-based Enterprise Product Factory
and Pricing Engine simplifies flexible product creation and innovation in product and
promotional pricing.
• Functionally Rich and Extensible: Already rich out of the box, the system is
designed to easily extend the framework with additional capabilities
• Simplified Integration: Provides an extensive API Gateway, which exposes all
functions to allow for rapid integration into a client’s existing environment
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Enterprise Layer
360 degree customer
information, and analytics driven
payments, product, pricing, and
marketing functions.
Channel Layer
A true omni-channel, socially
integrated digital customer experience
Processing Layer
Flexible, scalable, configuration
driven product processing engines
Digital One
FIS API Gateway
Processing Layer
Enterprise Customer
FIS Product & Pricing
Pinpoint Marketing
Payments
FIS Open
Payments
Framework
Analytics
FIS Active
Analytics
Omni-Channel Connect
BankerConsumerTellerKiosk
Arrangement
Processing
GFI Product
Processors
Corporate
Systems
Customer Experience
FIS API Gateway
FIS Component Banking Architecture
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Enable Up-sell and Cross-sell1
Enable Relationship Banking2
Dynamic Packages and Dynamic
Pricing3
Advanced Relationship Up-sell
and Cross-sell4
Each phase incrementally builds upon
previous phase for business capabilities
Modernization PrioritizedPhased approach based on business value realized
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Life Event Banking
Dynamic,
Relationship-based
Pricing
Life Event Driven
Predictive
Marketing
360 Customer
View
Rapid, Agile
Product Bundling
Capabilities
The suite uses your own data to optimize the customer experience, strengthening engagement and
loyalty and driving organic revenue and profit growth.
The suite leverages advanced analytics to digitally predict client life events, understand relationship
value, and deliver the right product, at the right price, at the right time, via the right channel to each and
every client.
All supported by advanced data analytics and “market-of-one” functionality.
FIS Enterprise Foundational Business Components
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Value Benefits
Enterprise Customer• Drive Customer Relationship Centricity• Enable Seamless Customer Digital Experience• Improve Sales & Services through holistic & complete view• Achieve Customer Information Integrity & Quality
Enterprise Product & Pricing• Improved velocity to market with single source for
Products/Bundles across broader cross-LOB spectrum• Enriched Customer engagement with relationship-
based dynamic pricing• 100% Clarity with full rate & fee transparency
Predictive Marketing• Targeted Offers based on Life Events• Intelligent Campaign timing/execution via “Always-
On”• Right Offer to Right Customer at the Right Time within
the Right Place• Real-Time Campaign Success Monitoring/Reporting
API Gateway• Open Access to Capabilities across FIS breadth & depth of
solutions and services.• Developer Portal and Managed Access allows for
Monetization within a Co-Pete vs Compete strategy with digital innovators
FIS Enterprise Extended Business Components
14
Value Benefits
Collateral & Limits• Manage risk exposure across all LOBs and customer base• Track and manage covenants and conditions
Preference & Alert Management• Centralize & Unify all Customer Preferences & Alert Configurations• Externalize business logic from disparate channels & LOBs
Tax & Regulatory Reporting• Improve Data Management• Enable efficiency for ongoing Regulatory & Tax
Compliance Maintenance
Identity Access & Business Process Management• Centralize Identity Access Management with Digital Solution• Leverage Pre-Integration Layer to new & innovative
Authentication technology• Improve complex service orchestration
Digital One• Achieve Omni-Channel Customer Experience & Interaction in a
single assisted & un-assisted channel platform• Consume & Leverage FIS Core Component Capabilities (i.e.
Targeted Offers, Dynamic Relationship-Pricing, Alert & Preference Management Registration/Configuration)
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FIS™ CUSTOMER EXPERIENCE SUITE USES YOUR OWN DATA TO
OPTIMIZE THE CUSTOMER EXPERIENCE, STRENGTHENING CLIENT
ENGAGEMENT AND LOYALTY, AND DRIVING ORGANIC REVENUE AND
PROFIT GROWTH.
1. Build Digital Relationships by Better Understanding Your Customer
Leverage the integrated 360 degree view of customer relationships across
all channels and lines of business.
2. Expand your Relationship by Increasing Product Ownership and
Product Usage
Utilize relationship pricing and dynamic bundling to build attractive offers
3. Digitally Driven Life Event Marketing
Leverage predictive analytics to segment your audience and present
relevant offers which match your client’s financial needs and lifestyle
choices.
A True “Market of One” Client Experience
FIS Customer Experience SuiteA True “Market of One” Client Experience
FIS Customer Experience SuiteA Business Capability Accelerant and Core Modernization Journey
Customer relationship-centric banking
Enriched customer experience based on key life events with targeted needsIncreased customer service capabilities
Improved product agility and speed to market
Reduced business and technological complexity
Customer Experience Suite
Enterprise Customer providing an integrated 360 degree view of customer relationships across all channels and lines of business.
Customer Predictive AnalyticsFIS PinPoint Marketing Utilize real-time analytics to predict customers’ “life events”, and provides automated and targeted offers across all channels and the open Internet.
Deepen and expand customer relationships at key life event milestones by identifying customer needs.
Enterprise Product & Pricing provides the bank with product pricing that is based on the customers relationship with full transparency of fees and waivers.
Focus on early wins including enhanced customer experience
Extend a more personal engagement with customers even through self service channels
Make inroads into predictive Customer Life Events
Reduce costs and improve operational efficiency
Incremental modernization around a robust core
OBJECTIVES SOLUTION BENEFITS
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FIS API Platform
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Value Benefits
Open APIs
Fully Digital-enabled Core
• Robust and Extendable API framework supporting API Gateways,
SOA and ESB, and Business Process Management
• Packaged SDK allows rapid, agile development of new APIs
• Support REST/JSON and SOAP/XML APIs
• Various levels of business granularity
• Ready to participate in AI platforms
• Highly Available
• SDK included
Mediator Policies
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Enterprise Customer
What is Enterprise Customer?
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FIS Enterprise Customer is a key component of FIS’s Core Modernization
Strategy, providing financial institutions with comprehensive customer
information management across lines of businesses.
It is an operational customer data management solution that delivers real-time
information about customers and prospects.
FIS Enterprise Customer allows organizations to communicate a consistent
and complete view of customer relationships to internal agents as well as
customer facing channels.
Enterprise Customer
21
22
Pinpoint Marketing
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A Comprehensive End-to-End Marketing Solution
Key Lifestyle Indicators (KLIs)
The DNA Powering the Next Generation of Banking
KLI Categories:
• Product KLI
• Transactional KLIs
• Predictive KLIs
• Competitive KLIs
• Intent KLIs
• Demographic and Geographic KLIs
• Control Group KLIsThis is Katie and the
set of KLIs currently
assigned to her. As
new data is received
about Katie, her KLI
mix will update
K
LI
9
2
K
LI
5
4
K
LI
6
1
K
LI
2
8K
LI
4
2
K
LI
7
9
K
LI
8
6
K
LI
9
9
K
LI
2
9
K
LI
6
4
K
LI
2
7
K
LI
2
7
24
25
Pinpoint Marketing combines the complex functions of predictive
analytics, campaign management, multi-channel message delivery and
campaign reporting into one easy-to-use solution.
An Integrated, End-to-End Solution
FIS Pinpoint Marketing = Responsible Marketing
SECURELY ACTIVATES
ANONYMOUS DATA (NO PII)
REAL-TIME & PREDICTIVE
CUSTOMER ANALYTICS
RELEVANT & TIMELY
MESSAGES ACROSS CHANNELS
RECORDS THE “5 W’S” OF
EVERY INTERACTION
KLI KLI
KLI
26
Criteria of “Responsible Marketing”
Ensure you have a strong Offense and Defense
1. Remove liabilities from the equation
– Utilize solutions that do not require Personally Identifiable Information (PII) to deliver
relevance and personalization
2. Develop offers based on real-time data analytics & machine learning
– Ensure you are selling products and services that are relevant and meet “customer
demand”
3. Record Cross-Sell and Up-Sell Activity
– Track the “Who, What, Where, When and Why” of every offer
Increase Financial Wellness & Responsible Cross-Sell: Immediate
opportunities exist to target consumers and businesses with messages that can increase their
financial well-being and align customers with optimal products and packages to create a
stickier relationship
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PPM Case Study
The Bank began delivering 26
KLI-targeted cross-sell campaign
to customers on their public
website, online banking site
(OLB), and the Open Internet for
the following products and
services.
28,508,156 KLI-Targeted Impressions Delivered
3,164 Product Conversions Attributed
$111,266,340 Face Value Generated1
3675 : 1 Impression Efficiency Rate achieved2
5.25% Conversion Rate achieved3
Here are the results:
Business
Checking
Accounts
Certificate
of Deposit
Accounts
Consumer
Checking
Accounts
First
Mortgage
Loans
HELOC
Loan
Utilization
Money
Market
Accounts
Online
Banking
Second
Mortgage
Loans
Various
Service
Products
1Face Value: Value of all the aggregated products opened tied to a specific campaign2Impression Efficiency Rate: The average number of KLI-targeted impressions served to influence one conversion
3Conversion Rate: The percentage of unique individuals who were served a KLI-targeted impression and took the desired action
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Encouraging Product Utilization and Behavior Change with Personalization
HELOC Utilization Campaign Results
71,606KLI-Targeted
Impressions Delivered
1,834Unique Customers
Engaged
554HELOC Lines Drawn
$37,348,040Face Value Generated1
129:1Impression Efficiency
Rate achieved2
30.2%Conversion Rate achieved3
1Face Value: Value of all the aggregated products opened tied to a specific campaign2Impression Efficiency Rate: The average number of KLI-targeted impressions served to influence one conversion
3Conversion Rate: The percentage of unique individuals who were served a KLI-targeted impression and took the desired action
29
Second Mortgage Campaign Results
The Open Internet Drives Dramatic Results
29
Ability to engage with customers
up to 5x more than on owned
digital properties.
397% increase in cross-sell conversions
after adding the Open Internet
73% of sales were influenced by the
Open Internet
38%Open Internet
Channel
35%Both Channels
27%Banks's Public
Website & OLB
30
Enterprise Product & Pricing
Enterprise Product & Pricing
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Integrated Suite
Enterprise Product Catalog & Bundling
Pricing Rules, Policies, Structures & Calculation Engine
Relationship Analytics, Customer Relationship Score & Reporting
Product/Bundle/Pricing Simulations
Enterprise Product & Pricing
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Innovative Capabilities
Centralized product management A single repository product repository Tailor product attributes to customer needs Product suitability/eligibility Product bundling Product history/lifecycle management Self-serve product selection
Relationship pricing and pricing governance Standard and exception pricing – Products, bundles,
individual customers and segments Manage fee waivers and refunds Ongoing pricing changes Rate management Promotional pricing campaigns
Offer Management - What-if simulation and analysis Pre-test impact of price changes on revenues and
profitability across client relationship Store past simulations for future comparison
Offer management Create accurate, profitable proposals/offers Tailor offers to specific segments Integrate with customer-facing channels
Bank-wide loyalty programs Create multi-product loyalty programs across the
entire customer relationship Allow customer to choose their own benefits and
redeem online Allocate costs to respective business units
Predictive analytics Relationship analytics and offer curation Loyalty analytics: Customer Engagement Score and
behaviour-based segmentation
Automated, consolidated billing Combine billing into one invoice/statement Customize billing hierarchies and preferences to suit
customers’ needs Communicate the value of the relationship
EPP – Relationship Analytics
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Customer Relationship Score
Product
Ownership &
Balance
Movement
Transaction
Volume &
Patterns
Customer
Relationship
Score
Customer
Interaction
Experience &
Opportunity
Length and
Breadth of
Relationship
>750
550-750
350-550
150-350
Best in Class
Relationship
Strong Relationship
Moderate Relationship
Weak Relationship
*The higher the score, the stronger the relationship
Use the CRS to develop a differential
strategy for pricing, retention, experience,
and product penetration
Customer Relationship Score is fully
configurable by a financial institution
Precisely measure quality and strength of the customer
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Core Modernization Caselet
Major N.A. Global FI
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Modernization through a component strategy
A business enablement output based plan/proposal to modernize the current core banking platform.
Incremental modernization in
phases that provide continuous
capability delivery over the next
3-4 years in multiple releases
starting in 2016
A Next Gen & Digital First solution will further drive additional efficiencies of scale, leveraging common products, platforms, and processes while improving agilityand business value.
OBJECTIVES SOLUTIONS BENEFITS
Focus on early wins including incremental business revenue through cross sell and upsell
Reduce costs and improve operational efficiency
Extend cross sell to self service channels
Make inroads into Customer Lifetime Journey
FIS solution offering includes:
• Assist in the definition and planning of the Next Gen solution scope and requirements (EC EPP, PPM)
• Deploy foundational components to enhance Up-sell and Cross-sell capabilities. • Enterprise Customer• Enterprise Product and Pricing• PinPoint Marketing
• Provide overall program management across sprint delivery of phased incremental modernization
• Deliver a series of foundational core capabilities through SDT (Solution Design Test) and BTC (Build Test Certify) sprints.
Enriched Customer Experience via Key Life Events and Targeted Needs
Customer Relationship Centric Banking
Reduced Business and Technological Complexity
Increased Customer Service Capabilities
Improved Product Agility and Speed to Market
