Volker Liermann - The Digital Journey of Banking and Insurance, Volume I: Disruption and DNA

If things are to remain the same, things will have to change.

To unpack this rather enigmatic quip we must distinguish between the two occurrences of things. The first refers to those things that are central to an institutions mission and its value system. The second refers to secondary circumstances that serve the core mission but are not themselves fixed and immutable. Too often people become so attached to this second class of things that they fail to appreciate their secondary character. Clarifying this distinction is essential to coping successfully with periods of profound change.

My own experience has been focused on the banking sector where the central mission is effective allocation of savings into real investments with positive expected returns. Prior to even that basic goal, however, is the need to attract depositors savings by providing competitive services and a reputation for competence and honorable behavior.

Attracting deposits is closely tied to customer relationship management. Providing competitive tools and services that assist customers in managing their own financial resources is essential. The same can be said for insurance companies providing support to assist customers in managing their personal and corporate risks across multiple dimensions. Remaining competitive amid rapid technological change requires continuing insight into customers priorities and preferences. This is further complicated by intergenerational differences in such preferences. How to maintain effective customer contact through multiple channels of interaction is one of the important topics of the three volume Digital Journey project.

For banks, meticulously accurate and timely processing of transactions is taken for granted by customers. Falling short of this expectation is the fastest way to lose business. Advancing technology provides ever better means of achieving both speed and accuracy, but it is like running on a treadmill. Success requires adopting new tools continuously as they become available to meet ever more demanding customer expectations. Staying ahead of the competition is only possible with agile software systems built with state-of-the-art twenty first Century system architecture.

Cost optimization and control is as important as ever. What has changed is the need to focus on dynamic rather than static efficiency. The cost of computer processing and data storage has fallen steadily over the past forty years. Traditional computer software architecture was designed to economize on these resources but it resulted in systems that were rigid and difficult to modify. Twenty first Century system architecture is designed to make such continuous modifications far easier and largely foolproof, as illustrated by the seamless evolution of applications on our tablets and smart phones. This enables continuous enhancement of features and functions without steadily rising maintenance costs.