In Part I of this post I talked about how RIAs and web services offer an opportunity for financial institutions to integrate online banking, electronic billing and payment, and value-added services such as graphical tools and cash flow forecasting, into an end-to-end solution. Reusable interface components in the RIAs can be built once and shared across channels to increase upsell of add-on services, reduce training / support costs, simplify regulatory compliance, and save as much as 85% in application front-end development cycles.
The opportunities for banks, insurance providers, investment firms, and other financial institutions become even more interesting when you add SaaS into the mix.
Software-as-a-Service (SaaS)
“Banking 2.0” is of course, broader than just using RIA technology to create compelling and addictive user experiences. Banks are in a unique position to offer their corporate, small and medium business (SMB) customer a range of integrated business services. Customers may not naturally think of their bank as an innovative and cost saving software provider, but Internet banking already has good market penetration and banks have the potential to be a SaaS provider of choice for other business services. Banks are already trusted for security and reliability and can use SaaS to deepen their relationships with SMB and enterprise departmental groups. Boston AMI-Partners find that the services desired most by SMB include banking/finance, instant messaging and payroll processing applications, and human resources management.
SaaS and managed services aren’t a new concept in banking. Aite Group, estimates that 60 percent of community banks deploy a majority of their internal IT applications through SaaS including expense reporting, travel booking, payroll, PR services, and recruiting. For external facing applications such as consumer lending and loan processing, many savings and loans rely on the infrastructure and services from larger banks.
The movement now is for financial institutions to use RIAs and SaaS to offer their corporate and SMB clients a diverse portfolio of services. Very large financial services organizations may choose to develop the projects completely in-house. Most financial institutions will build their SaaS applications by linking together services from larger banks (e.g. Fidelity) with other SaaS infrastructure providers (e.g. Saleforce or OpSource) . In either case, the keys to success will include developing a consistent and user validated UI across all services. On the development side this shortens development time for new services. On the customer side, if a customer knows how to use one application, then it will be easy for them to try and then subscribe to additional services without training or frustration.
Address the Full Customer Life Cycle
The real determinant of success however, will be how well financial institutions develop their RIAs and SaaS to deliver the full customer life cycle that accompanies the new services. It is not enough to deliver a well-designed forecasting tool, for example. That is just one component of what the customer experiences. Equally important, the SaaS must provide the demo, sign up process, provisioning of services within the SMB, support, monitoring or internal use, and billing - the entire customer life cycle - all with the same level of user validation testing, customer engagement, and RIA performance and design consistency as the core application. I’ve described this life cycle approach in a previous post, and it is no less critical to apply to SaaS services provided by financial services firms. It is more important to start with just one new service, but address ease-of use, UI consistency and all aspects of the life cycle, then it is to come up with a complex new portfolio of financial products but not address the full life cycle or UI consistency.
Monitoring in Saas to Cross Sell and Upsell Services
SaaS offers a unique opportunity to monitor when and how the software is being used, or when and where the customer stops using the software. This information can then be applied to correct drop out points in the life cycle, improve effectiveness and efficiency for your customers, and quickly determine how to modify your application on a regular cycle to meet user needs.
Monitoring also enables financial institutions to plan and execute targeted marketing campaigns aimed at improving online and mobile banking, bill payment adoption and usage and select value-add financial management services.