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Money20/20 Live: Breaking Barriers in Banking: Amdocs' Approach to Personalized Services at Money20/20 EU
What if banks could cater to your entire family's needs with the same precision and care they offer individual clients? This episode of The MoneyPot promises to reveal just that as we bring you an enlightening conversation with Eyal Gilad from Amdocs. Discover how Amdocs, originally rooted in telecommunications, has made a groundbreaking leap into financial services, with a new focus on family banking. Eyal shares the secrets behind their success, including leveraging their cutting-edge charging capabilities to revolutionize customer segmentation and create personalized banking experiences for multi-generational households. You'll learn how these innovative strategies are not only breaking traditional banking barriers but also significantly enhancing customer loyalty.
In this packed episode, we also broaden our horizon to explore the latest trends and challenges in the banking industry. We'll delve into financial literacy initiatives and certification processes that different banks are implementing across the globe, from Canada and Europe to the Philippines. Our guest, Eyal, sheds light on exciting projects and the cultural and regulatory hurdles they face. Plus, get an insider's view on how Amdocs is investing in no-code and low-code solutions to empower business departments to swiftly launch new products, bypassing the heavy reliance on IT. We wrap up by discussing the integration of legacy technology with modern solutions to boost efficiency and drive innovation in the banking sector. This is a must-listen episode for anyone interested in the future of family banking and beyond!
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Welcome to the Money Pot. My name is Rachel Morrissey. I am one of the hosts of our illustrious podcast here at Money 2020. And we are here today with Ayal Gilad and he's with A and we are going to be talking today about kind of the transition that Amdocs has taken and their shift to kind of family banking. So first of all, let's just start with the baseline. Tell me a little bit more about Amdocs and where you guys started.
Eyal Gilad:So we are by far the market leader in telecommunication system enabling, supporting customers and operating support system for networks. Around 20 years ago we started our diversification journey into other industries. We selected financial services as this segment, so we started with choosing part of our technology enablers. To accelerate this journey, we identified the need in banks to support charging capabilities. That we are very strong at fee calculation, interest calculation and took it from there forward.
Rachel Morrissey:Okay, so let's talk a little bit about where you are today. So talk about family banking, and does Amdoc serve any other segments?
Eyal Gilad:Yes, absolutely. I mean family banking is just one use case that we are very proud of, but obviously just represents our belief that the banks can benefit a lot from treating differently their target market, segmenting it in a wiser way, providing to each market segment the desired experience that this segment is looking for, instead of just trying to look at the retail as one holistic target. So we have also other use cases which are quite interesting, but we will, yes, focus on family first.
Rachel Morrissey:Yeah, so let's talk a little about that. You just said you segment it in a different way. You guys come in with kind of fresh eyes and think about it a little bit differently. So when you came into banking, how did you guys do it that you thought there might be a different way to look at this?
Eyal Gilad:Yes, there was. Our biggest challenge, coming from other industry, is to come and break the barriers that traditional banks are looking at. So when we came and asked legitimate questions things that are already commoditized in other industry and the banking experts are coming to tell us, okay, yes, but in banking we cannot do it, either because of technology barriers or because of regulation barriers, and we are coming and asking the questions differently. We believe that, despite the known limitation, there is a way to provide better experience for banks, for banks to be more creative in achieving their goals, to come with new commercial models, monetize better. This is why we're here. We believe this is our mission to help the banks achieve it.
Rachel Morrissey:Interesting. Okay, so when we are talking about family banking, that has a lot of different connotations depending on what geography you're in. In the US, we don't even call about family banking. That has a lot of different connotations depending on kind of what geography you're in. In the US, we don't even call it family banking. I'm not even sure that we have a term like that. That feels very much on this side of the pond, and so I'm a little bit curious, like when you are doing that, what are you looking at as? How are you guys defining family banking?
Eyal Gilad:We're looking at it from two dimensions. First of all, we are coming from the direction of the customer. So we're looking into and we're interviewing a lot of customers what is their expectation from the bank, how they can be served better from the bank, how the multi-generational household can be better served, feel more cherished by the bank that he was loyal to for the last tens of years. So this is one dimension that we are interviewing customers and building our targeted experience based upon the customer expectations. On the other hand, we're looking at the banks themselves what they are trying to achieve and obviously they're trying to get a higher level of customer loyalty to make sure that they are having a smoother path into the retention of their existing customer base, as well as making sure that the younger generation will stick with the bank following their parents, grandparents.
Rachel Morrissey:So basically, you're building in customer loyalty. You get them young, you keep them in so as they gain and they grow their own bank accounts, they grow their own families. This keeps on extending over generations. I mean that's a great loyalty.
Eyal Gilad:This is the basic. There's more sophistication behind it, but, yes, this is the higher purpose.
Rachel Morrissey:Okay, so what would be in the suite of these tools?
Eyal Gilad:It's all based upon very rich data repositories. Obviously we are creating the models because we're coming with other industry that is so trivial to treat the customer as a holistic unit and to try to leverage on it, try to monetize on it, injecting the uniqueness of the banking industry into it, trying to inject kids' education, trying to inject transparency between the household members, trying to put controls measure in some hands strict on the other hand, create the desired level of transparency between the household. All those things contribute to a lot of variety of use cases that the family members find very appreciative.
Rachel Morrissey:So I know that you said that you found they find them appreciative. You've also talked about you're talking to customers all of the time, trying to figure out what their use cases are. So where is the need for a family banking account? Where is that driven from? What are the problems that you're helping customers solve?
Eyal Gilad:When we interview a customer, they find that with each interaction in the bank, it doesn't matter where the constraint is coming from. They are being treated as a new customer, either it's for a new banking product or when they are trying to get a service, or when they are trying to open a new account. And we are trying to smoothen these processes. We believe that it's mandatory. And we are trying to smoothen these processes. We believe that it's mandatory Also for the sake of securing that the household business will expand with the bank, but also that the overall experience will be much nicer and smoother.
Rachel Morrissey:So you're finding that over time, every time a new generation would come in, it didn't matter how long your family had banked there, it didn't matter what kind of history they had with the relationships Because in the US I mean we don't really think of I mean people most likely bank where their parents banked. They most likely get an account where their parents got an account. Maybe they branch out and they go get another account in someplace else or maybe they go get financial services from someplace else, but that initial bank account is almost always tied to where their family banked, because it's familiar, it's easy, right. So I'm assuming that's very similar here. But you're saying that every time they went in it didn't matter that they were traded like they were brand new, not like an extension of a customer base that already existed look in today's world, when moving into branchless yeah environment, I'm not so sure that the habits that you mentioned are going to keep happening.
Eyal Gilad:It's not that you're going to the branch and you're going to the rep that you walked in for the last 20 years and he's helping you to open the kids account. Today is different yeah in the digital world, you need to have the right enablers to allow onboarding the kids, other products that you are interested to acquire in a smoother way and to make sure that also the younger generation will will stick with it.
Rachel Morrissey:So what tools are you guys implementing for the financial education of these kids? Because that was one of the customer wants right, A checklist that you were meeting. So in those tools, how are you approaching the education of the next generation?
Eyal Gilad:Well, we have a set of. First of all, I will appreciate if whoever listens to us right now will come to our booth, and we have some very nice demos to demonstrate everything. But we are working with um, not just uh technology designers we have a unit in the company which are coming from a psychology background and they developed a set of flows which allows families basically, on one hand, to force their kids to behave in a certain manner, to learn the responsibilities of savings, of spending, trying to minimize the effect of the kids feeling that their parents are watching every step that they're doing, on one hand, but, on the other hand, making sure that we are directing them to behave in a responsible manner and based upon the parents' guidelines.
Rachel Morrissey:So you're assisting the parents in giving the guidance to the kids. Are there any literacy lessons implemented in? Are there tests workshops? There's a couple of instances where there's places that will lock the account unless the kid has completed his financial quiz for the week. Are these the kind of ways that you're encouraging it?
Eyal Gilad:This is one of the ways. Yes, we have some kind of a certification process. We're trying to make it smoother again in. Every bank chooses different paths but, yes, for some cases, we have some kind of a certification process that the kids needs to go to in order to get some kind of a coins, in order to be able to open and get authorization for other activities. Other banks would like to implement something more different nicer less of a test testing the kids.
Rachel Morrissey:So what are the kind of ideas that these other banks have? What are you working with right now?
Eyal Gilad:We're working with a few banks in North America, two of the leading banks in Canada and some very interesting use cases. Two of the leading banks in Canada and some very interesting use cases. We have two European customers which bought into this concept. By the way, in each one of the geographies there are other, different constraints, either technology constraints or regulatory constraints, that we need to overcome and we are, together with the bank, working to make sure that we are in compliance with all those limitations.
Eyal Gilad:And we have one very interesting customer in the Philippines that in this geography this concept of family first is totally neglected, that they found it extremely innovative and believe that this would give them the edge in the market. So also in the Philippines we have a very interesting project running right now.
Rachel Morrissey:Why did they believe it would give them an edge in the market? What is it about the culture?
Eyal Gilad:I'm not sure it's the culture or it's a local limitation or the risk profile of the household over there, but overall I think that they felt that currently they reached some kind of a glass ceiling that this concept will allow them to break.
Rachel Morrissey:So when you're looking at family banking and you're serving all these different geographies, are you finding certain kinds of products are more popular in certain areas? Are there cultural differences or is it simply generational differences? How are you thinking about that?
Eyal Gilad:Every geography is a different challenge, obviously.
Eyal Gilad:Yes, there is a cultural element that we always need to look into. There is a regulatory challenges that we need to take into consideration. Most importantly, by the end of the day, it's the business vision of the bank. It's about the creativity. It's about the commitment for innovation. It's about about the commitment to break the current barriers that they have. We are doing our best. I mean the innovation officers always are bought into it. The ideas the head of retails always bought into it. Some of them are very traditional and all the time focusing on the barriers. The other ones are more open to engaging in dialogue. How can we help them break the internal and external barriers? Those are the type of customers we are engaging with.
Rachel Morrissey:So what is next for MDocs? What are you guys thinking about?
Eyal Gilad:um, besides obviously focusing on our strengths, which is to provide experience system in all channels, across all channels, we are investing a lot in what we're calling a no code banking, which is fundamentally putting the right abstractions on top of the core banking systems to allow the business departments of each bank to remove their technology department from the critical path of fulfilling business initiatives. So we call it no-code banking. In some cases it's absolutely 100% no-code. In some other cases we're coming with technology of low-code and in some other cases with minimal coding. But whatever we do is committed to the vision of putting the right enablers to allow the business to achieve faster time-to-market with a more creative product definition, service definition operations.
Rachel Morrissey:So what would be the difference between a no-code and a low-code?
Eyal Gilad:No-code is a fully configurable technology environment. Basically, we are empowering.
Rachel Morrissey:Configurable by the bank? Yes, by the bank's business.
Eyal Gilad:If a business owner would like to go to market with a new product, we're allowing them, basically without any intervention of the technology department, to implement a new product, to experiment with it, eventually to launch it to market. There is always some involvement of technology but still, relatively to the current environment that we see, in a lot of cases new product introduction takes 18 months. We are aiming to cut it and we are achieving cutting it to days. So this is for the no-code, For the low-code is enablers. In some cases you need to code, you need to implement some business logic.
Eyal Gilad:And for this. We're coming with a set of rule-based mechanism. You don't need programmers, you don't need highly educated IT professionals. You still can define the business rules by yourself and go to market. Together with the introduction of such business rules.
Rachel Morrissey:So what kind of banks are being customers for, like no-code or low-code? Who are you serving with those?
Eyal Gilad:Serving all the leading banks in all geographies. In some cases, some banks find it hard to believe that it's possible. In some other cases, banks are committed to this change and they are going all the way with us.
Rachel Morrissey:I would wonder a little bit about the legacy technology and how no code can be combined with some of the legacy tech, the tech stacks that many of the banks find themselves encumbered by, and so how does that even begin to work? What are you guys doing that enables it to kind of converge with those?
Eyal Gilad:So I believe that each bank is in a certain journey, or in the midst of a journey of modernizing their legacy course. Each one of them is taking a different path. We believe that one of the secured ways to achieve it, effective ways to achieve it, is by hollowing the core, moving some capabilities which are currently part of the core banking, legacy core banking systems into the northbound, creating some kind of abstraction layer on top of the core banking systems in order to achieve those tasks. Generally speaking, as much as we will be able to take the legacy core constraints out of the critical path of introduction of new services, new products, we believe that the banks will benefit the most.
Rachel Morrissey:Well, obviously, I mean, I think that the fact that they don't have to have the same level of tech professionals to kind of implement this, this could be when you've done this right. What departments are you looking at or what are you working with to kind of implement a no code?
Eyal Gilad:It's always a combination of the business departments together with the technology departments and the technology departments.
Rachel Morrissey:Every and the technology departments are like this is great, let's do this.
Eyal Gilad:Yes, they're fully brought in Again. Some of them are more skeptical than others. A lot of them are committed to achieve. I mean they are being also measured based upon certain KPIs and SLAs official, unofficial they have with their business departments. They would like to cut the time to market. They would like to be more flexible. They would like to serve their internal customers better. As long as we are finding such partners, I think that we can jointly success in the journey.
Rachel Morrissey:And what did you say was the cut in time to market? You said it was normally 18 months. And now it's what?
Eyal Gilad:A matter of days, weeks Depends upon the case. A matter of?
Rachel Morrissey:days to weeks for new products to be implemented.
Eyal Gilad:By the way, when you're saying products, one of the things you're asking what you see going forward is also depends upon the geography, depends upon the limitation of the regulator, but we are seeing a lot of trends to start to sell also non-banking products, so we are allowing banks to open themselves into generating revenues by becoming a marketplace also for non-banking products and the bundle of banking products together with the non-banking products. We believe it's a huge differentiator for a bank.
Rachel Morrissey:What kind of products are banks putting inside that aren't banking products?
Eyal Gilad:Look in the retail space. My bank is selling me everything Solar panels, television, laptops, whatever I want. My bank's selling me.
Eyal Gilad:Your bank is selling you solar panels, yeah, but this is in the geography that I'm living in, but I know that it's not allowed in other geographies, but it depends. But the more interesting use cases that we feel are going to create differentiation is, for example, in the small-medium businesses domain, the SMB space. Yeah, so we have a dedicated offering for SMBs in which new small businesses coming for the banks for a loan, the bank can offering basically almost the full technology enabler stack to open his business bundle.
Eyal Gilad:With such a loan you can sell him the IT services, the cloud storage space cyber security, the relevant application for his area of expertise, and the bank is in the unique position to offer it first as part of the package. Some banks are currently working with us to implement such creative models.
Rachel Morrissey:That's very interesting because it does make the bank more than a typical financial partner. I mean, it'd be almost like your one-stop shop, banking your business center, Yep. But again, some banks are limited. It'd be almost like your one-stop shop banking your business center, yep.
Eyal Gilad:But again, some banks are limited. Yeah, some other geographies are slowly moving to this direction, together with open banking.
Rachel Morrissey:Yeah, creativities, that's very fascinating. So just this, we don't have time for much more. Just one final question, because you've been here at Money 2020. You said you have a booth, so how are you enjoying your experience here at Money 2020 Europe?
Eyal Gilad:I love it. There's tons of energy in here. To be honest, I returned now from Bangkok for the same event. The level of energy in here is much, much, much higher.
Rachel Morrissey:Really.
Eyal Gilad:I love it. I love to meet people that I'm meeting on a regular basis in those events. I love the partnership spirit those events are coming with. So it's allowing a lot of conversation, creative, new commercial models for us as a company, as a unit.
Rachel Morrissey:So I love it. Is there a favorite conversation you've run into here?
Eyal Gilad:It's not a keynote. It's not like you're not there, but some partnership and some potential customers. We had a very, very interesting conversation that hopefully will yield fruitful partnership going forward.
Rachel Morrissey:Oh, that's great Congratulations. I hope Knock on wood. Anyway, thank you so much for joining us here today. Thank you, rachel, I really appreciate it and to all of our listeners. You can find us wherever you listen to your podcasts or you can go to the Money 2020 website and we are there at money2020.com and feel free, if you'd like to be on the podcast, to let us know. At podcast at money2020.com, Send us a story idea. We love to talk to our FinTech friends. Thank you.
