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From both a business and a vendors’ perspective, the term ‘client reporting’ is increasingly inappropriate and lacks the necessary ambition to be effective in today’s investment management world. This situation is partially as a result of the terminology that the function uses and the perceived lack of added value within the client reporting process.

Essentially, many of the reporting solutions on the market today are largely designed to solve existing problems, such as the automation, control and governance of the current client reporting and sales information. For almost every firm within investment management though, be they institutional asset managers, retail asset managers, wealth managers and even private banks, the focus should no longer be about client reporting; the emphasis has shifted to improving the client experience: ‘going digital’, using technology to improve the business model and enhance the client interactions with the investment manager.

Client reporting is one facet of an ever-evolving requirement and firms need to stretch their vision and ambition accordingly. In the current operational structure within most investment management firms, one of the areas of the business that is closest to client needs and demands is the Client Reporting team.

Artificial constraints

Due to the fact that this area of the business calls itself ‘Client Reporting’, however, I believe it has become bound by the artificial constraints and limitations associated with the label. In fact, the reporting function is well positioned to expand its role and even place itself at the middle of this process of managing the entire client experience.

In recent times the client reporting label has often been replaced by ‘client communications’, but this is equally problematic since it is not really clear what this term entails – it is so broad as to be meaningless. The reality is that many of the existing vendors and business areas are still providing the same data sets in a relatively uninspiring and restrictive manner. To some extent this is due to the fact that their user community is focused on the production of the current reporting requirements, and managers of Client Reporting departments are rarely focused on future needs and market changes. It is clear to me though that the winds of change are starting to turn.

As the ATM is turning 50 this year, it is at the centre of a massive overhaul of the retail banking landscape. Banks have to completely rethink the way in which they interact with their customers while the digital revolution is taking hold of the sector. The speed at which this change is happening is breath-taking: Data company CACI predicts that the total number of mobile app log-ins by banking customers are going to increase from 427 million in 2015 to 2.3 billion in 2020, while the number of bank branch visits is expected to almost half to 268 million per year over the same period.

With the banking revolution right under way, most ATMs today are still based on a ‘cash and dash’ model with limited additional functionality. However, with the right software strategy, they have the potential to become a cornerstone for the omni-channel banking world as the last remaining touchpoints for banks in the majority of local communities.

Our survey of 13 major ATM operators, representing over 250,000 ATMs in 30 countries, shows that the industry is held back by IT challenges, with the largest one being the continuous change in operating systems. Every time a painful operating system change has been concluded successfully, the next one is already looming on the horizon. Software changes are a challenge in and of themselves, but if they also require changes to the core of the ATM IT hardware – the PC –, the costs for what is basically just a compliance initiative can be very high. The industry’s second biggest nut to crack is change management, as rolling out new functions requires long development times and complex integration with the existing, ageing host systems. Finally, with the sophistication of large scale attacks on the rise, security, especially around malware, is a pressing issue that the sector is currently trying to solve.

The fact of the matter is that the ATM industry needs to re-think the underlying architecture of its systems if it wants the ATM to stay relevant in a modern banking world. The answer to this problem can only be to move away from PC-based hardware to a cloud based model, which would give the ATM technology that is out there the breathing space to innovate at the same speed as other channels such as mobile banking.

In a cloud model, the role of the PC-core is reduced to manage the user interface, while the cloud controls the cash dispenser. This provides a higher level of security as the nerve centre is taken out of the ATM and placed within a safe distance. What is more, ATM functionalities could be based on an ‘app’ approach, which would speed-up product development and allow banks and ATM operators to add more features at lower costs.

Rethinking the system architecture under these premises will allow the ATM to develop its full potential rather than continuing to be a simple ‘cash and dash’ facility. Moving to the cloud would be a natural (and potentially vital) development for the ATM industry and the financial services sector as a whole. The first step in this direction would be for operators to agree and implement a standard API, which would provide a set of protocols for building software applications, specifying how software components should interact.

Cloud technology is high on the agenda of the next industry event ATM and Cash Innovation Europe and there are various other initiatives among the industry that are already well under way; all of which shows us that the cloud is the direction of travel for the ATM of the future.

Eric de Putter,

Managing Partner

Payment Redesign

Entitled. Lazy. Narcissistic. Me, me, me. If you threw those descriptors at anyone  on the conference circuit in finance today they’d know exactly what you were talking about. “Millennials”, the tagline that’s a gift that keeps on giving for speakers and strategists. Banks “need” to target Millennials, they say. Give them selfie-pay, give them emoji-themed UIs, give them “bae” and “fleek” and watch them flock to your brand.

What banks and those who perpetuate this gross misunderstanding need to realise is that it’s not just wrong, it’s downright counterproductive. Many times, I’ve sat in a conference hall full of middle-aged bankers and technologists and watched as they tell me what I want. Yes, I am a Millennial but I’m also an individual. Just like not every baby boomer is to blame for the crash of the global economy, not every Millennial loves to take selfies and eat avocado on toast.

Not all snowflakes

As explained by the exceptionally concise Adam Conover, the easiest way to connect with a Millennial is to treat them like every other customer. If you respect their needs, talk to them as if they’re intelligent, well-rounded people and offer them services they desire, you’re going to get on great.

“But,” you may say, holding up the results of yet another survey into the wants and needs of the 18-35 age bracket, “Millennials want rewards, cashback, mobile-first services and convenience.” Why shouldn’t you give them those things?

The answer to that is “of course you should” but why target just Millennials? Those needs are cross-generational. In the UK, 69% of 18-24 year-olds use mobile banking, but 44% of 45-54 year-olds and 30% of 55-64 year-olds also use their mobile to do banking. Customer priorities across all age groups are ease of use (46%), speed (46%) and layout and design (41%).

Banks feel like they need to change their ways to entice young people to their side, worried by the high rate of attrition, but don’t realise that “Millennials” are just as loyal to banks that offer them the services they require. In the US, young people have a higher wallet share with their primary bank than any other generation. When a bank or credit union is found to engage with those users, they experience a boost of 25% or more in wallet share.

Not-so big spenders

The myth of the butterfly-minded young person, flitting from bank to bank spending money on games consoles, mobile phones and Starbucks needs to be addressed, too. 70% of “Millennials” are already saving for their retirement. According to FICO, they’re are also more likely than to have a home equity loan or line of credit, a credit card, financial planning or advisory services or a home mortgage loan.

While research from “The Millennial Mind” (urgh) says that 1 in 3 young people are considering switching their banks, more than half say that their bank isn’t offering anything better than the competition. Another half are looking for technology start-ups to overhaul the industry. Why is that the case? Banks have traditionally never taken a human-first approach to customer interaction.

Technology firms are offer personalised services that interact with their clients at every opportunity. Those in the age bracket of 35 and below are one of the most diverse segments of the global market. In the US, 42% of them identify as non-white, 15% are first-generation immigrants and the population identifying as Hispanic has tripled.

Banks need to re-engineer the way they operate to deliver mobile, personalised and targeted services to all segments of the market. Reducing the needs of one of the largest target demographics to “give them apps, give them selfies, give them shiny things” is a folly. Trying to lump them under one moniker and sell to them as a group, as opposed to a collection of individuals, is a road to failure.