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A Customer-Driven Architecture for Banks - Learning from iPhone

Javelin Strategy & Research has released a new report that shows how it believes that financial institutions must create a Customer-Driven Architecture (CDA) that gives customers what research shows they want most: financial control. According to Javelin, "with many consumers’ finances in shambles, today’s economy is the perfect time to finally put customers in charge. The seven attributes of CDA outlined in the report shows bankers how to prioritize technology investments in order to achieve iPhone-like monetary control."

"Bankers must apply lessons from Apple’s iPod and iPhone retail strategy, revolutionizing service and delivery through integrated, personal technology that enables customers to be in control of their money at all times," said James Van Dyke, President and Founder. "Today’s first-generation financial services technology often places the customer’s needs secondary to the bank’s. The Customer-Driven Architecture can help banks rebuild customer service in recessionary times."

The report, The Customer-Driven Architecture: Interactive Financial Services Technology in the iPhone Era, also indicates that banks must rethink their customer technology to allow consumers to interact with accounts across phones and hand-held devices, desktop computers and retail stores.

"Recording-industry executives lost billions of dollars by fearing rather than embracing new customer-interaction methods," said Javelin’s Research Director Mary Monahan. "Banks must avoid the same fate. Apple reaped lucrative revenue streams by embracing new cross-channel customer interaction methods.”

Both traditional radio and banking allow music or transactions that consumers may not want. New interaction methods such as iPhone, iPods, Internet or even Twitter allow customer updates and personalization across all interaction methods in ways that meet highly personalized preferences.

"Banking will eventually resemble Apple’s retail music strategy in that consumers will select only the updates and transactions they want," Mr. Van Dyke said. "At leading banks, transactions won’t occur without consumers first enabling or approving them. As with music, individuals will get as much or as little information as they want – mostly through mobile and traditional Internet but also with physical branches or even ATMs."

The Javelin report also indicates that today's banking technology isn’t fully up to the task yet, but with the prescribed changes new levels of convenient, personalized, goal-oriented and safe services will become as common as an iPod.

Key Findings - The Customer-Driven Architecture: Interactive Financial Services Technology in the iPhone Era:

  • Six out of every 10 online consumers log into online banking every week.
  • One out of every five smart phone owners who banks via mobile uses mobile banking on a daily basis.
  • Increased always-on access constitutes a demand for several real-time transparent banking solutions, including instantaneous bill/check posting and real-time account information; embedded control options to search and sort financial information; all-in-one financial dashboards; and integrated information systems that reduce the cost of fraudulent activities.

”People will become accustomed to receiving texts, tweets or emails on an iPhone or Blackberry about payment transactions that are taking place right now. Consumers and business owners will then tell their bank that they want to receive more alerts like this one, or less like that one. Financial institutions need to start deploying customer-driven-architectures today to build transactions and loyalty, just as Apple has done. As financial services executives overcome the fear of relinquishing control, more individuals will gravitate to the providers that enable them to monitor and manage their money,” said Van Dyke.

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