The better the question
How can banks finally catch up to customers’ digital expectations?
Despite technological advances, some banks are struggling to meet and implement their customers’ digital requirements.
Customers’ lifestyle habits are increasingly motivated and directed by the speed and simplicity of online services; the same is true of how they want to bank.
Today, people expect instant access to online banking services that can help ensure they don’t miss out on life-changing moments or ways to improve their living standards.
EY proprietary research on consumer banking trends in Central and Eastern Europe found that 77% of people use a desktop or laptop to bank, 55% of respondents feel more comfortable using online-only financial providers than they used to, and 84% look to the internet first when looking for new products.
Bank customers want digital38%
of clients would change their FS provider for better digital services.
The shifting trends in this region mirror how most customers feel globally. However, parts of the industry are embracing and adjusting to this transition at different paces.
The challenge of coping with swift technological change, along with the laborious overhaul of processes, is a source of concern and frustration for all. Harder still is the urgent – and ongoing – need to implement nimble digital solutions that will serve customers effectively, not only during this transition, but for the long-term.
Customer expectations are not static and will continue to evolve with people counting on their bank to cater for them every step of the way, from mobile-first offerings and the secure handling of sensitive data, to swift and seamless processes.
Because of the complexity of this challenge, financial organizations that want to develop new services often need the expertise of external partners to both assess what needs to be improved on and the right approach for best meeting the needs of customers, regulators and stakeholders.
In recognizing the need for such change, one large Central European bank approached EY professionals to help it build out a digital-first, end-to-end process for unsecured customer loans. The bank’s legacy system involved a long and complex offline lending process that usually required in-person visits to the bank to complete a loan application.
One of the bank’s main aims was to gain new-to-bank and new-to-market customers in real-time, and a higher approval rate, than when using its traditional lending methods.
Additionally, it wanted to credit the loan to the customer’s account within minutes after approval, while building the solution in a user-friendly way and making sure it is compliant with regulatory requirements – comprising anti-money laundering (AML) or know your customer (KYC) processes and distant contract signatures.
The EY team in the Czech Republic set about designing a stand-alone market solution that could be developed and deployed to the bank within six months.
The better the answer
Making it easier for banks to deploy cutting-edge tech
Digital transformation has already changed how people live. Banking is next.
Pulling in the right people from across the EY organization to combine banking, technology, business, credit risk and regulatory knowledge expertise, the team worked to identify an effective solution to the core challenge facing the bank.
Together, the team worked to build a mobile-first, AI-enabled digital platform to enhance the bank’s lending processes. The technology underpinning the platform allowed the EY team to build out a full set of digital processes including identification, innovative credit scoring, antifraud and an electronic-signature system. The result: Impresto.
We wanted to push the boundaries for the bank and create a transformative solution whereby the customer could receive a loan in 15 minutes.
Impresto in action
EY teams set about implementing the Impresto platform, in cooperation with its IT collaborator, TRASK by:
- Developing a robust underwriting mechanism, including innovative scoring approaches and thorough anti-fraud controls
- Complying with both Czech and European Union regulations
- Designing the online processes and follow-up activities
- Implementing, testing, and deploying the solution into production
- Involving EY teams in IT advisory, regulations, credit risk and customer/business advisory
Once implemented, the new digital process was deployed within six months with a time-to-money average of 30 minutes. The inclusion of rapid feedback loops and prototyping also helped boost customer engagement, as well as increase the bank’s understanding of its customers’ preferences to allow further improvement of its services.
The bank succeeded in completing hundreds of sales within the first three months and confirmed its appeal for new-to-bank customers.
For the EY team, their journey with the bank had resulted in a discovery of a digital-first way to service banks, looking to improve their systems and processes to match their customers’ expectations.
An adaptive solution to meet rapidly evolving needs
One of the biggest advantages of the Impresto platform is its ability to work outside any bank’s technological architecture, keeping integration requirements to a bare minimum. As it was first developed as a mobile-first digital platform, it can either be implemented through the cloud or on-site, with fewer hardware constraints than many legacy tech solutions.
Impresto is designed to work with banks to help produce a variety of digital products and processes for both credit and deposit services. With the ability to transform each stage of the customer journey, the platform can be used as an entire unit or through individual modules for key parts of the customer onboarding process, with an API designed for ease of integration with other systems for maximum flexibility.
Crucially, the platform’s use of a real-time scoring engine, AML checks, and the development of an e-signature helps it satisfy regulatory requirements.
A tailor-made approach from a flexible platform
EY teams work with banks that want to use Impresto generally spans a six-month period. During this time, EY teams will conduct an initial feasibility check which includes:
- High-level regulatory assessment
- Communication with regulators
- Target process outline and minimum viability product definition
- IT feasibly and IT architecture
Once this first stage is completed, the teams turn to analysis and customization, which involves:
- Business process design dependent on regulatory requirements
- UW process design
- Stakeholder alignment
- Process mock-up preparation and client tests
Finally, the team begins the implementation and test phase, which covers:
- Overall regulatory support
- Agreement on the database object model
- Delivery and testing of the proposed solution
- Assistance in preparation of the sales strategy
- Obtaining the client’s business alignment
Should the bank require further support, EY teams can provide post-implementation assistance.
The better the world works
Empowering banks to succeed in a digital age
Impresto helps banks adapt to meet customers’ digital expectations, while helping to grow revenue with an advanced digital solution.
Overall, the Impresto platform offers valuable proof that it is possible to satisfy seemingly contradictory demands for digital speed and safety while propelling easier access to finance – without compromising on due diligence or compliance.
The EY Impresto platform’s benefits can be divided into four main categories: business, regulatory, risk/scoring, and IT.
Its business advantages include:
- Customized market analysis and understanding
- Decreased onboarding times
- Lower overhead costs
The EY teams’ deep understanding of regulatory requirement result in:
- Regulatory compliance with international and local rules on AML, consumer credit, consumer protection, and electronic signatures
- Various ways of reliable client identification
Its risk/scoring knowledge brings about:
- Design and development of robust underwriting mechanisms with thorough anti-fraud controls suitable for online processes
- Secure data transfer and storage
- The ability to assess new-to-bank as well as new-to-market customers
Fundamental to its successful application is its IT capability:
- A fully developed IT architecture
- Deployment of innovative technologies
- Reusability of individual modules for future projects via application programming interfaces (APIs)
The success of the Impresto platform and its positive impact on customer experience has earned it notable recognition with its initial implementation named as “global gold standard” by a major management consultancy.
Banks that wish to compete for customer loyalty and satisfaction in today’s transformative age need to ensure that, first and foremost, they can meet expectations. Yet, with these expectations continually shifting, banks need to ensure they not only put their customers at the heart of what they do but also develop systems and processes to enable them to move effectively and at speed when adapting to meet demand.
Having a flexible, adaptable digital foundation is increasingly essential in this fast-paced, digital age. In Impresto, the EY organization and the financial services sector now have one.
Pavel Riegger - Partner and Head of Advisory Services in Central Europe
Jakub Hytka – Senior Manager, Impresto Leader
Pavel Doležel – Manger, Credit Risk Modeling
Petr Brabec - Associate Partner, IT Advisory