Centralisation is a key strategy for banks that want operational efficiency and visibility across accounts held by multiple entities and business units. The same logic can be applied to consolidating value-added service (VAS) platforms across retail, business, and merchant banking units. What should a bank consider while evaluating a single-platform strategy?
One platform or multiple platforms? The answer is not simple. Ultimately a bank needs to decide which strategy works best for their own VAS portfolio across its retail, business, and merchant banking units. There are a number of compelling benefits to why some banks choose to manage a single platform for their entire VAS portfolio.
A single VAS platform provides a unified view of a client’s VAS activity across retail, business, and merchant banking profiles.
The holistic view enables a more informed and personalised client service that can motivate increased loyalty and business. By and large, VAS products should look and feel the same across client profiles, so a single platform ensures that the client experience remains consistent no matter how they choose to transact.
Consolidating all business units to one platform can protect portfolio P&L.
Directing increased volumes through one provider creates more favourable business terms while driving costs down through shared services. For example, costs relating to maintenance and support will be shared. This also makes it possible to provide better cost projections for the entire VAS portfolio.
Leveraging a shared platform makes it possible for all business units to promptly access new releases and enhancements, increasing competitiveness. For example, adding a new airtime provider can be implemented across all business units simultaneously - ensuring that any customer will have access to the latest options whether they are buying at a till point or online. Products can even be set up to present differently as applicable for each channel.
Dependence on one platform does come with risk so a bank needs to make sure it is confident with the technology used to support the entire VAS portfolio. In this case, a cloud-based solution helps to mitigate these risks in a number of ways.
In addition to enabling fast-to-market implementation, cloud-based platforms enable integrations to multiple providers and make it easier to support a fully-fledged VAS portfolio. Electrum in particular provides cloud-native infrastructure with access to over 60 existing aggregators and providers through a single API integration.
Flexibility plays a role when use cases differ between business units. For example, digital vouchers for streaming platforms such as Netflix or Spotify are popular with retail banking customers but less relevant for a business banking account. A successful VAS platform will allow each business unit to easily specify its own rules, services, and products.
VAS volumes in retail banking are generally higher than business banking or merchant banking clients, and these customers are also the most likely to change VAS providers if something goes wrong with the transaction. Therefore, the biggest benefit of a cloud-based platform is the limited downtime and improved reliability of the service.
Cross-impact between business units or “tenants” is an important consideration when one platform is shared across business units. Electrum provides enhanced security and control through its single-tenant structures that ensure any issues with one business unit are contained, whilst the remaining units can continue to operate as usual.
Part of managing any VAS portfolio includes monitoring of transactions, queries, volumes, failure rates, and revenue. Real-time and end-to-end visibility can help technical teams identify platform-wide issues that could impact multiple business units. As a result, fixes are streamlined and precise, and there is less strain on technical resources.
In addition, access to real-time data helps the bank make informed strategic decisions on the VAS portfolio. For instance, it can inform strategic decisions including which products the bank should retain, acquire or reconsider for each business unit.
A unified VAS platform is ideal for consistent client experience and holistic customer support, control over portfolio commercials and reduced time to market for new products and services.
Getting it right the first time requires expert partnerships to deliver streamlined implementation and future-proof solutions. Electrum’s cloud-native technology stands out with access to a scalable network of over 60 providers, accessed through one, simple API integration.
Contact us to learn more about our VAS solutions for your bank.