Redefine the Delivery of Financial Services Journeys That Clients LOVE! [inQuba & Microsoft WEBINAR]

Editor's Notes

• #6: This slide is hidden This slide lays out the structure of the POV and can also be used as an Agenda Slide
• #7: Use this slide or optionally slides 6 and 7 What are the primary forces that continue to drive Financial Services organizations to transform their business? Banking: Lower interest rates to support world economies Near 0% interest rate adopted by the central banks further pressures bank and insurance profitability (Source: Bloomberg, https://www.bloomberg.com/news/articles/2020-03-05/the-stimulus-toolbox-to-help-virus-stricken-economies-quicktake) Banks are increasing loan lost reserves to account for bad debt Drivers for bad debt include unemployment –7% of global working hours lost that is equivalent to 195M full time jobs lost expected (Source: United Nations, https://www.cnbc.com/2020/04/08/ilo-coronavirus-is-set-to-cost-195-million-jobs-in-the-second-quarter.html) Capital Markets 25% drop in in M&A volume. mergers due to market volatility Opportunity in the >2T in US private equity to deploy. Global private equity has been raising money for targeted opportunities and preparing for the surge.  For example, the US private equity firms are sitting on $2T war chest (dry powder) Insurance Billions to trillions $ lost in monthly losses from small and medium sized businesses around the world (9 times what insurers paid for 9/11 in the US). Government and small business owners are driving for insurers to cover the lost. Such an action would create a solvency crisis in the insurance industry.  Calls from customer advocacy and local/state governments for insurers to cover the cost of business interruptions “If insurers nationwide had to pay business interruption policy claims for which they collected no premium, it could cost the industry each month anywhere from roughly $150 billion to nearly as high as $380 billion,” said Léonard, noting that the smaller amount accounted for the U.S.’s small and medium-size businesses that currently have business interruption coverage and the larger amount includes those who do not. “Pandemic-caused losses are excluded from standard business interruption policies because they impact all businesses, all at the same time.”   Triple-I economist – Michel Léonard  https://www.iii.org/insuranceindustryblog/2020/04/ Such a requirement creates solvency challenges for insurers 2) Auto premium refunds as less cars are on the road with shelter in place across the world Major insurers are refunding on average 15% of auto premiums.  Allstate has said its own telematics data shows that people are driving between 35% and 50% fewer miles in most states. (Source: Insurance Journal, https://www.insurancejournal.com/news/national/2020/04/13/564510.htm) Insurers are reporting a 40-50 percent drop in claims volume for personal auto and a 30-40 percent reduction for commercial auto due to the coronavirus pandemic, an executive for claims-automation provider Snapsheet said Tuesday, April 14, https://www.carriermanagement.com/news/2020/04/15/205491.htm
• #8: Talking Points. Satya Nadella shared this perspective on the Microsoft Q3 earnings call. COVID-19 forced our customers to accelerate their transformation in a way we hadn’t seen before.  “From remote teamwork and learning to sales and customer service to critical cloud infrastructure and security — we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything” We are seeing the same patterns playing out in Banking. COVID-19 is accelerating pre-COVID-19 projects that were happening at a slower pace. We don’t see Transformation Strategies changing – just acceleration in terms of execution. Necessity is the mother of invention.
• #9: Pre COVID-19 - The forces at work that are driving banks to change were: 1. Changing customer expectations: Empowered customers are clearly a part of today’s industry landscape. They are:  More informed than ever Increasingly mobile Expecting consistent service across channels Not as trusting as they once were As a result, there is increased pressure for new customer engagement models, greater transparency, and the ability to demonstrate business integrity.  2. Non-traditional players leading to threat of disruption and disintermediation Technology is an intrinsic part of the financial services business. However, the gap between consumer expectations and adoption of new technology versus system capabilities is widening. Indeed, new entrants are pushing the innovation envelope, and offering lower pricing and improved customer experiences by capitalizing on technology. This increase in non-traditional players has garnered the attention of younger generations, forcing banks to address these new entrants in the banking industry and appeal to younger customers. 3. Changing Business Models Digital transformation is also affecting how banks used to do business. The rise of non traditional players and FinTech are forcing banks to change their business strategy and embrace new business models that blend 3rd party products and capabilities with bank’s own products. The risk of not considering new business models is great – banks that don’t will be marked irrelevant among customers. 4. Fraud and Cybercrime Financial crime is on the rise, with sanctioned individuals and terrorist financiers using increasingly sophisticated means to move money and circumvent protections. Governments around the world are trying to fight back, and a quarter of banks think cyber risk is the top threat in the industry. Regulators are cracking down and the penalties for banks are growing in severity. Failing to find and stop transactions with sanctioned organizations can be catastrophic to a financial organization. 5. Legacy Systems The drive for a frictionless customer experience calls for banks to transform their legacy technology to support the new demand for the right experience, at the right time, through the right channel. Siloed dates and systems that don’t interoperate fail to keep up with the new pace of business. While the cloud was once considered a major security risk, banks are now looking to leverage the flexibility and scalability of the cloud in a safe, compliant manner. 6. Regulation The industry is experiencing a level of regulatory scrutiny that is unprecedented in its intensity. Indeed, regulatory compliance is having a profound effect on the business models of financial institutions. Therefore, regulatory compliance and risk management remain top priorities as financial institutions navigate the “new normal.” Data is key to the transformation of financial services. The amount of structured and unstructured data that financial institutions need to analyze has grown—and will continue to grow—exponentially. Insight into risk management and regulatory compliance is central and strategic to the industry. Financial institutions that best manage and monetize data will be on a strong path to stronger risk management and improved operational efficiency.  Sources: 1Financial Brand, 2016 https://thefinancialbrand.com/wp-content/uploads/files/Retail_Banking_Trends_Predictions_2017.pdf 2PWC, 2016 Source: PwC, Global Economic Crime Survey, 2016 http://www.pwc.com/gx/en/economic-crime-survey/pdf/GlobalEconomicCrimeSurvey2016.pdf 3Capgemini, 2017 https://www.capgemini.com/wp-content/uploads/2017/07/gen_y_whitepaper.pdf 4Capgemini, 2017 https://www.capgemini.com/wp-content/uploads/2017/07/banking_top_10_trends_2016.pdf 5PWC, 2016 https://www.strategyand.pwc.com/media/file/Catalyst-or-threat.pdf 6Celent, 2016 Source: CMS Top Emerging IT Trends in Banking Sector, http://www.cmsitservices.com/blog/category/infographics/ https://www.mckinsey.com/industries/financial-services/our-insights/analytics-in-banking-time-to-realize-the-value https://disruptionhub.com/open-apis-death-retail-banking/ https://www.forbes.com/sites/oliviergarret/2017/03/29/5-industries-that-blockchain-will-likely-disrupt-by-2020/#6e4508fe6692 https://beta.theglobeandmail.com/report-on-business/feature-too-big-to-disrupt/article22163574/?ref=http://www.theglobeandmail.com& https://www.pwc.com/gx/en/industries/financial-services/publications/financial-services-technology-2020-and-beyond-embracing-disruption.html https://www.forbes.com/sites/steveculp/2017/02/15/artificial-intelligence-is-becoming-a-major-disruptive-force-in-banks-finance-departments/#35c4a71e4f62 http://www.businessinsider.com/chatbots-banking-ai-robots-finance-2017-10
• #10: To address those market forces, the additional impact of COVID-19, and customer/analyst feedback, we are now focused on three priorities with our customers: Respond: support our customers’ most pressing needs to maintain business continuity despite the disruptions and restrictions of the moment Recover : help our customers prepare to rebound their business in a time of continued uncertainty and upheaval Reimagine: reimagine our customers’ business to leverage insights, streamline operations, and realize business efficiencies to succeed in a marketplace that will be permanently altered Note that these phases are not sequential – they run in parallel. Our customers have multiple workstreams where we are still adapting to the current crisis, but have projects in flight where they are planning the comeback To that end, we have organized our Industry Priority Scenarios for Financial Services to align with these priorities. Note: highlight the primary roles/functions that we are targeting for these conversations in both Banking and Insurance. Our “standard” list of targets is provided below. Executive suite: Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Strategy Officer, Chief Transformation Officer, Chief Risk Officer, Chief Experience Officer Sales & Marketing: Chief Digital Officer (CDO), Chief Marketing Officer (CMO), VP of Sales, Head of Distribution, VP of Retail Banking/Wealth Mgmt/Private Banking/Commercial Banking, Head of Head of Reinsurance/Actuary/Life actuary, etc… Customer Support: VP of Customer Service/Support IT/Network Operations: Chief Technology Officer (CTO), Chief Information Officer (CIO). Chief Security Officer (CSO)
• #11: Guidance – Use Slides 13/14/15 if you want to present slides with less text - or alternatively use slides 16, 18, or 19 if you want to present with more content on the slides. To support our customers’ most pressing needs to maintain business continuity despite the disruptions and restrictions Empower Employees through Teamwork: Banks and capital markets firms must rapidly transition their front, mid and back office employees to remote work, mount and manage a holistic crisis response, and strengthen virtual connections with both employees and customers with the same level of security measures while meeting regulatory requirements. To support remote collaboration and productivity for secure anywhere/anytime teamwork, we’ve made Microsoft Teams available for free through commercial offers with Fast Track as a free enablement for configuration and adoption for eligible customers. Customer story: TD redefines banking in the digital age with the Microsoft Cloud to empower employees and transform the customer experience, https://customers.microsoft.com/en-us/story/td-banking-capital-markets-office-365-blog “We are deploying Microsoft Office 365 to empower employees to be more mobile and productive, so they can continue to provide the legendary customer service that has always set us apart.” Jeff Henderson, executive vice president and CIO of TD Bank Group Empower Employees and Agents through Teamwork: Insurers need to improve organizational and employee productivity through secure collaboration, communications and virtual connections between their home office and their captive and independent agents - untether agents and claims adjusters to work securely and productively anywhere  Customer story: AXA ensures innovation in digital customer service and empowers employees with Microsoft 365 “For AXA, Microsoft 365 is the foundation technology for our workplace to exchange information at scale and accelerate product development and delivery. At the end of the day, if your working environment can’t keep pace with your customers’ personal experience, how are you going to deliver new solutions that are adapted to their way of living?” Astrid Stange, Group Chief Operating Officer at AXA.   https://customers.microsoft.com/en-us/story/765562-axa-insurance-m365-casestudy Banks are working to quantify the impact of COVID-19 on their portfolios and to adjust business accordingly Manage risk across the organization: By leveraging the cloud, banks can scale when needed and become more agile while saving on cost from infrastructure capacity to burst and scale processing quickly.  Banks can speed decisions with rapid risk analysis and deep insight with high performance compute for workloads like credit risk and portfolio risk for banking. This improves the ability for organizations to assess opportunity costs when allocating capital or undertaking financial risks through the immediate crisis as well as when the economy returns to the new normal.   As managing risk compute demand increases, there are opportunities to conduct an audit to identify non-critical workloads that can free up resources to help save on cost.  Another opportunity resides in non-production services that can be snoozed when employees are not actively working. Customer story: UBS is currently using Azure to power its risk-management platform, technology that requires enormous computing power, to run millions of calculations daily on demand. The result — speeding calculation time by 100 percent, saving 40 percent in infrastructure costs, gaining nearly infinite scale within minutes — means the firm can have more working capital on hand and employees can make quicker, more informed decisions for their clients. https://news.microsoft.com/2017/04/26/ubs-taps-microsoft-cloud-power-business-critical-tech/
• #12: To help our customers prepare to rebound their business in a time of continued uncertainty and upheaval: Combat Financial Crime: Banks are in an arms race against cybercriminals who are armed with the latest technology and are growing in numbers and sophistication.   The cost of mistakes is too great as it is more than liability but real-world consequences of terrorism and drug cartels, etc.. The focus is on Anti-Money Laundering (AML), Know Your Customer (KYC), sanctions screening, and Transaction Monitoring Systems (TMS), fraud detection and prevention.  Banks needs to embrace new technology to take on these ever-evolving threats to ensure legitimate customers are onboarded and legitimate transactions are transacted.    Customer story:  Biocatch To help our customers prepare to rebound their business in a time of continued uncertainty and upheaval: Deliver Differentiated Customer Experience: use data-driven insights and AI to develop a 360-degree view, deliver products customers want, and leverage customer insights to provide extraordinary customer service to differentiate from the competition and take share The global pandemic is straining service centers everywhere, with a massive uptick in call volumes, further complicated by many agents working remotely.   With omnichannel capabilities for Dynamics 365 Customer Service, contact center  employees can provide consistent, personalized support while working remotely. Customer story: Nedbank electronic virtual assistant handles 80 percent of the inquiries at just 10 percent of the cost of live agents, https://www.microsoft.com/en-us/industry/financial-services/banking-capital-markets/deliver-differentiated-customer-experiences?activetab=pivot%3aprimaryr12
• #13: Modernize payments and core systems to gain cost savings and accelerate new product development that improve time to market in meeting customer needs: Modernize Payments and Core Systems: Microsoft and its partners provide organizations with innovative payments and core systems solutions that increase agility to roll out new payment products and services and to save on cost from infrastructure Customer story: Vipps, More than 2.7 million Norwegians pay for just about anything with the Vipps mobile payment app. In fact, they don’t just send you money in Norway anymore; now they Vippse it to you. Six of every ten Norwegians Vippse—more than 400,000 times on an average day. Vipps holds 98 percent brand awareness in Norway, and almost every bank in the country supports the app. Green Assets as a Service – this is a new solution we are incubating for FY21 - Microsoft and Citi are making it faster and easier to create and issue green bonds. Identifying the right assets and then designing and issuing bonds for the Environmental Societal Governance (ESG) space is labor- and time-intensive which increases costs and limits wider adoption. Microsoft and Citi are creating a tool to streamline and modernize the process and make green and social responsibility investing faster, more impactful, less expensive, and ultimately more profitable.
• #14: This slide is animated and builds in two phases: To help our customers transform we have built out a set of scenarios – to help them address their key challenges and transform to a new operating model For each of these scenarios, we marry the power of our platform and the amazing innovation delivered by solutions from our partners. Our partners have built Banking Industry solutions that can help you to accelerate your evolution with flexible deployment models to meet you where you are (On Premise, Hybrid, and Cloud) All of these solutions are infused with AI and help you drive better insights from your data
• #15: This slide builds from the left, and from the top. Talk your audience through the different scenarios as the slide builds Navigate the Now Empower your Employees through Teamwork As lockdowns took hold, Banks had to protect employee safety by moving rapidly to remote working. Social distancing was also employed inside the middle and back office where current operations could not be done remotely – example Trading scenarios and call centers. Pre COVID-19 Banks were looking to reskill staff – Banks did this using classroom and in person events – now they will need to deliver this virtually Manage Risk across the organization COVID-19 has had massive impacts across all industry sectors – paychecks are not landing in bank accounts and small businesses have closed due to lockdowns. This has stress tested financial risk models like never before and Banks need to find new ways to model risk as their liquidity is impacted. Banks also need to explore new ways to model credit risk as a recovery takes hold. Lastly process compliance will be impacted. Banks need to be deploy new processes for Stimulus programs and many of these have additional compliance overhead in terms of process compliance Plan the Comeback In parallel to Navigating the now, we need to build new customer experiences. Banks need to engage and service customers virtually in advisory scenarios or branch interactions Banks also need to proactively reach out to customers impacted by COVID-19. We have partners like Personetics who use AI to identify customer insights from their transaction history and proactively provide insights or offers of assistance to individual customers experiencing financial difficulties or SMBs who can take advantage of government stimulus programs Contact centers also need to be transformed. Contact centers were overloaded in the early days of the crisis and many of them are practicing social distancing – which means they are operating at reduced capacity and at the same time coping with increased volume. This is a great opportunity to deploy virtual cost centers or even better explore how Power Virtual Agents can service more customer requests Banks also need to build inclusive experiences – for vulnerable customers who might not be technically adept – mobile apps and online banking needs to be accessible and easy to use – so that they can be used by everyone Combat financial crime COVID-19 has seen an increase in fraud activity and identity theft. Microsoft has great solutions to help here in terms of cyber protection and partner solutions to provide better security for customers from account takeovers – such as BioCatch – which provides continuous authentication using Behavorial Biometrics. Shape the new normal Longer term, Banks are looking to modernize their core systems and migrate to the cloud – this will provide more resiliency and continuity of service for future pandemics Banks are also exploring new banks, built separately to their legacy platforms
• #17: This slide is animated and builds from left to right Transformed Culture Remote Working will fundamentally change the culture of our Banks. A couple of weeks ago, no one thought banks could function with a fully remote workforce. As people work remotely for extended periods, the challenge be less around connectivity but keeping employees engaged and supported at an emotional level. A culture of trust will be needed between managers and employees. Note that employees are already coping with home schooling and could have spouses impacted by COVID-19 or have lost their job. Many Banks are putting in additional support programs to help including healthcare benefits and counselling To drive down costs, Banks will look to automate more processes. This should free up employees from low value activities to focus on customer relationships and experience Reskilling was a challenge before COVID-19. Banks have traditionally deployed training in classrooms face to face. With a virtual workforce, Banks need to deploy training virtually and build a culture that promotes continuous reskilling In this slide, we explore the Operating Model for a Resilient Bank, and bring together many of the talking points of the document Customer Experience will need to evolve to a fully digital model. Banks also need to build products that are accessible to customers at risk, with user experiences that Banks will also need to serve their customers as they recover. Use AI to proactively reach out where they see customers with financial difficulties Banks will be more resilient – able to perform front, middle, and back office operations virtually New Datasets and AI will enable the bank to extend credit to customers that were previously too risky Lastly Banks will make extensive use of AI to protect their customers and their internal data estate.
• #18: Expansive platform – Financial Services is a regulated industry. Switching to cloud will be a journey and at Microsoft, we give our customers choice and flexibility to deploy workloads on premise and hybrid models. We even give our customers to manage resources and data across multiple clouds and on-premise with Azure Arc  Pervasive Intelligence – leveraging the power of data and AI is critical for our customers. AI is infused across all of our IPSs and we will continue to innovate in this space to bring great telemetry and insights to our customers  Regulatory Compliance – We have made tremendous investments in the regulatory compliance space to enable our customers and partners to move to the cloud in a compliant way 
• #32: A view of the end-to-end customer journey which we will engage the customer through..
• #35: A view of the end-to-end customer journey which we will engage the customer through..
• #36: A view of the end-to-end customer journey which we will engage the customer through..
• #38: A view of the end-to-end customer journey which we will engage the customer through..
• #44: Solution themes from before: Like journey insights