Financial Services – where the money is

Financial Services – where the money is

Mark Cornell of BT

The UK is the world’s leading international financial services centre employing over 1 million people so there must be opportunities a plenty for the channel. Comms Business Magazine takes a look.

In today’s digital networked economy, business, society and economics are driven by the data and voice that runs across global networks. This has fundamentally changed the way that businesses operate and financial services organisations are no exception.

This creates fantastic opportunities for the channel, but this is a complex sector and selling successfully to banks and other financial institutions requires a strong understanding of the issues that drive the industry, as well as the technology at hand.

 

According to new research from Vanson Bourne, commissioned by storage, voice and networking distributor, Zycko, the Financial Services industry is leading the way towards VoIP adoption.

Based on a survey of 3,000 UK enterprise IT managers, the research shows that 40% of Financial Services IT managers are already using VoIP solutions with a further 32% seeking to introduce VoIP during 2006.

Unlike in other industry sectors such as Manufacturing, and Retail Distribution and Transport, the majority of IT managers within the Financial Services sector (56%) see convergence as the key driver for reviewing voice and data requirements in 2006. Notably, cost cutting, voted the most popular reason for communication systems reviews by IT managers in all other industry sectors, was seen as a secondary driver for Financial Services IT managers (44%), who also considered having one supplier for voice and data (36%) and improving their existing quality of service (28%) as less important factors than convergence.

In terms of obstacles to reviewing voice and data requirements, IT managers within the Financial Services sector cited being content with their existing technology supplier and lack of inhouse resource available to review requirements as the major causes of reluctance (both 44%). Lack of budget (28%) and knowledge about different solutions available (20%) were also concerns but, crucially, 64% of IT managers in this sector felt that these barriers would not affect their decision to proceed with voice and data procurement.

Phil Marshman, Director of VoIP Solutions, at Zycko said, “The Financial Services sector is characterised by businesses that are frequently calling many geographically dispersed locations. IT managers within this sector have clearly already recognised the business benefits of a converged solution which allows greater functionality and improved costs.”

For IT managers within the Financial Services sector, it is certainly not a case of having to rethink their existing voice and data communications strategy as convergence is already firmly within their plans. As the Vanson Bourne survey findings show, by the end of 2006 up to 72% of IT managers within this sector will be using VoIP solutions.

Marshman concludes, “To truly experience the broad business benefits of converged communications, IT managers should be considering third generation, best of breed open-standardsbased solutions, which provide greater flexibility, scalability and cost-effectiveness to the end-user.”

 
UK Financials

The UK is the world’s leading international financial services centre employing over 1 million people and with net overseas earnings of £31.2 billion (5.1% of GDP). The City of London is one of world’s three leading financial centres and the largest centre for many international financial markets. The City is characterised by deep, highly liquid markets, a concentration of industry-wide skilled workforce and quality, innovative products. The UK has the world’s largest share in: metals market (95%); Eurobond trade (70%); foreign equity market (58%); derivative market (36%); tanker charter business (50%); insurance (22%).

 

More bang for their buck

Mark Cornell, Director of Partner Management at BT Business believes that as in many other industries, one of the big overriding pressures in the finance sector is the need to reduce costs and increase productivity.

“Clearly IT has a big role to play here and a move towards convergence is emerging as a key trend. At a basic level, convergence reduces costs, provides flexibility and makes technology easier to manage.

“Running voice and data traffic over an IP network reduces management costs as banks need only maintain a single network. Furthermore, it is more cost-effective to run calls between branches across the private data network – a major plus for many banks.

“Another key benefit is that the bandwidth of IP networks can be flexed up or down on a pay as you go basis to meet demand for new services, providing banks with greater control.”

 

Customer focus

In a sector where consumers no longer select a bank for life, using technology to achieve competitive differentiation is key. Today’s converged networking solutions can provide banks with a platform for delivering new, more advanced multi-channel services to their customers. By demonstrating the customer service benefits of a solution, resellers can therefore create a compelling argument for new investment.

Developing a more customer-centric approach consists of building and maintaining a consistent view across all points of contact, including phone, web, email and face-to-face. This creates significant opportunities to sell and integrate CRM solutions, as well as to provide wider contact centre solutions, such as more advanced call handling solutions that enable banks to maximise the efficiency of their call centre staff.

Convergence can also enable a whole range of exciting new services that will keep customers happy and drive new revenues.

Mark Cornell, “Video conferencing, for example, puts expertise in the right place at the right time. So, in a branch where all mortgage advisors are busy there is no longer any need to turn a customer away. Instead, available mortgage advisors in another branch can be put in touch with the customer via a video conference link, and work through a mortgage application form together.”

 

Secure operations

Of course when implementing any new technology solution, security has to be a top priority, and in the transactional world of finance, this imperative is stronger than ever.

For banks that offer on-line banking, there is significant pressure to combat trends such as on-line identity fraud, hacking and pfishing.

Equally, as organisations embrace collaboration applications such as email, elearning and shared workspaces, they will see increased vulnerability of systems and information. Yet, despite well-publicised security break-downs, not all companies make the investment that they should in this area.

Mark Cornell of BT, “For resellers, the key to providing maximum support is to encourage a thorough risk management exercise. By carefully assessing potential threats, there is a major opportunity to add value, both through appropriate technology solutions and by helping to develop the right policies and guidelines for use.

“Security planning should also encompass comprehensive business continuity measures that ensure an organisation can still operate in case of a major incident.

“Flexible working can have an important role to play in limiting the fall-out from a major event, enabling employees to access core systems, including their specialist trading operations, from wherever they are. When supported by mirrored information on remote servers and back-up offices in separate locations, this creates a solid business continuity strategy in the event of disaster.

“Resellers should also remember that financial organisations are being placed under great strain by regulations such as Sarbanes-Oxley and Basel II. Regulatory agencies are increasingly robust in their scrutiny of communications including email, voice calls, instant messaging, web activity, data retrieval, monitoring and reporting. Organisations are increasingly relying on technology to help ensure they are compliant, and this must be an important element of any pitch.

“The bottom line when selling to this sector is that there are significant opportunities, however the lucrative contracts are not a commodity sell. Banks are complex organisations operating in a challenging environment. Inking the big value deals can be challenging, but very lucrative. For my money, it’s definitely worth the investment.”

 
Banking

The UK enjoys one of the most diverse and dynamic banking sectors in the world. It has the highest concentration of foreign banks in the world – 481 (next nearest was the USA with 287). London accounts for 19.1% of global cross-border bank lending, more than any other centre. Total assets of the UK banking system were £3,441 bn (August 2001) of which 55% belonged to foreign banks. The assets of UK owned banks, totalling £1,336 bn are dominated by a dozen or so retail banks, with national branch networks, mostly serving domestic, personal and corporate customers.

 

Technology

Distributor Nessco say they have worked very closely with a number of companies in the financial sector including more recently Letsure, a provider of insurance and financial services to the lettings industry for over 10-15 years.

Ronnie McCabe, Nessco’s Account Manager for Scotland says that the customer’s decision to migrate to an IP-based solution was a careful but necessary one in order to maintain customer satisfaction, enhance service levels and improve remote working capabilities without reducing the level of effectiveness and productivity.

Letsure’s call centre benefited immediately from a reduction in the number of abandoned calls and the ability to be able to identify and manage caller bottlenecks. However, migrating to new technology is not without risks as Richard Chrystal, Lumley Letsure’s Group IT Manager told Comms Business Magazine, “When choosing to implement a VoIP solution, users are immediately thrown into the IT arena therefore requiring expertise in VLANs, routing, power over Ethernet and in proprietary databases and servers. To facilitate this, close relationships with your chosen provider is essential and this is where Nessco assisted. Nessco were not a sale and forget company, and more importantly they were both business and technology aware.” Chrystal continues, “Managers need to be familiar with the technologies involved. The vendors will do all the work for you if required but in order to maintain practical ownership, a good understanding of the IT infrastructure is important.”

Nessco’s McCabe believes the key for resellers is to help address customer concerns through better communication so users are able to make more informed decisions.

“Each organisation has their own unique requirements irrespective of the industry sector in which they operate – therefore what works for one vertical market will not necessary assist another. An understanding of the external environmental factors affecting the business should also be considered. There is now a wealth of information available for users however it is up to the solution provider to present this accurately and consistently through their own individual marketing communication activities.”

 
Insurance

The UK has the world’s leading insurance and reinsurance market covering common motor insurance to space satellites. The UK insurance business generates premium income of nearly £200 bn. This was the third largest in the world, exceeded only by the US and Japan. The London market is a unique international wholesale insurance market-place and is the global market leader in aviation and marine insurance, with market shares of 31% and 19% respectively.

 
Securities

Besides a substantial domestic market in equities and bonds the UK is a major international centre for trading in the Euromarket. Eurobonds account for the majority of all bonds issued and the UK issues 60% of them and has a 70% share of the secondary market. More funds are invested in London than the ten top European centres combined. Edinburgh is the UK’s second major fund management centre and 6th largest in Europe. London is the largest centre for institutional equity management and also has the World’s largest share of the over the counter derivatives market.

 

Customer Care

Customer service continues to be a top priority for banking, investment and insurance companies. In such a competitive business sector the challenge is to attract and retain customers so it is essential to offer a personal service at all times. Contactability solutions greatly improve customer service and access to individuals wherever they are located. A single number for contactability means that customers have easy access to individuals and teams, this is particularly valuable where staff are field based and their location is highly flexible in nature: such as claims assessors, loss adjusters and personal bankers.

Lesley Hansen, Marketing Director at TeleWare says by using contactability solutions Finance Sector companies have seen significant increases in the number of calls answered first time with a corresponding reduction in abandoned calls.

“Studies from our customers show that before implementing a TeleWare solution less than 20% of calls were answered first time. After implementing a

Lesley Hansen of TeleWare

TeleWare solution 55% of all calls are answered by someone able to deal with the caller and abandoned calls reduce from 15% to around 5%.”

Hansen adds that TeleWare’s intelligent communication applications also allow you to control the use of voice messaging internally, providing an optimal human response to external customer calls, combined with an appropriate use of messaging for excellent internal communications.

 

Call Recording

Current legislation means that any company giving financial advice needs to be able to record calls – another great opportunity for the channel.

The Finance Sector has seen significant changes over the last decade with many hundreds of mergers and acquisitions; a key challenge has been the integration of the different types of communications systems including PBXs, Call Centres/Contact Centres and Voice mails. Hansen concludes that her channel partners have helped financial organisations to meet this challenge and to protect their investment in these solutions by providing an open standards architecture which ensures that the TeleWare applications can integrate into multiple systems providing common and consistent interfaces for staff and customers alike and protecting the end-user from challenges of adapting to changes to the infrastructure.

 
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