The ultra-low interest rate environment and fee compression in areas like payments continue. Competition from challengers and fintechs is intensifying. Customer digital adoption has grown, and the bar of expectation continues to rise.

The impediments to change that traditional banks face are not going away - high cost-bases, inflexible and complex legacy technology estates, and operating models that lack customer-focus and agility.

Banks face the imperatives of increasing and diversifying revenues, optimising costs and increasing business agility. In this article, Simon Hull, Head of Financial Services at BJSS, looks at the revenue challenge and why smart use of digital technology is the key to success.

Revenue drivers

Banks are looking to win new customers, retain and maximise business from existing customers and diversify the traditional deposit and lending business with fee-based products and services. Some of the key elements banks are focusing on in this respect are customer experience, customer intelligence, and product and service range.

Customer experience is a battleground and competition is intense. Last year's Ipsos Mori poll has Monzo and Starling coming out ahead on many customer service metrics. Digital channels are becoming primary. Customers are attracted to slick and intuitive digital experiences and expect increasingly personalised service as banks learn more about them.

However, the empathetic human touch is still essential, as is the consistency of service across in-person, phone and digital channels. Customers want the choice of channels to use for different tasks, and preferences differ across demographics. The brand experience is just as significant, with social and environmental responsibility top of the list. The combination of service and brand will drive loyalty and recommendations.

Customers want the choice of channels to use for different tasks, and preferences differ across demographics.

Customer intelligence is about gaining a deep, holistic and continuous understanding of the customer - their needs, behaviours, preferences and influences. With this, a truly customer-centric operating model can be created - one where product and service development, marketing, distribution, and customer service are aligned and evolve alongside the customer. This enables a broadening of the relationship to maximise customer wallet share by tailoring to their needs to build multi-product relationships.

Banks need to assess their current product and service range, consider discontinuing low volume or low profitability products, and ensure the rest are available on their digital channels. In parallel, banks must move to an agile product and service development model to enable rapid innovation based on customer intelligence. This will help sustain and protect revenues as needs change and diversify into fee-based products, as many major banks are doing in areas such as financial advice, wealth management, insurance, point-of-sale financing and subscription models.

Digital technology solutions

Digital technologies, used in the right way, hold the key to delivering these three revenue drivers.

Investing in user-centric design is critical for banks to understand customer needs, jobs to be done and interaction preferences. Web and mobile digital technologies power responsive and real-time banking apps, compelling user journeys and more frequent interactions and alerts. They are also a critical source of customer data which can be used to refine interactions and develop new products and services iteratively. Banks should move their full product and service range onto their digital channels, and also focus on customer education and self-service. The same technology can be used to digitally enable branch and call-centre staff, creating more informed and rich customer interactions.

Data and AI is really the heart of digital customer-facing banking. Capturing and combining datasets involves both making the vast troves of data stuck in siloed legacy systems available, capturing real-time customer data from digital platforms and also bringing in additional third-party sources. AI can be used to join the dots and identify patterns to better understand and predict needs, which can drive timely interactions and personalised products and services. It also enables a better understanding of personal situation and risk, prerequisites for new services such as wealth management and insurance. Broadening the model of the customer extends the opportunity to establish multi-product relationships. This generates more interactions and data, so a cycle of continual analysis and innovation is formed.


AI capabilities can also be combined with RPA to enable Intelligent Automation of many customer service tasks such as standard enquiries that can be handled by conversational AI. Highly responsive, accurate and information-rich conversational interfaces improve the customer experience. This in turn, enables staff to provide a better customer service by focussing on personal service and higher value or more complex needs.

Cloud is a crucial enabler of much of the above in several ways. The inherent agility of cloud-based services enables rapid innovation and the delivery of new services and features through microservices. Elastic scalability enables the platform to adapt to usage expansion and maintain responsiveness under high load. Native out-of-the-box data and analytics capabilities will accelerate the AI journey. The fast provisioning of new environments supports an agile product development methodology.

For traditional banks, legacy modernisation must feature in the digital change programme. Legacy systems can negatively impact the speed and cost of change. Modernisation must be prioritised, and iterative strategies applied such as facading systems behind APIs, breaking out elements of monoliths as standalone reusable services and cloud migration. Legacy systems contain critical data that is needed to build a holistic customer view. Modernisation of the change function to a customer-centric agile model is a broad enabler for all revenue-generating activity.


The industry is at an inflection point, and banks face a considerable challenge to drive revenue opportunities. The key to success is precision of focus on business goals and aligning the right digital technology combinations to deliver on the customer experience, customer intelligence and rapid product and service innovation goals. Banks are at different stages on this journey, and of course, revenue must also come with profitability. Hence, costs are another challenge that must be faced in a similar way.