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January 28, 2015 by Steve Williams Steve Williams

We Will Never Get to the Omni Promised Land

Banking today is one tough contact sport. Finding revenue growth, driving efficiencies, integrating mergers and improving the customer experience are all activities full of toil and thousands of execution details. Unfortunately, alongside the real gritty world of banking, our industry regularly creates buzzwords designed to bring a new sense of optimism and future promises of a land where managing a bank won’t be so damn stressful.

For the past two years, our industry’s favorite word has been omnichannel. Say that three times fast!

Omnichannel is everywhere in the trade press, blogosphere and vendor brochures. The snap, crackle and pop of this buzzword are evident in the rapid growth of web searches illustrated by Google Trends.

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In a nutshell, omnichannel is defined by Search CIO as “a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.” For a rapidly aging banker like me, “omnichannel” is just an idea designed to opiate our minds into thinking the complex, hard work of bank technology is easy.

150128bWhen a term like omnichannel emerges, the PowerPoints begin to crank up that illustrate breathtaking future visions of a seamlessly integrated technology environment. All of these slide decks show things like data warehouses, middleware and “enterprise buses” in the center of the page, promising that voilà! – a complete technology mess can be run through a blender to create the perfect customer experience. Bank executives have sat through thousands of presentations in the past 15 years hoping that their techies were serious about the promise of seamless integration. In many large banks, there are enterprise architects who spend most of their time going to meetings inside their organizations to share their wondrous future visions.

Here’s the rub, Gonzobankers. The blind hope in one technical solution is mostly a waste of time. Architecture and middleware are tools to help manage and improve the information technology environment, but their ability to create miracles is heavily oversold. One of the healthiest things bank executives can do is recognize that the promised land of seamless integration will likely never come in their careers. One of the greatest improvements in bank management would come if the sheer complexity of a bank IT environment was appreciated by those at the top. No matter what technology is employed, a totally seamless technology world will never be fully realized for the following reasons:

  • Technology changes quickly, and banks simply cannot change out systems as fast as technology evolves. The contemporary tools and technical specifications of today will be considered legacy five years from now.
  • Banks rely on hundreds of vendors that have no ability or interest in coordinating their technology architectures. The sheer complexity created by this diverse vendor environment is monumental.
  • Banks consistently overinvest in applications and underinvest in integration. It’s easy for executives to see a shiny new banking application and say, “Buy it!” It’s harder to direct resources toward the glue that holds the shiny banking toys together.
  • Constant regulatory compliance changes drown out resources in application development and often constrain just how the customer experience can be designed.

Today, chief information officers wake up every morning and do battle with dozens of critical applications that require updates, patches, error resolution and enhancements. With the resources tight, each day for the techie team is primarily a firefight, and there is little time to work on big picture integration tasks. In the name of career preservation, most technology groups resort to sharing an “omni” PowerPoint with their executives that will promise a future land of technology milk and honey. At least it buys them more time to fight more fires.

Embracing a Realistic Vision

My intent in blowing up the omni myth is not to depress bankers. Rather, I would encourage bank executives to change the way we think about and manage integration processes inside banks. Winners in the future will stop thinking of technology integration as a destination and more as a critical strategic process inside their organizations. Just as asset liability management is a daily process that never produces the perfect static balance sheet and investment portfolio, business integration must be an active and adequately resourced process inside the bank of the future.

Best practice banks will have the following key components to their business integration strategy:

  • A pragmatic future systems road map – Every bank should have a three-year plan that illustrates what application enhancements, replacements and integration initiatives require focus and resources. This process helps to coordinate vendor selections across business areas and provides opportunity to reduce complexity in the application environment.
  • Strong architectural standards for new system purchases – While technology standards change often, it is still important for a bank to enforce a requirement that vendors deliver solutions according to the bank’s technical specifications.
  • Heavy pressure on vendors to deliver integration capabilities – Banks are simply too passive in accepting empty promises from vendors about integration. CIOs need to become integration bulldogs, consistently putting pressures on vendors to deliver interfaces that use open web services frameworks and provide well-documented tool kits that allow for bank staff to integrate systems themselves. It’s amazing how slow these tools have progressed among the major core vendors over the past decade without invoking a riot among their user bases.
  • A dedicated business integration team – Banks often try to work on systems integration with part-time programming and database resources. Poor Jared and Zack in the basement group are working on database reports, intranet pages and a bit of programing between an ancillary system and the core system. Instead of this scarcity approach, banks need to staff their integration groups with a SWAT team consisting of a system architect, a database administrator, interface developers and business analysts. This group becomes a valued focal point for making systems “talk to each other” to create a more user friendly customer experience. Just as banks are building dedicated business intelligence teams, it’s time for further investment in business integration teams.
  • 150128cAn organizational focus on “Design Thinking” –  Sometimes in the rush to implement new channel and system capabilities, banks move with a “ready, fire, aim” approach. New web and mobile applications are often rolled out that are just plain clunky. In a world of slick Amazon and Uber interfaces, bank customers are saying “ho hum” to most self service capabilities. Industries outside of banking like software, retailing and consumer appliances spend a huge amount of resources and talent on designing long before the product is rolled out.Without getting too theoretical and cute, banks can bring design training to technology and business teams to enforce a better discipline in sweating all the tough details on new customer experiences. For a good crash course on design thinking, check out this great free offering from Stanford University.

Fight the Good Fight

The true Gonzobankers in our industry realize that buzzwords like omnichannel and promises of godlike tools such as middleware and enterprise service buses cannot address the complexity of our business alone. There is no technical panacea. The way forward to a more integrated customer experience is to get busy with pragmatic planning, frontal vendor management and the dedication of a talented SWAT team with a keen eye for design and detail. Those that stop thinking of omnichannel as an endpoint and instead focus on integration as a strategic skill set will find the real payoff in multimillion dollar technology and channel investments.
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Time to turn ‘omnichannel’ thinking on its head.

A bank’s technology solutions play a major role in its growth and success. If your institution has been drinking the Omnichannel Kool-Aid, now is a good time for a Technology Assessment from Cornerstone Advisors.

Cornerstone’s Technology Assessment can help you determine if your systems and processes are supporting the organization’s strategic goals. We can help you stay competitive – and leave Omnichannel Lala Land in the rear-view mirror.

Contact Cornerstone Advisors today to learn more.

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2 Responses to “We Will Never Get to the Omni Promised Land”

  1. Cloud computing was the buzzword 5 years ago. Today cloud computing is recognized as a viable alternative to in-house computing.

    All new concepts quickly become or get called “buzzwords” because mass education is one of the most time-consuming and challenging activities that can be undertaken. Without the constant drum beat and repetition of a concept, it dies. With it, the term gets demonized as a “buzzword” and not achievable.

    Consultants love to call new terms or concepts “buzzwords” and dismiss them because they are high-risk propositions that many do not have the desire to tackle.

    You indicate that there are no integration standards and solution providers do not want to connect to each other. I have to disagree. CUFX is a credit union integration standard that is making slow but positive progress. APIs and web-service interfaces happen every day in every industry including financial services. I will grant you that the vast majority of core banking system providers are discouraging connectivity, but even that will change through cooperative efforts or better integration tools and platforms.

    Omni-channel is real, it is coming and there are solution providers that are making significant headway.

  2. Love it. Harkens back to the days when DBMS was going to be the savior for financial services and Cullinet was going to lead us to the promised land. Nice job, Steve.

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