• May 29, 2015

3 Years, 3 Things, 3 Industries

What Executives in Financial Services, Communications, and the Public Sector Need to Know

Before your enterprise transforms to the forward-looking future, it has to optimize on the near term. Indeed, the success of your 10-year plan could very well depend on the strength of your three-year strategy.

3 Years, 3 Things, 3 Industries | HP Enterprise ForwardIn banking, newer, more nimble competitors have entered the arena to raise the bar on service and profoundly transform the customer experience. Can the industry giants change quickly enough to fend them off? In telecommunications, new technology enables carriers to deliver services faster and more efficiently. Can carriers develop profitable new business models with these tools? In the public sector, the New Style of Business provides many opportunities to improve the citizen experience. Can governments match the level of service that citizens encounter in the private sector?

While all these industries face the same critical challenges of improving data security, accommodating mobility, and innovating to better serve customers and citizens, how each is taking on the challenges is uniquely their own. We asked experts in each industry to share their top three considerations for the next three years.

1 Financial Services: Competing With New Challengers

By Daniel Biondi, Fellow and Chief Technologist, Financial Services Industry, Australia & New Zealand, Hewlett Packard Enterprise

With innovative uses of technology fostering improved service, new entrants and some old-line brands are transforming the customer/bank interaction. Some new competitors are giants in other industries (e.g., PayPal, Google, Amazon.com, Apple, etc.) while others, such as Moven and Simple, are new entities. All of these organizations demonstrate that a traditional physical banking presence doesn’t necessarily equal success. Customers now expect better service at less cost, and financial institutions will have to adapt more quickly to the new environment or lose business.

To that end, financial services organizations must focus on the following:

3 Years, 3 Things, 3 Industries | HP Enterprise Forward

1. Digital Landscape

Digital transformation is rapidly shifting interaction from physical to virtual, from person-to-person exchanges toward person-to-machine or machine-to-machine. Coordination and integration among disparate, siloed channels will be vital to satisfying customer expectations. This includes how financial institutions work with their customers and ecosystem, and the underlying infrastructure and processes required to provide a digital experience. It is harder for banks to reconcile this digital transformation with their legacy platforms and the ways they have been doing business for decades. Conversely, start-ups have launched digitally without those legacy constraints. The takeaway is that all banks must excel at digital transactions and online services to serve customers anytime, anywhere, on any device, and deliver simple, seamless experiences.

2. Customer Engagement

Companies that embrace new digital technologies and revolutionize their traditional retail and service model have massive opportunities. Banks must use digital to enthuse customers about their offerings. While payments are the bank’s bread and butter, this is a small component of the transaction value chain. Offers such as cash back, discounts, rewards points, and insurance coverage help attract and retain customers. How does a bank ensure that it is providing what customers really want? Involve customers in the design, listen to them, and learn to think from their perspective. If banks give customers the ability to choose the services they want and how they want them to be delivered, the guesswork disappears.

3. Convergence of Industries—Banking, Telecommunications, and Retail

Consumers’ uptake of financial services provided by non-financial institutions is growing fast. Currently, most of these offerings are in areas such as payments, remittances, lending, and personal financial management. In this new financial services ecosystem, the primary touch points—and in some cases, the primary providers of financial services and owners of customers’ data—have been replaced by non-financial institutions. Meanwhile, financial institutions are often being pushed to the back of the value chain, acting as custodians of accounts and money. To mitigate the threats, financial services organizations must focus on strategies to improve customized services, innovate delivery systems, and enhance business processes. And they must foster an innovation culture to develop new products and service capabilities. While some innovative projects are bound to fail, lessons learned may lead to successful ventures. Small-scale pilot projects can be low-risk proving grounds. Successes can be scaled up, and failures should be studied for valuable insight.

Customers now expect better service at less cost, and financial institutions will have to adapt quickly to the new environment or lose business.

2 Communications Sector: Devising New Business Models

By Jeff Edlund, Chief Technology Officer, Communications, Media and Entertainment Solutions, Hewlett Packard Enterprise

Technology advances may disrupt traditional communication service provider business models over the next few years. More optimistically, some of the biggest opportunities the telecommunications industry has seen in the past quarter-century are ripe for the picking.

Carriers and media companies should be ready to exploit new service delivery methods and content. These three areas need attention:

1. The Innovation Opportunity

First will come the total transformation of hardware and operating systems composing telecom networks. Proprietary equipment will be replaced by off-the-shelf machines that run open-source software. Carriers will save money on capital and maintenance, but more important, new technology will open the floodgates of innovation. When carriers want to roll out new services, their current proprietary network solutions take at least three months (often considerably longer) to be modified to enable the desired capability. This complicated, costly process requires the alteration of many proprietary components, which discourages innovation. By contrast, new services on IP platforms can be set up through a simple software load in less than 30 minutes. This capability gives carriers the freedom to take many more risks since the cost of failure is low. The possibilities for new revenue-generating services are only limited by the imagination. Highly targeted pop-up seasonal services could be used to sell holiday-related programming and applications, for example.

2. The Security Challenge

There aren’t any major technological showstoppers to throw these breakthroughs off track, but a major challenge looms—securing services and transactions over the new, open-source platforms. These issues dog current IP networks today, and voice and mobile networks will have to address things like authenticating users (ensuring that you are who you claim to be) and securing mobile wallet transactions.

3. Ubiquitous, Seamless Connectivity

Another technology trend, heterogeneous networks, will allow mobile users to seamlessly move among networks—standard cellular to Wi-Fi to 4G—at will, unaware of the handoffs while they dance from network to network. This capability will extend the reach of mobile carriers and reduce the cost of mobile voice and data. It will also provide carriers with the ability to offer new services such as video telephony to compete with Skype and Apple’s FaceTime. Industry leaders should focus on customer experience and support innovation.

3Public Sector: Innovating Citizen Services

By Michael Conlin, Chief Technologist, Homeland Security and Defense, Enterprise Services, and Distinguished Technologist, Hewlett Packard Enterprise

While governments and agencies often lag behind business counterparts in implementing new technologies, they must step up efforts to drive new levels of support for citizens and employees.

Three key issues of focus are:

1. Improving the Citizen Experience

3 Years, 3 Things, 3 Industries | HP Enterprise Forward

Companies such as Amazon.com and Google are constantly raising the bar on internet-based consumer services. Each time citizens experience simplified, efficient services in the private sector, their expectations rise for dealings with all entities online—including government. For instance, retailers store basic customer information—name, address, credit card data—to make transactions faster and easier. Public sector users want the same convenience. Citizens want access to all services from any device—be it a kiosk, tablet, or smartphone. Adapting applications for mobile screens should be a top priority. As should cross-channel integration so citizens can start a government transaction on one device, continue it on a second, and finish it on a third.

2. Enabling a Mobile Workforce

Many government workers—public safety officers, transit agents, healthcare personnel, social services caseworkers—spend most of their time outside of offices. They need mobile access to the full range of applications necessary to perform their mission well. Unfortunately, most existing public sector back-office systems were created before tablets and smartphones became popular, so those systems cannot accommodate such demands. Under current architectures, these systems either cannot deliver the necessary information or they deliver it too slowly. To bring vital systems into the mobile age, agencies must consider rebuilding back-office systems.

3. Meeting Security Challenges

Mobile access raises the challenge of keeping sensitive information secure. Workers accessing data with more devices create additional avenues of potential infiltration by hackers. Numerous regulations governing data confidentiality in healthcare, law enforcement, and other arenas demand robust security solutions. The bottom line is that governments and public sector agencies must move into the digital age and accelerate their pursuit of digital relationships with citizens and employees.

Security Is a Universal Concern

Security must be an integral part of all new initiatives, not an afterthought.

Nothing can upend an enterprise’s efforts to respond to changing conditions more than security failures.

Many public sector organizations have treaded cautiously into the age of mobility due to security concerns. For example, often by the time a mobile device is certified by the government, the manufacturer no longer produces it. This response is much too slow. Processes essential to fostering mobility must be made more efficient.

Another major public sector security challenge involves the insider threat—individuals who have access to sensitive information. Federal agencies in the U.S. must respond to the White House Insider Threat policy. Other industries face similar challenges in preventing and detecting fraud committed by employees and business partners. Pharmacy workers and healthcare providers who commit Medicare fraud are just one example.

3 Years, 3 Things, 3 Industries | HP Enterprise ForwardMore seamless and open-network integration fosters more mobility and enables many great new capabilities, but it also creates new avenues for criminals. To mitigate the risk of insider crime, enterprises can detect threats early by monitoring activities and behaviors of workers without violating their constitutional rights. It’s a constant challenge, and technology should be part of the solution.

In telecommunications and financial services, the opportunity to generate more income and raise customer satisfaction from new services such as mobile wallets is compelling. Unfortunately, so is the opportunity for criminals to exploit such offerings. As a result, security must be an integral part of all new initiatives, not an afterthought.

Read more about mission-critical security issues in “Security at the Speed of Transformation,” here.