SMACing the Bank: How to Use Social Media, Mobility, Analytics and Cloud Technologies to Transform the Business Processes of Banks and the Banking Experience

345 Pages·2018·4.96 MB·English

by  Balaji Raghunathan

Digital transformation leveraging SMAC technologies is one of the
most happening areas in the banking and financial services indus-
try. However, the buzzwords and noise surrounding digital often
clutter the minds of those implementing digital transformation ini-
tiatives with misconceptions. Balaji Raghunathan and Rajashekar
Maiya have ensured that they go beyond buzzwords in this book.
They have not only demystified social, mobile, analytics, and cloud
technologies for business owners, analysts, and product managers,
but also provided a guide for implementing digital transformation
initiatives.
As a leader of a digital practice providing solutions to financial
industry customers for their digital needs, I can see that this book
resonates well with the challenges faced by this industry and outlines
a strategy for addressing these challenges. If you are one of the many
who is in one way or the other involved in digital banking initiatives,
this is the book you would have been waiting for.
Gaurav Mathur
Senior Director and Head–Financial Services Digital, India
Capgemini Technology Services India
We are at the cusp of a mega technology revolution that is chang-
ing every aspect of each industry. Banking is no exception. Social,
mobility, analytics, and cloud as technology options provide every
industry, including banking, a great deal of level playing field for all
players. SMAC has democratized the technology and increased access,
reduced the entry barriers, and made it affordable across the globe. As
a leading banking group in the Middle East region, EmiratesNBD has
always taken the industry-leading position when it comes to leverag-
ing the technology, whether it is social, artificial intelligence, block-
chain, robotics, mobile, or Internet banking, EmiratesNBD has been
at the forefront. The book SMACing the Bank is timely and provides
a comprehensive view of what’s happening and how to leverage the
technology to transform. It contains years of research, study, and first-
hand experience coming together as a tool for bankers and technology
specialists to start using immediately. The in-depth understanding of
the subject by Maiya and Balaji is well articulated in the content and
brought out in a very simplified manner. It clears many terminology
misunderstandings, and this book will be a good reference point for
many bankers.
Srinivasan Sampath
Sr. Vice President–Special Projects, Emirates NBD
The authors have done an excellent job demystifying the top trends
that are transforming the digital banking and financial services indus-
try today. I recommend this insightful book to anyone interested or
involved in this space.
Amit Kabra
Experienced Digital Banking Professional
SMACing the Bank

How to Use Social Media, Mobility,
Analytics, and Cloud Technologies to
Transform the Business Processes of
Banks and the Banking Experience
By
Balaji Raghunathan
and
Rajashekara V. Maiya
MATLAB® and Simulink® are trademarks of the MathWorks, Inc. and are used with permission.
The MathWorks does not warrant the accuracy of the text or exercises in this book. This book’s use or
discussion of MATLAB® and Simulink® software or related products does not constitute endorsement or
sponsorship by the MathWorks of a particular pedagogical approach or particular use of the MATLAB®
and Simulink® software.
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2018 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Printed on acid-free paper
International Standard Book Number-13: 978-1-4987-1193-7 (Hardback)
This book contains information obtained from authentic and highly regarded sources. Reasonable efforts
have been made to publish reliable data and information, but the author and publisher cannot assume respon-
sibility for the validity of all materials or the consequences of their use. The authors and publishers have
attempted to trace the copyright holders of all material reproduced in this publication and apologize to
copyright holders if permission to publish in this form has not been obtained. If any copyright material has
not been acknowledged please write and let us know so we may rectify in any future reprint.
Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmit-
ted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying, microfilming, and recording, or in any information storage or retrieval system,
without written permission from the publishers.
For permission to photocopy or use material electronically from this work, please access www.copyright.
com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood
Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and
registration for a variety of users. For organizations that have been granted a photocopy license by the CCC,
a separate system of payment has been arranged.
Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used
only for identification and explanation without intent to infringe.
Library of Congress Cataloging- in- Publication Data
DataNames: Raghunathan, Balaji, author.
Title: SMACing the bank : how to use social media, mobility, analytics and
cloud technologies to transform the business processes of banks and
the banking experience / Balaji Raghunathan.
Description: Boca Raton, FL : CRC Press, 2017.
Identifiers: LCCN 2017022727 | ISBN 9781498711937 (hb : alk. paper)
Subjects: LCSH: Internet banking. | Banks and banking--Technological
innovations. | Banks and banking--Information technology.
Classification: LCC HG1708.7 .R34 2017 | DDC 332.10285--dc23
LC record available at https://lccn.loc.gov/2017022727
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
and the CRC Press Web site at
http://www.crcpress.com
Contents
Foreword xi
Acknowledgments xv
About the Authors xix
IntroductIon xxi
chApter 1 dIgItAl trAnsFormAtIon oF bAnkIng:
A 30,000-Foot VIew 1
Shift of IT Investments in the Banking and Financial
Services Sector 3
Drivers behind the Increased Adoption of SMAC
Technologies by Banks and Financial Institutions 5
Singularity and the Rise of Smart Digital Assistants 5
Consumerization of IT 7
Democratization of IT 7
Reduced Cost of Computing 8
Digital Natives and Their Entry into the Workforce 9
Rise of the Digital Consumer, and Prosumer 10
Race between Enterprization of the Consumer and
Consumerization of the Enterprise 12
Rise of Open Source Technologies 12
API Economy 14
Banking the Unbanked 16
Benefits of SMAC Adoption 18
Foundation for Digital Transformation 18
Productivity Gains, Operational Efficiency, and Automation 18
Customer Intimacy and Entry to New Markets 19
v
vi Contents
Challenges and Impact of SMAC Technologies on the
Financial Sector 20
The Rise of Fintechs 20
Disintermediation of Financial Services 20
Aggregators 21
Culture and Mindset Change 21
New Competitors 22
Shift in Business Model 22
Financial Technology Evolution 23
Conclusion 23
References 25
chApter 2 smAc prImer 29
SMAC Era: the “Coming of Age” of Web 2.0 30
Social Primer 30
Power of Social Networks 30
Socially Mature Enterprises 32
Social Media Management 35
Integration of Social Media with Enterprise Systems 39
User-Generated Content and Collaborative Tagging 43
How are Banks and Financial Services Organizations
Leveraging Social Media? 45
Social Shopping and Social Sharing 48
Social Technology Ecosystem for the Enterprise 48
Social Network Analysis 56
Reference Architecture (for Leveraging Social Media for
Enterprise Benefits) 60
Mobility Primer 62
Mobility Challenges 63
Mobility Strategy 65
Mobile Payments and Wallets 90
Mobility Reference Architecture 92
Analytics Primer 94
Challenges Faced by Chief Data Officers 104
Developing an Enterprise-Wide Integrated Analytics
Strategy 105
Reference Architecture for Analytical Applications 109
Cloud Primer 112
Ignoring Cloud Computing, the Prescription for
Shadow IT 112
Engaging Cloud Computing Infrastructure Providers 113
Consuming Cloud Computing 115
Underneath the Cloud 116
Server Virtualization 117
Desktop Virtualization 117
Application Virtualization 118
Storage Virtualization 118
Contents vii
Containerization 118
Cloud Strategy 119
Cloud Reference Architecture 121
Applicability of SMAC across Various Banking Businesses 122
Conclusion 127
References 127
Additional Resources 131
chApter 3 dIgItAl InnoVAtIons For employees 133
The Degree of Relevancy of SMAC Technologies for
Today’s Financial Enterprise 133
Drivers behind the Use of SMAC Technologies in Today’s
Financial Enterprise 136
Catering to the Demands of the Digital Workforce 136
Anytime, Anywhere, Any Device Access to Enterprise
Information 137
Real-Time Collaboration and On-Demand Access to
Experts 139
Faster Decision Making 140
Gamification 141
SMAC and Digital 141
Digital Characteristics 141
Prerequisites for Digital Enablement of Employees 142
Security Infrastructure 143
Process Automation 150
Virtualization 152
Digital Workplace 154
Conclusion 156
References 157
chApter 4 new pArtnershIp models: dIgItAl
plAtForms And ApIs 159
Rise of the New Market Segments 160
Long Tail Economy 160
Digital Consumer Economy 160
Sharing Economy 161
Serving the New Market Segments 161
Partnering with the Ecosystem 162
Partnership Models 162
Business Platform Model 162
Business API Model 167
API Management 170
Business Platforms versus Business APIs 176
Addressing Needs of the Digital Consumer Economy 176
Navigating the Digital Ecosystem 177
Conclusion 178
References 178
viii Contents
chApter 5 dIgItAl InnoVAtIons For the consumer 181
Identifying “Moments of Truth” 182
Influencing “Moments of Truth” 186
Influencing ZMOT 187
Influencing FMOT 192
Online Tactics 192
In-Branch Tactics 192
Influencing SMOT 194
Operational Engagement Tactics 194
Service and Support Tactics 196
After-Sales Advertising Tactics 200
Influencing TMOT 203
Designing the Customer Journey Right 204
Measuring Customer Experience 206
Customer Experience Transformation Strategy 208
The “Engagement” Step 208
The “Enable Customer Productivity” Step 209
The “Enable Self-Service” Step 209
The “Enable Personalization” Step 209
Climbing the Digital Customer Experience (DCX)
Success Ladder 210
Enabling Transformation of Digital Customer Experience 211
Customer Relationship Management (CRM) 212
Marketing Automation Platform 214
Customer Experience Management Platforms 215
Analytics and Customer Insights 217
Other Enablers 219
Security and Privacy 221
The Coming of Age of Marketing Technology 221
Reconfiguration of Marketing, Sales, and IT
Organization within the Financial Enterprise 222
Desirable Habits for a Financial Enterprise for Enhancing
Customer Experience 223
It’s All about Listening to the Customer 223
It’s Not Just Customers, but Even Leads (and
Prospective Customers) Who Need to Be Understood 225
It’s All about Customer Centricity 225
It’s All about MOTs 226
It’s All about Seamless Collaboration within
the Enterprise 226
Conclusion 226
Abbreviations Expanded 227
References 228
Additional Resources 229
Contents ix
chApter 6 dIgItAl trAnsFormAtIon And ImpAct
oF smAc technologIes on culture,
thInkIng, It prActIces, orgAnIzAtIonAl
structures, And goVernAnce 233
Critical Success Factors for Digital Transformation Initiatives 234
Short Release Cycles, Continuous Evolution, and a
Minimum Value Product Approach 234
Fail Fast Approach 235
Partnering with the Ecosystem Players 235
Opening up Hitherto Closed Systems to External
Players through APIs 236
Open Innovation 236
Why Aren’t Established Financial Enterprises as Nimble as
the Fintechs? 236
Inheritance of Legacy Systems 237
Layers of Handshakes from Development to Deployment 237
Stove-Pipe Architecture 238
Partial Agile Adoption 238
Coming out of “Too-Big-to-Change” Syndrome 239
Changes to Software Development Methodology 239
Tools and Automation: Vital Ingredients for the
Agile Development Recipe 246
Scaling Agile 246
Integrating DevOps into Software Development
Lifecycle 247
Integrating Human-Centric Design Process into
Software Development Lifecycle 251
UX Design 252
Service Design 253
Design Thinking 254
Changes to Architecture 255
Two-Speed Architecture 257
Shift toward Light weight, Decentralized
Microservice Architecture 258
API Management 258
Instrumentation 259
Being Cloud-Ready 259
Changes to Teams and Organizational Structure 259
The Rise of the CDiO 259
Addressing Organizational Needs for Supporting
Two-Speed Architecture 261
Cultural and Mindset Changes Needed 262
Conclusion 262
References 265