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How can a bank help individuals take charge of their financial futures?

People want to bank at their convenience – anytime, anywhere – and take an active role in managing their money. Some people are even looking at how they use technology in other aspects of their lives – from shopping to travelling to working and more – and expecting the same kind of tools and innovation from their bank. So how are retail bankers thinking creatively to help their customers take control of their financial futures?
 

Retail bankers serve the financial needs of the everyday person; they help build a foundation for their customers’ financial lives. With the basic building blocks of bank and savings accounts, credit cards, car and home loans, insurance and more,, we’re adapting to how people choose and access these services has. 

There has been a shift to self-service. Retail bankers see that some people want to do more themselves. Customers want to be able to control their own experiences – it’s convenient and efficient. Retail bankers are always thinking about how they can better serve customers. How can you empower the customer to make informed decisions and bank both when and where it is convenient for them? 

They also recognise, though, that people as well as technology make the experience. While some people may never want to go into a bank, others want  a live experience and interact with bankers in the branch. Retail bankers are shaping the way branches look in order to accommodate the usual tellers, advisors and greater number of ATMs with increased capacity to handle different transactions. So customers can come in and do their business quickly or talk with bankers if they have more complex needs and want face-to-face interaction.

As finance runs through everything we do, retail bankers need to think beyond just banking in order to find new ways to improve client service. They know their customers’ spending routines – buying their daily coffee or newspaper, or going for dinner at a particular restaurant. Banks are, therefore, now partnering with other companies to give their customers a seamless experience no matter where they want to use their bank’s services.

Retail bankers are focused on their customers – helping them take charge of the financial lives, however they want to be served.

 

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Produced by (E) BrandConnect, a commercial division of The Economist Group, which operates separately from the editorial staffs of The Economist and The Economist Intelligence Unit. Neither (E) BrandConnect nor its affiliates accept any responsibility or liability for reliance by any party on this content.

How does digital innovation do more than just allow people to bank anytime, anywhere?

When most people think of digital banking, they think about conveniences like being able to take a picture of a check and digitally deposit it, rather than having to go into the bank. But digital innovation is happening across all bank functions, not just the day-to-day banking conveniences customers like you and I see. How else is it improving service to clients of all types, whether individuals or companies, and making the bank itself more efficient and secure?

Digital innovation in banking is being driven by artificial intelligence (AI) and automation, big data and data analytics, cloud computing, blockchain and the Internet of Things (IoT). 

AI allows computers to learn from data to make predictions or decisions. Automation can do tasks or solve problems based on those predictions or decisions. It can perform some specific tasks better and faster than humans, which frees us to focus on more complex tasks. So far, in banking, it has been used to give customers a better user experience (for example, a chatbot giving an immediate answer to a frequently asked question), as well as in risk and compliance areas like trade surveillance and fraud detection.

AI needs a lot of data to create the models it needs to make accurate predictions, which is where big data comes in. AI learns from ‘big data’, which is basically large amounts of data that are aggregated and analysed. Data analytics helps banks better understand their customers, markets and the wider world. AI can support more personalised service for customers or more accurate, faster trades; but it also is being used in areas like risk management to strengthen controls and reduce costs.

Cloud is an internet-based model for delivering IT services, allowing them to be deployed anytime, anywhere. This significantly reduces costs for a bank and enables it to roll out and scale up new services quickly. It has been used mainly for online and mobile banking services or to allow a bank to outsource (for example, to other service providers with more advanced technologies). 

Blockchain (also known as distributed ledger technology) is a virtual, public database that records everything in a secure and transparent manner. The technology was initially used as the basis of cryptocurrencies like bitcoin by enabling online, peer-to-peer exchange. It can be used to securely record any information, which means there are many possibilities as to how banks can use it – such as data management, processing payments, trading, verifying customers’ identities, trade/contract validation and more. 

The Internet of Things (IoT) is a network of internet-connected devices that can be embedded into physical devices to collect data and share it across the web, allowing that data to be monitored and measured. So far, IoT has been used more by industries with physical products like phones and cars or services like healthcare monitoring. Wearable fitness trackers are probably the best-known IoT-enabled device. It is still early days for IoT in banks, but innovation is focusing on how to use it for customer convenience. For example, allowing people to use their wearable device to make secure contactless payments or getting bank research on stocks through their voice assistant.

These examples demonstrate how software engineers in banks must understand both the technologies changing our world, as well as the business of the bank itself. Only then can they develop the improvements that help the bank and its customers. 

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Produced by (E) BrandConnect, a commercial division of The Economist Group, which operates separately from the editorial staffs of The Economist and The Economist Intelligence Unit. Neither (E) BrandConnect nor its affiliates accept any responsibility or liability for reliance by any party on this content.

How does a bank help turn a small business into an industry giant?

Imagine working on the big deals that are covered on the front pages of newspapers. Who are the people who turn big ideas into big companies, help them ‘float on the stock exchange’ or to buy a small firm that has capabilities that they might not? These people can be found in an investment bank, analysing industry trends, speaking to new clients and helping grow their businesses.
 

The executives who walk through the doors of an investment bank will lead businesses of different sizes in a wide range of industries. Once their company reaches a certain size and needs a substantial investment in order to expand, or if the original investors want to sell, a chief executive may need to take his or her company ‘public’. Most big business around the world are public companies, meaning that their shares of the company are listed on a stock exchange that anyone can buy and sell. 

Listing on a stock exchange is not simple, and this is where investment banks help. Investment bankers provide that support, guiding businesses through the process of an Initial Public Offering (IPO) and making sure the IPO is a success with investors.

A company will choose an investment bank based on reputation, expertise and distribution (i.e. how strong the bank’s relationships with investors are), as well as its prior relationship with the bank. That prior relationship can be important, as investment bankers need to get to know the company inside out. Investment bankers will spend months meeting with the company’s senior management, learning how the company operates and going over its financial records to make sure they are ready to face tough questions from investors and regulators.

Investment bankers not only work with the company going public but with the investment community as well, to make sure they understand and can get involved in the IPO. They will prepare guides on the company before heading out on roadshows to speak directly with large investors to generate interest in the company. They will speak to analysts to ensure they will cover the company in their research, which is a vital step, as many investors rely on the buy and sell recommendations of top analysts.

Investment bankers also set the price of the company’s shares when it lists. They do this by asking their equity sales teams to talk to big institutional investors and see at what price they would be prepared to invest, and they talk to analysts who cover the company’s sector in order to figure out a reasonable price. This has to be balanced with the company’s needs, though. Its management decided to go public for a reason (to raise capital to expand, to buy out early stage investors, etc.), and its investment bankers need to make sure those capital needs are met.

The job of an investment banker does not stop when a company has listed. Through Mergers and Acquisitions (M&A), investment bankers can help companies to sell parts of the business they no longer want or to buy another company that would bring in capabilities that it does not have. It is a similar process to an IPO – getting to know the company and putting together information on it.

See how far your thinking can go

 

Produced by (E) BrandConnect, a commercial division of The Economist Group, which operates separately from the editorial staffs of The Economist and The Economist Intelligence Unit. Neither (E) BrandConnect nor its affiliates accept any responsibility or liability for reliance by any party on this content.

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Produced by (E) BrandConnect, a commercial division of The Economist Group, which operates separately from the editorial staffs of The Economist and The Economist Intelligence Unit. Neither (E) BrandConnect nor its affiliates accept any responsibility or liability for reliance by any party on this content.