2021 marked the 15th year of Celent’s Innovation & Insight (I&I) event. This annual gathering celebrates excellence in technology innovation across the world of financial services, honoring the best-in-class technology for banks, insurers, wealth management, risk professionals, and market infrastructure.
Inspired by the innovation demonstrated by our Model Award nominees, our I&I event itself continues to evolve. In 2020, just as the world was adapting to the multifaceted impact of COVID-19, I&I Day moved online. The 2021 event grew to a three-day (March 9–11) virtual summit filled with live presentations; the announcement of Celent Model Awards, complemented by case study videos from our winners; fireside chats; and breakout sessions. Thank you to all of who made Innovation & Insight Week 2021 a success: award nominees and winners, attendees, event sponsors,presenters, and Celent colleagues.
Here I share a look of some of the week’s top takeaways. I hope that you’ll explore the many free materials on the Innovation & Insight Week hub page. On-demand access of this year’s content includes:
- replays of interviews and live sessions,
- videos from award winners, highlighting their innovative implementations,
- links to case study reports (Celent subscription required for case study downloads), and
- additional information about each of the Innovation & Insight Week 2021 sponsors.
2021’s Major Theme: Acceleration
Technology innovation isn’t just surviving. It’s thriving—even in this rather weird pandemic year. The financial institutions (FIs) that have been most successful over the past 12 months are using or are preparing to deploy technology to maintain customer trust, relevance, and intimacy. And they’re doing so at speed. This year we’re seeing accelerated time-to-market, rapid new technology deployment, solutions that build customer trust, and more.
When I&I events launched in 2007 (the same year as the iPhone), the average implementation timeframe for projects was 2.6 years; the average implementation time for the top 80% of 2021 submissions was just 10.2 months. Though it isn’t an apples-to-apples comparison, due to the nature and number of submissions, the reduced time is striking. Similarly, timeframes accelerated for projects with customer-facing offerings. Straight-through processing (STP), for example, was a major theme in 2007, with one project that year expediting credit-card issuance from 45 to 7 days; today’s best-in-class issuance is same-day, with mobile sign-up and immediate delivery of a virtual card.
Many advances are speeding today’s tech initiatives. Having a good platform in place is an important start. API-enabled partnerships facilitate the journey. Cloud tech stack adoption is growing, as is its importance for financial services. Data analytics capabilities, with a focus on artificial intelligence and machine learning (AI/ML), are improving both the customer experience (CX) and risk mitigation. Best practices for risk management are easing the data, platform, and organizational challenges that are present for FIs.
In 2021, in response to the pandemic, banks are more agile, prioritizing customer onboarding, cost management and operational efficiency, and digital customer servicing. The current demand for digital banking, for example, is at a level that most banks hadn’t anticipated reaching for at least three years. Insurers are reaching for new technologies, with rapidly growing use of collaboration tools (for use with customers, internal stakeholders, and partners/agents), video communications, consumer messaging apps, chatbots and virtual assistants, and other emerging technologies. Just as these realities helped drive the accelerated innovation we’re witnessing at present, the impact of COVID-19 isn’t going away in 2021. It will continue to be a major influence and a major driver of innovation for FIs.
The Customer Journey
When drive-in banking was first introduced, customers needed to be walked over and shown how to use the new devices. In the wake of the pandemic, this serves as a fitting reminder: FIs must still provide customers with appropriate guidance on new technology. Training customers helps ease them along the path of transition, facilitating adoption of new technologies that meet their needs, improving the overall customer experience, and delivering sustainable profitability.
Data can enhance the customer journey and experience across digital channels (e.g., online, mobile, social, etc.) and physical channels (e.g., branch, etc.). Offering the kind of experiences that customers—be they buyers, employees, agents, or beneficiaries—are looking for requires new ways of orchestrating that data. Enabling technologies (such as AI) don’t create a strategy in and of themselves, however.
As you evaluate your own strategy for improving the customer experience and overall customer journey, consider some of the lessons from across Innovation & Insight Week 2021:
Dan Egan, director of behavioral finance and investing at Betterment, advised each of us to understand what the client is trying to achieve. FIs must look at the entire system, then remove friction to help deliver goals that resonate with the consumer.
- Digitization and customer-centricity go hand-in-hand. In a poll during the insurance session, participants were asked to identify the top focus of their digitization efforts. “Improving customer experience” took the clear lead with 63% of responses, far ahead of “faster processes” and “becoming data driven” (15% each) and “cost reduction” (7%).
- From front to back office, the customer journey matters. Model Bank nominations, for example, highlighted how some banks accelerated digital transformation procedures that were already underway, moving quickly to overcome travel restrictions and social distancing that impacted bank staff and customers alike. One bank stood up a COVID-oriented virtual assistant in three weeks, accelerating its digital self-serve strategy by two years.
- Customer experience transformation is one of the few ways to create differentiation for policyholders, as highlighted during the insurance session. Legacy technology can inhibit innovation. Instead, insurers must enable the back end to handle customer requests more efficiently, while also ensuring that the customer experience is cross-functional and rooted in the emotional journey.
- In wealth management, the past year highlighted that that digital marketing is the cornerstone of an advisor’s marketing strategy. As such, a functional website can serve as the foundation to an advisor’s digital engagement strategy for an effective client experience.
- Relying on a robust third-party ecosystem to offer bold new products, while reshaping cost structures, can help FIs excel. This ecosystem approach keeps client engagement top of mind, as highlighted by our corporate banking segment.
As your own institution focuses on helping customers along their journey, consider:
- What’s important to your customers?
- Do you measure it?
- Do you act on those measurements to make improvements?
Congratulations! Celent’s 2021 Model Award Winners
What would it look like for a firm to do everything right with today’s technology?
This is the question that Celent’s annual Model Awards seek to answer, recognizing excellence in technology in the financial services industry. Winning entries highlight real world examples of how technology drives innovation—particularly during uniquely challenging times, as proven during the COVID-19 pandemic.
Celent received more than 300 entries from 47 countries during the nomination period, which closed in October 2020. Our 50 Model Financial Institution winners honor recipients in 19 countries, demonstrating ways in which innovation can be shared across the world.
Celent Model Bank 2021 Awards: The 2021 Celent Model Bank of the Year is Varo Bank, the first fintech to obtain a US bank charter, in August 2020. Initiatives from an additional 19 financial institutions won Model Bank 2021 awards. Our overview report, Innovation in Banking 2021: A Snapshot Through the Lens of Model Bank, provides insight into the state of the banking and payments industry, as reflected in this year’s more than 150 nominations for the Model Bank awards.
Celent Model Insurer 2021 Awards: AXA XL was named Celent Model Insurer of the Year 2021 for its construction ecosystem project. Seventeen additional Model Insurer 2021 awards were given in the categories of Data, Analytics and AI; Legacy and Ecosystem Transformation; and Digital and Emerging Technologies
Celent Model Risk Manager 2021 Awards: Digital and next-generation technologies were dominant among winning initiatives for risk management and compliance operations, many reflecting the need for holistic monitoring capabilities that can help move beyond siloed functions. The Model Risk Manager of the Year 2021 is Credit Suisse, in recognition of its Risk360 advanced risk analytics platform.
Celent Model Sell Side 2021 Award: RBC Capital Markets was recognized for its AI-based electronic trading platform, Aiden.
Celent Model Wealth Manager 2021 Awards: The 2021 awards recognize excellence in the client experience, use of emerging technology, and innovating products/platforms.
To set up a meeting with one of Celent’s analysts, please message us or connect with us on Twitter (@Celent_Research, #IIWEEK2021).