Most of us have experienced the disconnect. There is a strategic plan in place to drive the work that gets done, but the delivery goes off track. In banking, the impact can be felt and seen in the value that customers experience. Being able to measure customer value from all sides and take action on it is difficult, at best. When it happens, it can create magic for customers.
Focus on the customer is typically not the issue, since many banks have that focus. The challenge is how to embed it into the operating structure of the organization. In today’s competitive banking environment, failing to focus on customer value can lead to fewer customers and lower profits. To avoid this outcome, banks can stay ahead of competitors by accelerating their enterprise agility journey and adopting value stream management (VSM) practices.
Evolution of customer value in banking
The shift from personalized service to self-serve banking disintermediated customer loyalty. In the past, customers would walk into a local branch and friendly employees would help them with current needs and future plans. For example, a young customer putting money in a savings account might have plans to invest in the stock market to build wealth, get a credit card for convenience and to build a credit score in order to get a car loan or a mortgage, and so on. Branch managers could literally see the value added by the smiles on the faces of customers.
Those trusted relationships have been replaced by automated experiences, and large banks often fall short when it comes to meeting customer expectations. Scale and reach have increased, but achieving the goals of customer personalization and impact is infrequent and distributed. There is no shortage of things to do or competing priorities keeping banks from delivering customer value. These include economic uncertainty, changing interest rates, regulatory risk management, siloed product lines, and technical debt from legacy systems. With regards to legacy systems, an Accenture survey found that banking executives saw many advantages to migrating from legacy mainframe environments to the cloud, including speed and agility, security, new capabilities for revenue growth, and cost savings.
5 tips for DevOps, IT, and product leaders to unlock customer value
- Speak the same language as leaders on the business side to get support and funding. They may have ideas for products that differentiate your bank from competitors.
- Don’t let ‘orgitecture’ (organizing people around the process) get in your way. Move from being process-centric to holistic, and organize work around customer value.
- Use value stream metrics to identify why software projects are running late, so issues can be remediated as they happen. You don’t want to miss your window of opportunity.
- You don’t have to build everything in-house. SaaS solutions that meet your needs free up developer time for cool stuff that customers will love.
- Use data to find out what customers actually want or need, and be comfortable making pivot or persevere choices based on new data. An app customers want today may be obsolete in six months if a competitor introduces something better.
Adapting to the changing environment
Tech-savvy customers are looking for banks that provide a personalized digital experience together with the products and services they need. Traditional banks are now competing with niche players, like FinTechs, in addition to other banks. Systems and infrastructures that may have been sufficient in the past aren’t keeping pace with the speed of innovation in today’s market. Legacy systems can’t handle current app, API and security features, or process data for cross selling. Business units formed by mergers and acquisitions add to the complexity if each runs its own legacy system. For digital transformation to be successful, technical debt needs to be addressed to avoid instability in the systems and allow for faster-paced change.
Banks need to focus on customer value in software planning and development. To accomplish that, digital and agile transformations offer banks the framework to compete today and into the future. For banks already on their agile transformation journey, value stream management (VSM) supercharges agile environments by aligning people, processes, and data to identify and quickly respond to opportunities, add value to the customer experience, and reduce wasted resources, time, and money.
VSM can provide data that identifies products and services that add value to customers. For example, a secure, frictionless mobile banking app that allows customers to make deposits, payments, and move money between their checking, savings, and credit card accounts in a single session improves the customer experience.
What are the top benefits of VSM for banks?
Banks have to be innovative and responsive to meet or exceed customer expectations for their portfolio of products and identify end-to-end value streams for software development. Customer focus needs to be part of the organization’s operational DNA.
Enterprise agility tools, like Atlassian’s Jira Align, provide banks with a way to connect corporate goals to work being done with real-time data and insights. Employees throughout the bank have a single source of truth and visibility into goals, objectives and key results (OKRs), data, timelines, roadblocks, and value stream metrics (flow velocity, flow time, flow load and flow efficiency). Some organizations uncover systemic issues through VSM. Product ownership may be murky, or the manager responsible for “running” a system may not be responsible for “developing” a new system. Or the customer journey is siloed by product lines, with no one tracking overall customer value across in-person, phone and digital experiences.
Top benefits of VSM include:
- Delighting customers. Respond quickly to customer requests and market changes with relevant data and streamlined processes.
- Increasing visibility. Rather than wondering what is going on in other parts of the organization, data-generated charts and graphics show the connection between IT/DevOps workflow and corporate goals to make sure everyone is aligned.
- Removing bottlenecks. See where processes flow smoothly and where bottlenecks occur. As we saw when the Suez Canal was blocked by a single ship, billions of dollars can be lost while others are stuck waiting for a bottleneck to clear.
- Unleashing innovation. Work on products that actually matter to customers. Endless meetings about unnecessary features or maintaining underperforming products will be a thing of the past.
- Improving morale. It is easier to hire and retain talented IT staff when they are working on interesting, innovative projects.
Getting started with VSM
It is important to have experienced partners like Accenture and Atlassian in place to help with planning and implementation of VSM. In the meantime, step back and look at your enterprise agility capability level, infrastructure, staffing, data sources, tools, processes, and funding. And perhaps most importantly, look at how customer value is currently being defined, measured, and tracked.
Eliminating waste is part of VSM. Work with your team to identify areas where time, money or other resources are wasted across the organization and where you can inject more capacity for innovation. Maybe there are corporate silos that cause teams to keep reinventing the wheel or missing functionality on apps that force IT employees to spend most of their time making manual changes to systems that could be automated.
Streamlining operations, reducing waste, and delighting customers are all part of the same value stream management goal for banks. Measuring the value your bank brings to customers requires connecting the dots through real-time data and analysis. Let the magic begin!
Want to know more about VSM? Check out our webinar: Secrets of Value Stream Thinking.
Interested in learning more about the Atlassian-Accenture partnership? Read our blog: Atlassian and Accenture are teaming up