Is Digital Transformation the Antidote for Zombie Banks?

Karim Rizkallah

Regional Presales Manager, Middle East and Africa at Dell EMC Enterprise Content Division. @karimrizkallah at Dell EMC Enterprise Content Division

If there’s one thing we learned from acclaimed TV series “The Walking Dead”; is that a blow to the head is what it takes to really kill a zombie. Sadly, the same can’t be said when it comes to Zombie Banks.

First off, Zombie banks are those financial institutes that rely on their government to survive – in many cases – in the form of corporate bailouts or other forms of taxpayer-backed credit support. These banks would not survive otherwise due to their large number of non-performing assets which result in having an overall negative net worth. Owing to the bad debts they carry, their liabilities are greater then their assets; and as a result, they are unable to perform as normal banks should, they are not supporting the growth of the economy and are costing taxpayers a lot of money.

Nevertheless in some cases, these banks are kept on life support, staggering around between zombie banksthe world of the living and the dead, because they are “too big to fail”. Governments would either pump investments or work with the Central Bank to promote schemes that encourage these banks to lend to consumers and businesses in an attempt to cover their losses. Lowering interest rates to lower the cost of funding is also another means of survival.

Despite all that, creditors will keep coming because they believe that their government will continue to support it. Until it doesn’t. One such instance in recent years is the Ex-Im Bank in the US.Established in the 1930s to promote US manufacturing during the Great Depression, it has continued to have this purpose ever since, even though US exports are hitting record highs. The decision to dissolve this zombie bank in 2015 was one among many other smaller banks in the US facing similar insolvency problems.

Another recent example is one of Europe’s largest Investment Banks which reported €256 million in profit for the first half of 2016; an 81% decline for the same period in 2015. Although having bounced back as the year closed; shares remain at an all-time low and there are indications that if it remains weak and facing new regulatory fines, this bank may require assistance. At present, the government of this bank denies reports that they are working on a rescue plan and confirms that there are enough assets and capital to stop it from going bankrupt, which has helped ease worries.

In an attempt to circumvent these situations, the FDIC (Federal Deposit Insurance Corporation) in the US; the organization responsible on evaluating the viability of the Banking market and ensuring that bank deposits are safeguarded; are keeping a list of what they call “Problem Banks”. Banks on this list have serious deficiencies with their finances, operations, or management that threaten their continued solvency. Once a bank is included on that list, they are subject to closer regulatory scrutiny. They can also expect to receive instructions from regulators about what steps must be taken to rebuild their financial strength. In 2012 alone, a total of 51 banks with total assets of $12.0 billion failed, costing the FDIC Deposit Insurance Fund $2.51 billion in losses.

So the question that I ask is how technology can also help reverse the state of a bank in this situation. We have never seen a Zombie on the silver screen recovering from this ferocious virus; and that’s probably for good reason. The hope now is to save others from this horrifying fate. It’s Problem Banks then that Digital Transformation can be deemed as a viable vaccine.

If you look at it banks fail due to shortcomings in mainly three areas:

1) Risk: When there is a question about the viability of a bank’s long term assets from which it earns its income, there is also a question about whether this bank is able to fulfill its commitments to its customers.
Banks who employ Data Science are able to mitigate some of those risks by understanding the trends occurring in their market space.
Understand the data at hand and you rise above competition and be able to devise self-adjusting strategies that can guide your salesforce through the turmoil.
Data Analytics helps banks to build data models to measure the performance of the companies they invest in against the changes in their respective industries; allowing them to make the right lending decisions.

2) Fraud: Suspicious activities happening under the radar not only hurt a bank’s ledger but also its reputation. Fraud detection technologies can provide the proactiveness of identifying these trends before their full damage takes effect. By creating collections of data (structured and unstructured), integrating it with the bank’s systems for added accuracy and then analyzing it; you can have an enhanced view on any client engagement that does not follow policy.
Add to that the ability to perform social mining and you get a new dimension into uncovering new data patterns that can support a bank’s anti-money laundering activities, but also identity fraud and insider trading.

3) Regulation: Recent financial regulations such as Basel III & GDPR, impose new information management practices to be put in place to ensure the quality of a bank’s data. In the case of Basel III, it scores the bank based on its data availability, completeness, quality and consistency. This data can pertain to customer transactions or wealth management activities; it can be living in core systems or legacy applications waiting to be sunset. Failure to properly aggregate this information and produce the necessary regulatory reports, undermines the bank’s capability in healthy survival in its market.

At the end, Digital Transformation is ever growing with healthy banks and is being heavily invested in. The question is why is Digital still not considered as an imperative survival strategy for Problem Banks? If you want to survive the apocalypse, start identifying areas of failure in your operations and apply a proper dose of Digital.

Remember these banks need your money to survive and not your
Braaaains…

Digital Transformation – Resolution or Goal?

Many people around the world are looking forward to celebrating the upcoming New Year. Making resolutions is a common tradition and yet many of us have had mixed success when it comes to achieving the transformations we intendtransformationed. Why is that? I believe part of it can be attributed to confusion over the difference between a resolution and a goal.

To me, a resolution is aspirational and about having the will and desire to achieve a new or better “state.” It’s long-term in nature. On the other hand, a goal is concrete and clear about what needs to happen by when. By accomplishing goals consistently, the desired new or better “state” can be realized.

This interplay between resolutions and goals can be seen when looking at the buzz about “digital transformation.” The key drivers of digital transformation include profitability, customer satisfaction, and increased speed-to-market. Given this, is digital transformation a resolution? A discrete goal? And, what can we do in 2017 to ensure more than mixed success?

Digital Transformation is a resolution

The term, “digital transformation” by itself seems a bit nebulous. To me, digital transformation is a long-term effort to get to a better state. In Life Sciences, this may include becoming more patient-centric to support all aspects of the patient’s health and well-being, leveraging technology to make quicker, better decisions, and staying better connected and informed. Being able to articulate where the organization is going and why is critically important so that employees, partners and other key stakeholders can understand why action needs to be taken.

All sorts of reasons are given for embracing digital transformation. I think this description from an article in InfoWorld sums it up, “…if you’re not doing it, your company will die and you will lose your CIO or IT leadership job. You’ll — shudder — be disrupted! Or fail the wrong side of the Innovator’s Dilemma.” Certainly, part of digital transformation is ensuring that companies are not disrupted by more nimble competitors. But is that it?

Goals turn the invisible into the visible

Business competitiveness and longevity is still nebulous and not enough to enable transformation. Tony Robbins says, “Setting goals is the first step in turning the invisible into the visible.” By understanding where your organization is at today, companies can assess the areas of biggest impact, highest levels of barriers or risk and create a plan for how best to achieve digital transformation.

In Life Sciences, many organizations have digitized their former, paper-based processes. While this might have driven new levels of speed and efficiency in the past, it doesn’t necessarily mean that the process itself is currently the most efficient. With the expanded ecosystem of partners and stakeholders involved in managing the lifecycle of a drug, processes are more complex and span more systems.

Transformation affects people, processes and technology. It’s a continuum whereby each organization is likely at a different place on one or all of these factors. If you aren’t sure where your organization falls, check out this online digital assessment tool.  It can help you get a better understanding of where you fall on the spectrum of digital transformation.

Goals must inspire action

Recently, Rohit Ghai, President of the Enterprise Content Division at Dell EMC, gave his take on digital transformation in Life Sciences. When asked about why Life Sciences organizations are embracing digital transformation, “to survive” was definitely on the list. However, he also said that they are doing it to “thrive.” To watch the video, click here.

People in the life sciences industry typically want to help improve patient outcomes. They want to have an impact on improving people’s health and well-being. In some cases, the drugs, devices and products they work with are lifesaving. Therefore, it’s imperative that all key stakeholders understand how their specific goals can combine to positively impact not only their department, company and industry but the larger human condition. To quote Tony Robbins again, “People are not lazy. They simply have impotent goals – that is, goals that do not inspire them.”

What you need is a plan of action

To quickly recap: Digital transformation is the resolution. Goals must be set to enable transformation. transformationThese goals must tie each stakeholder’s part to a larger effort that inspires people to take action. And goals are….pure fantasy unless you have a specific plan to achieve them (says Stephen Covey.)

In the paper, “The Future of Pharma is Digital” published by Gartner Research, the research showed that many CIOs and IT leaders are having trouble either identifying value that can be delivered digitally, developing the right digital strategies to enable execution or struggling to align with potential digital stakeholders without taking on too much risk. Gartner identifies four steps that can be taken to prepare for the future and identifies the seven burning issues that need to be addressed in order to be successful.  This may help provide some direction for those grappling with these challenges.

Making Your Digital Transformation Resolution Stick

As you think about your own personal resolutions for the year ahead, also think about your professional goals. If you are a Leader in a Life Sciences organization and digital transformation is part of your “new or better state” in 2017, think about the steps you need to take to articulate the vision, convey the rationale behind it, socialize it with your key stakeholders and make a clear, actionable and measurable plan. For others, gain a clear understanding of how your work directly supports these large initiatives and the positive outcomes it can generate. And for everyone, feel free to leverage the resources provided in this blog:

Wonder what software and solutions SMB’s will spend their money on in 2017?

Prediction: SMB’s digital journey continues with purpose-built, cloud and mobile ready solutions

Customers are demanding ever better customer service, and faster transactions, and small and medium sized businesses (SMB) need to continue their digital journey to stay competitive. But what are these real world examples, and where are the trends? After listening to the IDC FutureScape: Worldwide SMB 2017 Predictions webinar and reading their blog, I was looking for some proof within our own customer base. Specifically our ApplicationXtender customer base, since ApplicationXtender is a document management solution, targeted at the midmarket, and part of the Documentum portfolio. So this is where I started looking for some evidence.

IDC – In 2017, SMB IT spending will increase by 3.9% to a record $557 billion, with a continuing shift from hardware towards software and solutions.

Yes, here at Dell EMC, we see that customers want to buy solutions, instead of platforms, or feature and functions. They SMBface specific problems, and they need near term results. For example, University of Arkansas for Medical Sciences, one of the largest public employers in Arkansas, started with a HR solution, and now 300 departments are using ApplicationXtender to manage everything from accounts payable and receivables to patient files, student records, clinical trial reports, donor information, equipment repair manuals and construction management blueprints. Read the Case Study.

Or Metrolink, the commuter rail authority for six Southern California counties, implemented an Accounts Payable solution that helped them minimize cycle time by 20% and increase staff productivity by 50%. Read the Case Study.

IDC – Cloud service brokering (CSB) will be key for midmarket consumption of cloud services, leading almost two-thirds of global SMBs to choose CSB partners  by 2019

With millennials moving into leadership positions, demanding convenient cloud solutions, more and more SMBs see the value in “pay as you use” models. Our cloud-based content management apps, based on the Dell EMC Leap platform, can be deployed in hours. For ApplicationXtender, we are seeing our partner succeed with providing business process outsourcing solutions hosted in the cloud, to our customers. In our partner catalogue, you’ll find a range of content solutions delivered in the cloud, with predictable cost-models.

IDC – Midmarket firms in developed regions will grow mobile investments by up to 50% in 2017, prioritizing new device rollouts across departments to complement mobile app deployments.

Again, the millennials are moving in, and they demand to be able to get their work done anywhere, anytime. While it used to be acceptable to send paper to a central location and scan it, nowadays, mobile capture and workflow is a must have. Mobile is one of the areas where SMBs can find their competitive advantage. For example Center for Life Management in New Hampshire, wanted to improve the patient and staff experience and ensure provider access to patient records, including mobile access. After turning digital, they were able to speed cycle times by 88% and achieve up to 24 hour reduction in insurance card updating time. Read the Case Study.

 

There is one more prediction that I would like to add: Price and size matters. And I don’t just mean the initial purchasing costs for a technology solution. What is the licensing model? Do you need professional services to implement? How is training delivered? What are the support options? Will this solution scale if your business grows? Is the vendor big enough to not fail?

With these final thoughts, I am wishing you all happy holidays and a healthy New Year.

Inspiration for Financial Services Transformation, from IOT to Amazon

Suren Naidoo

Presales Director of Worldwide Functional Programs. Follow @Suren_Naidoo

Disruption by its very nature is an agitator, but there is no reason it can’t be turned into inspiration. Let’s look at developments from the Internet of Things (IOT) to convenience shopping on Amazon, all of which can help financial services companies amidst FinTech, but really, can help any enterprise. We can then outline how an enterprise content management (ECM) strategy can launch you safely into your own transformation.

First, consider how sensors and contextual information can inform how you shape, price and deliver your market offerings. A great example? As the latest automobiles roll out with telematics that track mileage, speed and driving behavior, there is a chance to reinvent offerings like insurance plans. Rather than plans that apply a blanket risk to all drivers in an age range, insurance companies can individualize risk and price accordingly, thanks to IOT data.IOT

Now, take it a step further – if you’re a car company, why not partner with an insurance company to provide purpose-built cars for new drivers? Equip them with more sensors, in exchange for the better insurance package. Chances are, you will not only sell many such packages, but you might help reduce collision risk overall, as monitored teenagers slow down, knowing their car is sensored.

For house insurance, the same idea is possible by sending drones to accident sites to objectively capture information. Fraud goes down, while claim processing speeds up. If the flooded washing machine calls in the drone automatically, even better. Similarly, home IOT devices are only getting more connected, with smoke alarms sending alerts to smart phones, and house shutters automatically closing when a tornado alert is issued. Do any of these new communication paths and data loops create good reasons for you to help your customers?

Second, start to make connections between different IOT types and different industries. Many people today wear heart monitoring or fitness wrist bands. Could those be tied to auto-trigger financial decisions? As blood pressure boils, is that a good time to liquidize some assets for emergency use? It sounds far fetched, but the concept here is that learning more about what’s impacting your customers can make you more proactive to help in meaningful ways.

This type of thinking may help you uncover new partnerships. I have seen a mobile phone company offer contracts that include free life insurance. Later, those policies are upsold for a new source of customer acquisition. Consider healthcare companies that share your customer base and how you could work together, or automotive companies or manufacturers. What could you do together to delight your joint customers?

Finally, use the magic wands of convenience and retention and cast them across IOT.  You might say a spell: “bring me ample customers who are happy to pay me.”

You might be surprised how many of your customers care for convenience far more than the actual value initially driving your product’s creation. For Amazon, the service began selling books, then added millions of items. Most recently, it rolled out Pantry for capturing day-to-day purchases.

This is no longer just a play to cut out middlemen and cost. In fact, Pantry may cost more for a customer than visiting a store or using different shipping methods per store. It is convenience built into the Amazon experience that makes customers willing to buy practically anything through the service. Knowing Amazon is continually adding new ideas couples this convenience with a stronger motivation to stay loyal. At time of this blog writing, news broke they are looking at brick and mortar grocery stores. Amazon customers may have their license plates read as they pull in and pick up pre-ordered food!

There are many more examples, from kids choosing their coffee shop based on free wifi availability, to busy urbanites choosing only restaurants that offer valet parking together with their secured reservation. Loyalty and retention goes to those providers who make life convenient and better, sometimes in seemingly small ways.

All of these scenarios involve transforming how you look at and evolve your business. All of them have one thing in common – the never-ending need to manage content, house it, and use it.

We have already covered in previous blogs the need to look at your value chain and how to harness innovations, but I encourage you to especially consider IOT and the need for convenience in your transformation and ECM planning.

For a bank, this might mean ensuring data feeds from Google Alexa data, to identify which customers are always asking for an Uber or Lyft, then partnering with those companies to bulk-buy free rides for $100k+ deposit customers. For an insurance company, maybe it’s airplane tickets bought on a sister credit card that prompts travel insurance automatically texted to the customer, pre-flight.

If you are a Mac user and have had to search hundreds of photos, you know how their search capabilities can save you hours to find “Mom” pictures, tagged through facial recognition. For a bank, it might be as simple as giving your checking customers better mobile device search terms – “Suzy meeting” or “new printer” — to help them speed tax document preparation. Instead of sifting through transactions by date or account type, their broadened ability to search POS device data or mobile app purchasing info removes hassles on their end, and shows you understand their bigger world.

Before any creative use of technology, start by learning as much as you can about your customers. Draw inspiration from the 26 billion new IOT devices Gartner predicts by 2020 to help you do this, as well as the new content and data that IOT sensors enable.

20 Years and 3 Minutes: The Most Thought-Provoking Comments from Energy Industry Leaders

Robin Gellerman

Robin Gellerman is a solution marketing manager for the Dell EMC Enterprise Content Division and writes about topics concerning the energy and engineering industries.

I admire leaders who make you think, long after their presentation or keynote is over. Here are three ideas I found “most thought-provoking,” after I reflected on all the industry events I attended this past quarter. I hope you will share your own reactions and comments about my selections, but also share any great points you have gleaned from your industry interactions.

1 – “We want to make decisions within three minutes”

This is how a panelist from Chevron defined Engineering Information Management (EIM), a super-set of Enterprise energyContent Management, at AVEVA World this October. There was silence, and a long pause among the rapt audience as this comment sunk in.

It was not about technology. It was not about process integration. It was about how the company could increase business agility in utilities or power plants, once all the technical innovation was in place.

What I like about this comment is that it brings to life a best practice we strongly believe in at Dell EMC Enterprise Content Division (ECD) – leading with your business objectives. It also expresses the business vision in a statement that is both simple and controversial.

By starting with this well-articulated goal of three minutes, the right conversations will undoubtedly start happening: “Then we would need to access approvals from our smart phones.” “We would have to add automation to the offshore piece of the process.”

You can imagine how much faster the brainstorming could occur and utilization of technology could begin, if you start with this kind of statement.

2 – “How do you shoot a cannon?”

It turns out that firing a cannon includes a process step of pausing, as I learned from the “Transforming Engineering Project Delivery” panel at AVEVA World. When cannons were used during times of war, this step prevented accidents and human injury. Modern firing equipment, however, no longer requires such efforts – yet it still took twenty years to eliminate this step.

To me, this is a relevant insight applicable to Enterprise Content Management in today’s multi-faceted enterprise. Perhaps it was multiple acquisitions, staff turnover, or fondness for tradition, but whatever the cause, many of today’s plant processes have never been revisited or improved.

As digital transformation takes hold, companies are now starting to approach their workflows with an open mind. Do we really need legal review of a document before it has been through VP approval? Why are we still storing architectural drawings on paper? What good is a photo badge ID if 90% of our workers are remote?

As this speaker emphasized, some processes are carried into modern times even though they are not needed anymore. There is no reason to let outdated issues wait years before phasing them out. By breaking habits and looking at our work anew, we may save time or better service customers.

3 – “Raise your hand if….”

This panelist at our recent Digital Transformation in the Energy Industry breakfast asked the crowd for a show of hands if anyone is able to enter an asset tag number into a system and quickly locate all the documentation about that asset – enough to get your job done. Surprisingly, NO HANDS went up.

This exemplifies how fundamental document management is so critical to basic operational efficiency. With all this talk of digital transformation, big data and predictive analytics, it seems that we have a long way to go with getting practical and down to earth with the simple stuff. This can be made easier these days, as ECM solutions are delivered in more modular ways, and the cloud allows greater elasticity.

Bonus – We Still Need Humans

I’d like to add one bonus round to this collection. It’s not exactly a number four, because it actually relates to all of the points above.

What I heard at more than one of these events is that we cannot assume technology will take the place of human determination or human judgment and setting standards. In at least two cases, presenters shared how they used to have paper document controllers and central ownership over content. In both cases, once they digitized (without staff accountability or a structured system), the organization lost its standardized approach to retaining and sharing knowledge. Either each person individually updated a document in different ways, or each thought the other would update a document — until nobody updated documents consistently at all. No process steps, standardization rules or workflows were developed together with the technology.

As the pace at which companies deliver services and interact with stakeholders only accelerates, I would argue there is an even stronger need to standardize. Using ECM together with your human experts brings efficiencies to new levels, tapping the strengths of both. This is one of many reasons why we design in features like vertical-specific standards, the ability to collaborate with multiple reviewers, and track changes to as-built documentations.

So as we look ahead to more digital transformation and continuous improvement in our industry, let’s think about the points these smart leaders have shared. What can you add to this list? Have you heard great points from other industries that still apply to the energy sector?

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