Intelligent data distribution ignites bank’s digital transformation

Customers demand a personal touch, flexibility and reactivity from their bank. Simultaneously, the back office is required to deliver on other qualities, in particular stability, reliability and security. Consequently there can be tension between the customer facing front office and the back office. Is there a solution to this tension?

Spoiler alert: yes, there is a solution. A mortgage quote within a day of application, for example: it can be done. Value-adding services in the daily banking app, such as ticketing for public transport: it can be done. The crux is that the changing needs at the front end are neatly and intelligently linked to the requirements at the back end. Doing so, front- and back-office services remain independent and decoupled services whilst providing a connected experience.

This solution entails a next generation orchestration layer that provides this intelligence. The technology understands how the incoming requests at the front should be distributed across databases, applications or other system components at the back to return the data and to fulfill the request. A modern orchestration layer like this, is a layer full of business intelligence, process logic and other smart software that intelligently composes the service that customers need.

Through this orchestration layer, the different, and possibly even conflicting, objectives of the various parts of the bank can be balanced. This need has become more and more important, because the demands and expectations on both sides have only increased. Customers increasingly expect to be presented with a seamless and personalized experience, comparable to the way they are served by major e-commerce retailers and social media platforms. Additionally, risk management is ‘all over the place’. For instance, internal, external and regulatory reporting requirements become stricter including requirements on how data is captured, processed and delivered in reports. To achieve this, the back office therefore likes robustness, and consequently does not like change.

The expectations between front and back office have therefore only increased in recent times.

The intelligent orchestration layer is an essential solution to ignite the digital transformation and allows the expectations to be fulfilled. Subsequently, this layer can be used not only to streamline existing services, but also to integrate in all kinds of new services, including those of external (financial) service providers.

Furthermore, it allows to increase the rate of change, as complexity reduces. If the orchestration layer is in place, changes are not performed on the complete landscape, but in isolation on a subset of components. Therefore, this orchestration layer is an indispensable part in the digital transformation that banks are going through if they want to become a Connected bank.

Connected is KPMG's approach to that digital transformation and is all about collaborating, joining forces and creating and participating in the ecosystems with the objective to fulfill the customer’s interests. Five different perspectives or 'lenses' are important to determine how the bank will proceed in this regard.

• The customer perspective is central, meaning Connected banks put the customer first in all activities.
• Via the lens of market dynamics banks get an outside-in view on the banking services industry.
• Additionally, employees are day-in-day-out working to optimize the customer experience.
• Partnerships create the opportunity to combine, embed and rebundle a broad range of services across the banking domain. For instance leveraging external data providers.
• Front, middle and back office capabilities are integrated by Connected banks, ensuring that all elements of the operating model including technology stack live up to the expectations of all other lenses.

When improving orchestration within the banks we suggest to continuously take these five lenses into account towards realizing a Connected enterprise. The orchestration layer may be designed primarily with the latter lens in mind, but in fact it is the main instrument to give substance to all five lenses and also the eight capabilities in the Connected-approach.

KPMG would be happy to discuss with you how to achieve this in your banking organization.