Webinars • Dec 02, 2020 • 30 MIN PLAY • ON-DEMAND

Mission Critical: UCC in 2021 For Financial Services

Michael Araneta Pic
Michael Araneta

Head of Financial Insights @ IDC

Kevin Ryder Pic
Kevin Ryder

CMO & CPO @ IR

During this session IDC and IR will reveal market trends relating to unified communications challenges and opportunities for Banking, Financial Services, and Insurance companies. These findings were identified by IDC during a research project commissioned by IR.

Details

Transcript

The new normal for banking, finance and insurance organizations is pushing them to rely more heavily on UC&C systems and services, with global spending in this area exceeding $40 billion dollars in 2020 alone.

Join the IDC & IR webinar to discover:

  • How UC&C is enabling new ways of delivering financial services.
  • Key trends impacting UC&C management globally.
  • How your organization can succeed amid new working realities.
IR | BrightTALK

Michael Araneta 

Hello, and welcome. My name is Michael Araneta, I had research and advisory services for IDC Financial Insights in the Asia Pacific region. This is a continuation of the Outlook 2021 work that we have been doing over the past couple of weeks, as we really look at the shape of recovery that we are expecting in 2021, and the drivers of that particular recovery. 

Today we're going to talk about the investments made into UC&C (Unified Communications and Collaboration) made by the leading financial services institutions worldwide. We're talking about banks, insurance that are capital market players. This is a huge market that we are tracking, but also quite interesting because the drivers of investments in UC&C have really changed significantly. 

So, let's talk about what 2021 brings for the UC&C market. We also are privileged to have the support of IR. IR is one of the firms that we are tracking especially as they bring relevance to UC&C for 2021. IR is represented today by Kevin Ryder. Kevin is the Chief Marketing and Product Officer of IR, across the globe but he is based in Sydney, Australia. 

Kevin, how was 2020 for you?

Kevin Ryder

Hi, Michael. Thanks for having me on board today. 

2020 has been a very interesting year especially here in Australia. But globally, here, we started off with droughts and then fires and then the pandemic went global. 

It's been a year like no other year and we found that our customers had to scramble to meet the demands of the users and customers. It's been a year where we've been used to cross-working from our corporate offices, and then there was a scramble to work from home. 

We had many of our customers coming to us asking us: “How can we help?” How can we ensure that their employees were able to work seamlessly remotely, and how were they able to continue to offer great customer service from their home offices usually? So, business continuity was a huge thing. 

We help many of our customers get up to speed very quickly. We help them remain connected. Because obviously, as humans, we want to remain connected and so Unified Communications and Collaboration has been a tool that has suddenly entered the vernacular of the dining room table like Zoom and etc. But, it's been something that's enabled us to stay connected, something which we couldn't have done 10 years ago. We wouldn't have had the technology and the internet speeds to do that. 

It’s been an interesting year for us and for our customers and we've been excited to be able to help them and maintain their customer services throughout this. I suspect that that will be a feature going into 2021, as well.

Michael Araneta

You talked about all these changes that we saw over the past couple of months. In fact, we've been talking about digital transformation that has been completed in six months when it would have taken us longer than two years if this COVID 19 pandemic did not happen. So let’s look at all these lessons and all the capabilities that we have developed over the past couple of months, and see if we have learned from them, but also how are we going to take them to 2021.

6 key trends in financial services

I'll talk about some of the six strengths that we are seeing that we think will shape investments into UC&C for 2021. 

The first thing I think, Kevin, you've already talked about this, and I'm bringing up this slide, coming from IDC Financial Insights. We're talking about the creation of new business models.

The delivery of financial services, as you had mentioned, has moved off to headquarter delivery, if you will. There's a lot more talk about: “How exactly are we going to deliver financial services from home? Or through a distributed manner?”

If you also look at the creation of these new business models, you're also looking at the involvement of third parties in the delivery of either products or services as well and you are in Australia. Australia has seen the first version of open banking in the Asia Pacific region with the four banks mandated to open up functionality, application and data to third parties as well so that third parties can start to offer new products or this ecosystem that products that we've been talking about for quite some time. 

With the combination of open banking and the ability of the organization to start talking about new products and new business models, we are suddenly talking about the ability of the organization to offer facilitation services, lifestyle services, but also the ability of the organization to use recommendations as really part of their proposition. 

So we're looking at IDC to define what recommendations would be for financial services. It won't be just the selling of products, but it could be the selling of recommendations or advice to our customers. Advisory-led businesses are going to be very important as well. That would have implications to UC&C, because we really have to be proactive in our approach to our customers, proactive in our conversations to customers. It will be very interesting in 2021 too.

As we look at the creation of these new business models, we need enterprise-wide insights to be available to every staff who would be engaging with customers, or every relationship manager who would be interacting remotely with the customers. 

Therefore, we need the data action as well as insights to be integrated but also devolved to different touchpoints across the enterprise. So there will be, I think, the availability of all these data actions and insights, but also the profusion of this availability and data and insights where they are needed. 

The fourth trend that we are looking at would be this new customer engagement model and it has featured very well in our research over the past couple of weeks as we look at new ways how customers are really engaging with us. Think about this: we never saw pre-staged interactions take off as it did over the past six months. Pre-staged interactions where customers are saying, “I'm going to speak to you or meet you at 10:30 in the morning, and we will have a conversation around this particular topic.” This is relevant not only for the retail segment, or the wealth management segments but relevant, too, for the SME corporate banking transaction banking segment. 

You are also looking at self-managed transactions where you really need a lot of data to be given to the customers so that they can make decisions for themselves. You're also looking at extreme collaboration and coming up with solutions for the customers. 

And then finally, proactive outreach. I talked about all these recommendations and advisory services that will be part of our proposition going forward but you need to have a lot of these proactive capabilities to understand what the requirement or what the customer might be in at a particular point in time, and then be able to come up proactively with those recommendations. So, proactive outreach is also featuring very well in our considerations of UC&C investments. And then, you need to empower people, as those decisions need to be made at the right moment at the right time with the right products and services. You need staff to be able to make decisions for themselves, but also proactively reach out to the customers. 

All of these abilities of intelligence to be filtered throughout the entire enterprise and made available to staff relationship managers, contact center agents that are very important, too. The intelligence will allow them to be empowered.

And then finally, we are looking at extreme collaboration that's happening. I mean, there are some trends that are very popular these days, DevOps being one of them. This is the integration of different units in the enterprise, especially in IT as they want to be able to move from deployment of these functionalities to the market. They also want to be able to develop these functionalities very quickly too. So this collaboration of the development and operations teams are going to be very important, too; data Ops, intelligence Ops, AI Ops. Very important to also mention, especially as we integrate all these capabilities, and then be able to deploy them very quickly through our operations teams. 

And then finally, risk and finance integration, which has been happening for quite some time, but has really accelerated over the past six months. It’s very interesting to also look at how risk management data and people integrated more with the finance functions but also integrated more with business functions, as well, who need risk and finance integrated data. So a very interesting set of drivers that I think will take us to 2021. 

Kevin, what do you think about this, what stands out for you?

Kevin Ryder

Well, Michael, there's a lot of interesting information there. And I think the one that stands out for me is the enterprise insights on how our customers are asking for intelligent and actionable insights. There's so much data out there. There's a vast amount of data that's produced. And for them, it's how do they get access to some of that most critical data in real-time. Because if you want to be proactive, if you want to offer great service, if you want to ensure that you can stay ahead of competition in today's world, it's about getting access to that data in real-time and making it actionable. So our domains are in Unified Communications and Collaboration, but also in the Payments area, as well as contact centers. 

We enable our customers to find the so-called needle in the haystack and that sort of power to correlate those insights into something that's actionable. Something that can help the business have a measurable impact on them can help them increase revenue, increase customer service, improve productivity, etc. So for us, it's about ensuring that our customers have the right data at their fingertips, to have that proactive insight to make those decisions in real-time. That can have a profound effect on a company.

Michael Araneta

The other thing that seems to also stand out is this real push for the transparency of where the data is, what decisions have been made. That also is going to be quite an interesting capability that we need to build for 2021. Not only because regulations are forcing us to be transparent, but also forcing us to really know what is happening across the entire enterprise. 

There are some mandates that we'll talk later on in terms of availability, reliability, but also transparency, with regard to how we manage data. But this is, I think, the era that we are approaching, where we need to know what we are doing, not only with customer data, customer information, but we need to know how we're supporting all of these movements of data intelligence, as well as insights.

We at IDC, we're also looking at increased spending on enterprises in UC&C. I think if you look at the numbers and pull up the numbers here, by 2020 this year, organizations are already spending about 40 billion for UC&C systems and services, a very interesting set of numbers 50% of enterprise organizations, enabling UC&C to deliver on digital experiences huge numbers, huge investments being made. But we also need to understand: “What is the ROI out of all of these investments?” Which brings us to one of the key themes that we saw in 2020 emerge, especially around that of ROI. 

Kevin, how do you see ROI conversations evolving? Because obviously, in this era, where you've got extreme cost management, banks, insurance, capital market players concerned about how much they're spending on technology, how do you change this by talking about good ROI for those investments?

Kevin Ryder

I think it's mostly about ensuring that you can demonstrate impact. And that impact, as I mentioned earlier, maybe around productivity revenue and greater customer experience. But, in essence, what we try to do is we work with our customers to try to demonstrate where we can see an improvement in them offering a solution through to their customers. And that may be just trying to maybe simplify or make it more a frictionless customer experience, be it a contact center or via video interaction that they may be having today with their customers. Of course, less people are going into branches. More consultations are happening over video. So we want to demonstrate that that's their brand and that's an important part of their image. So the tools that their IT operations teams need, for example, make sure that that's a seamless experience, incredibly, right. 

So I think that if we can help them simplify the complexities that they're currently experiencing in this new world, then we can demonstrate that we can tie it to their brand and we can tie it to a tangible outcome, an increase in their customer satisfaction, or perhaps increase in productivity.

Michael Araneta

Yeah, there we go customer experience and customer satisfaction, helping shape the conversation around ROI. 

But also another statistic coming from our team as we did this research, the implementation of a proactive posture across the enterprise by 2023. More than 50% of financial organizations will adopt a proactive posture to network operations. What does this mean? What is being proactive moving forward, mean Kevin? 

Kevin Ryder

I think in the case of let's say operations, supporting the sectors, being proactive is understanding what's impacting your customers, your users before they do, and ideally being able to do something about that. 

So we talk about simplifying complexities and in the current world today, customers just demand something to work. They want it to be simple, they want it to work, yet that grows in complexity as more vendors are included in the IT technology stacks. And so in order for the operations teams to be proactive, they need the right tools, the right instrumentation to actually have visibility across that experience. 

We're talking to our customers about how they can leverage our tools to be more proactive, to spot patterns in the data, to identify where there's going to be impacts to user experience and customer experience and that gives them the opportunity to do something about it before their customers use it and start calling in to complain. And ideally, to fix it before anyone even notices.

Michael Araneta

But this also calls for the ability of the organization to look at predictive tools so that we are able to anticipate problems issues and the delivery of these services. I mean, is that something that we're looking forward to, as well?

Kevin Ryder 

Yes, and I think the power of the Cloud has given us the ability to apply greater technologies, such as machine learning and AI so that we can apply more predictive types of scenarios. With that large and increasing amounts of data, as I mentioned earlier, spotting the needle in the haystack becomes harder and harder. So I think, first of all, having the ability to correlate about or apply AI across that is going to become more and more sophisticated and that will provide the tools necessary for customers to actually be able to identify those patterns, the patterns that impact services, and to do something about it in advance.

Michael Araneta

You mentioned Cloud, the very big trend that we saw in 2020, which we also expect to really accelerate in 2021, too. Cloud. We're quite surprised by the fact that the growth of Cloud in the Asia Pacific region, at least a region that we cover. Looking at how the leading institutions in the region are saying that ideally, 70% of workloads will be on Cloud, and that’s split between private cloud and public cloud options, obviously, but 70%, is such a huge number as the ideal mix, to the infrastructure of the entire organization, but also, as part of their workloads strategy.

Speaking of Cloud, we're looking at first several trends: services, meshes and application layer network services deployed in more than 70% of Cloud-native environments by 2023. And then, you're looking at data that would indicate that by 2022, more than 50% of new WLAN, SD-WAN and UC deployments will be managed by Cloud-based platforms. Interesting capabilities that we are pushing out to the Cloud if you will. 

What is the opportunity for Cloud here, especially as we want to look at ensuring good customer experience, but also ensuring these ROI principles are met across different institutions?

Kevin Ryder

The Cloud has caused a certain profound effect and it's been accelerated in recent times, with the Unified Communications, but also Cloud Conferencing take up. But that, again, is just increasing complexity. 

There’s multiple Clouds, of course. There's Vendor Clouds, there's Private Clouds, Hosted Clouds and then you've got to combine that with the On-Premises. 

So that again is all coming together to create a complex world. It is, however, providing the ability to be more agile so I think the attractiveness of the Cloud is going to increase. But, we believe that that will be a hybrid situation for quite some time. So again, it's about making sure that IT operations can manage that entire fleet, whether they're looking at vendors in the Cloud, Private Cloud, Public Cloud, or even On-Premises. So for us, it's about ensuring that we can provide end-to-end visibility and the ability to understand service health so that they can take advantage of that Cloud. 

The ability to provide proactive alerting so much of the vendor tools available today, especially for the cloud, maybe will provide service health, they'll tell them with services up and running, but they won't be able to give them the insights that we can provide by proactively alerting the ability to drill down quickly and identify where there's issues, and we can provide context. We can correlate and identify where issues might occur, wherever they are, whether they're Vendor Cloud, Private Cloud or On-Premises. So, the Cloud is a great opportunity. And for us, it's about ensuring that our customers can move there safely and maintain that same service level.

Michael Araneta

Is complexity correlated with cost as well, right? Because I want to bring this conversation to how complexity actually is racing a lot more investment dollars, that might actually be simplified, optimized, as well. I mean, can you talk to us about this complexity associated with higher investments?

Kevin Ryder

It's interesting. people make decisions to move to Cloud for different reasons. 

Some initially, I think we're thinking about it as being a cost factor. But most now recognize it's about agility, it's about innovation and making innovation more rapid. But it does increase costs. I think that when we're bringing in additional vendors when you have to continue to innovate, that takes money. And so organizations today, of course, in the current environment, have to be careful where they invest their money, it's important to be able to demonstrate an ROI and to be able to do that as quickly as possible. 

So looking after how you invest that money is really about ensuring that you can demonstrate an ROI. But also, that you can demonstrate that it is actually going to have an impact on the business. So cost is at the moment, a major factor in the current environment, but also getting an edge over the competition is so critical, as well. So you have to sort of balance the cost with the ROI. We're seeing people spend their money more wisely. And, of course, a big part of that environment is ensuring that they can be innovative, but also continue to deliver a great customer experience.

Michael Araneta

I was speaking to the head of infrastructure for one major bank in the Asia Pacific region this week. And he was saying that more and more of the regulators are actually publishing benchmarks, as well as metrics for downtime and availability of services, particularly around the mission-critical applications and services offered by banks. 

And this got him worried, particularly because with this extreme focus and stability, they really have to make sure that they know what their numbers are at any given point in time and they also need to be able to respond if those numbers are down significantly. So regulators, I think, essentially are mandating greater availability, and are not shy in publishing all these outages. And the ability of the organization to offer 24 by seven services is a very interesting set of developments there. But this drives the need for the ability of the organization for analytics and visibility, the enterprise spending on network monitoring will reach 2.8 billion by 2024. Huge numbers there, as well, in terms of assuring availability of services.

Kevin Ryder

Well, our customers, some of the most recognized institutions in the World Banks, financial services, insurance companies, and we are represented globally. And for us, what we noticed is that the service availability, etc, when it suddenly becomes front-page news for the wrong reasons, it’s when people pay most attention. 

I'd like to say that more organizations are proactive about this, but when they decide that they've got a problem that's impacting their brand, suddenly, they come to companies like IR and say we need to solve this problem quickly.

I would like to see more of them become proactive because your brand is such an important part of your business and the reputation of the company. So I think having those tools to meet the service level agreements to meet the demands of the regulators, etc. is so critical. And whilst I can't recount specific stories, for obvious reasons, there are many examples where we've seen large institutions that have been quite exposed to risk through not perhaps having all their calls recorded or not having the right availability to meet the regulators’ set standards, etc. So it's important to actually make sure that that you have that right instrumentation, you will have the right technology to ensure that those regulations, those service levels can be met.

Michael Araneta

Yeah, we cannot avoid any more damage to any financial institution’s brand. We also cannot afford the fines that might be possibly given to us by our regulators. 

But this calls for new KPIs for UC&C. We talked about availability, we talked about transparency, we talked about visibility, and proactiveness, as well. These are capabilities that were difficult to have before. But suddenly, in 2020, as we approach the new year, we're looking at new capabilities, as well. What have been the lessons that you think would be relevant as we look at 2021, lessons of 2020? How are we going to take them forward to 2021?

Kevin Ryder

Well, I think the first thing is the move to the Cloud, of course, is accelerated. So we're now having more demanding customers. It's greater focus on costs. So I think that it's important that we accept that this is a changing world. It's not going to revert to the way it was before. We've seen increased costs in innovation, especially around AI and machine learning. And there's a huge focus on customer experience. And as we said, whether people are working from home, or wherever they happen to be, their perception is reality. 

So there's an enormous amount of focus on customer experience, as well. And I think that we have a huge part to play in that the Unified Communications and Collaboration, technology today is a huge enabler. And I think that there's a lot of innovation to come and I'm looking forward to seeing that in 2021, as well.

10 new drivers, new capabilities this 2021

Michael Araneta 

In a research that we also did very recently, we looked at 10 capabilities that we've never had before that will be possible in 2021. 

There's 10 of them that I am showing on the screen now. But there are some standout capabilities that seem to be very interesting. 

The first one emphasizes the core use cases, including customer experience, simplicity, and ease of use, that's number three. 

Also, number five, Lines of Business will be involved in those investment decisions moving forward, especially because they want to create products and services iteratively and bring them out to market iteratively, as well, and very fast, too. Lines of business, one of the key decision-makers now in terms of UC&C investments. 

And then number 10, shifting emphasis towards the solutions, not siloed products anymore. So this calls for really orchestration of tools to be able to support these use cases that would be very relevant moving forward. What use cases do you think would be irrelevant in 2021?

Kevin Ryder

Well, I think you touched on customer experience. And one of the things that we mentioned earlier on is that less people are going into physical locations to have their interactions with organizations, whether it's with their financial advisors, or banks, etc. So more of that is being done remotely and is being done via video. 

We're going to be having less and less direct face-to-face interactions. There will be a certain return to that when we return to normal. But I suspect that people will get quite conditioned and quite used to doing it now remotely and if they don't have to turn up in a branch and they won’t. So I think we'll see that replaced with a lot more video interactions. I think that's an important area in their use case. I think this is going to impact the way that organizations think about their real estate as well as cost because we're already seeing branches potentially closing because less people are going into them.

Michael Araneta

And this ability to be able to interact and engage with our customers through video, talk to us about the implications of this to cost, but also quality, and the pursuit of this transparency of financial services

Kevin Ryder

I think one of the key things is that as humans, we enjoy that connection, and it's something that's very difficult to replicate. When you're not there in person, you don't get that opportunity to build rapport. So technology has to do its best to try to replace it. I think you can’t replace it completely. But it has to do the best it can to replace it. Video is of course a great medium in that it allows us to see the people's emotions. You can sort of see how people are reacting. So it's better than having just a voice alone but more and more now we're seeing that technology evolved so that those interactions can get better and better and the quality of those interactions has to be frictionless. It has to be so that customers can feel like they're in the same room as their advisors or their bank managers or whoever it is they happen to be dealing with. So I think that there's going to be a lot of innovation in that area, as people try to leverage that new technology.

Michael Araneta

There’s no better proof or quality of engagement than this conversation that we're having on video. We could have been talking to each other in person, maybe last year, and look at the quality of conversation that we're having via video. But this brings me to the last part of our conversation around quality and making sure that we also provide quality experiences to our customers moving forward. 

That is the key lesson that I learned from this. If you look at 2020, it was all about resilience, the ability of the institution to provide availability of services, reliability of services, and so on. That was the need of 2020. But 2021 offers us a lot more opportunities for quality, quality built on resilience, obviously, 

Kevin, what do you think is the biggest lesson that we're going to take to 2021?

Kevin Ryder

Well, I think, as you say, it’s resilience. I think, now that we are in a new norm, as it were, I think it's really about making sure that the solutions that have been put in place over the last six months are battle-hardened, as it says. 

Back in March, when organizations went into lockdown, what we found was that there was a scramble to get home to get business continuity up and running. But now, I think we're getting more and more comfortable with this idea that we won't necessarily return to the offices and certainly not full-time. And so we have to deal with this new environment, which we are faced with. 

It has accelerated that Hybrid Cloud. And I think many of the organizations, especially the large organizations that have perhaps resisted Cloud before, are growing more confident with the Cloud and the security that it now offers, the agility it also offers and the innovation that it can drive as well. I think that's something where organizations now are making sure that they can now look at all this new technology they've implemented. Some of it, they've put in very quickly, just to make sure that they could get that business continuity. 

And now what they're doing is we're seeing IT operations, departments especially look at that and say, “Right, what are we now going to settle on as our standard vendors, our new operating environment?” And they're identifying gaps in their ability to actually ensure that they've got a great experience. Some of those vendors that they perhaps introduced may not have the instrumentation to make sure that they can ensure a great experience. End-to-end and not just with that single vendor. So multi-vendor is more and more prevalent. 

In fact, recently, we've heard that people that went from or organizations that were looking at best of breed, are now saying that “we're actually going to be a multi-vendor organization”. That gives them more agility. But also, it does mean that they now need to ensure that they have sight of all of those vendors and are able to ensure that if they do have any issues they can identify those issues quickly.

Michael Araneta

Exciting times as we face the hopefully more positive pro-growth year of 2021. Kevin Ryder, Chief Marketing and Product Officer of IR thank you very much for your insights.

Kevin Ryder

Thank you.

IR | BrightTALK

Topics: Banking Finance Webinar Multi-Technology Communications UCaaS management Cloud and hybrid UC

Subscribe to our blog

Stay up to date with the latest
Communications, Payments and HP Nonstop
industry news and expert insights from IR.

We're committed to your privacy. IR uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.