{"id":910,"date":"2022-07-24T12:47:26","date_gmt":"2022-07-24T12:47:26","guid":{"rendered":"https:\/\/customerminds.com\/?p=910"},"modified":"2023-11-27T10:20:54","modified_gmt":"2023-11-27T10:20:54","slug":"mid-office-the-final-digital-frontier","status":"publish","type":"post","link":"https:\/\/customerminds.com\/mid-office-the-final-digital-frontier\/","title":{"rendered":"Mid-Office: The Final Digital Frontier?"},"content":{"rendered":"\n
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I have to confess that the first episode of this summer\u2019s billionaire space race left me a little underwhelmed. Sure, Virgin Galactic\u2019s Unity spaceplane was a rocketing and marketing triumph as Richard Branson and his team reached an altitude almost 85 km above the Earth\u2019s surface and successfully landed 20 minutes later. However, the significant middle part of the journey \u2013 yes, the space bit \u2013  amounted to just a few minutes of microgravity before the spaceplane\u2019s rockets switched off and the craft began to glide back to Earth. Was I too demanding? Well, spare a thought for services companies like telecoms and banks<\/strong> who are struggling to deliver satisfactory digital journeys for their customers. They too are struggling with the significant middle section of their transformation adventure \u2013 the middle office.<\/strong><\/p>\n\n\n\n

We have written previously about\u00a0the \u201cgaps\u201d in digital transformation projects<\/a>\u00a0which fail to engage customers in basic business work flows like customer onboarding (KYC)<\/a>, billing & collections, complaint management<\/a>, customer service, bereavements etc.\u00a0<\/p>\n\n\n\n

\"Closing<\/figure>\n\n\n\n

These are the problems customers\u00a0want solved and can have a detrimental impact on customer lifetime value and customer retention<\/a>\u00a0but despite this negative impact on revenue, they are not necessarily the functions receiving the investment and support required within the business. Instead, digital investment tends to focus on the front-office \u201cshiny baubles\u201d packaged in new mobile Apps, slick user platforms, AI Bots, etc.\u00a0<\/p>\n\n\n\n

Also, just as rockets need fuel, digital journeys need data. The Big Data race has upgraded core business systems and legacy platforms to support the latest data warehousing structures and analytics. That\u2019s all well and good but digital transformation is only as strong as its weakest link, and we already know there are \u201cdigital gaps\u201d where up to 50% of budget is being wasted<\/u><\/a>. Deloitte in a recent report highlights the challenges related to the \u201cmiddle office\u201d and references a galactic destination:<\/p>\n\n\n\n

Organizations are well underway with digital transformation, achieving significant value from modernizing their front-office capabilities to more thoroughly engage customers. At the same time, they have modernized back-office functions to help streamline operations. Yet even with this progress, many companies\u2019 digital journeys remain incomplete, as they have yet to address the challenges related to the \u201cmiddle office,\u201d what many are calling the \u201cfinal frontier\u201d of digital transformation. <\/strong>This diverse set of business functions are still primarily orchestrated through manual processes shored up by a mix of legacy systems and disconnected point solutions.<\/em><\/p>\n\n\n\n

So, the final frontier of digital transformation might well be the middle office. We will spare you the Star Trek mission statement but will boldly state some Mr Spock logic \u2013 customers very quickly forget the dazzling sign-up experience if basic problems cannot be sorted further down the line<\/strong>.  Think about all those Apps on a customer\u2019s screen and the increasing evidence that many customers do not engage with the App after the initial period of user excitement. Once those notifications permissions are turned off there\u2019s a double-whammy of pain \u2013 important messages are not viewed plus your \u201clost\u201d customer is generating no engagement data. The risk of disappointment is significant and clearly happening because the telecoms sector has shifted strategy. <\/p>\n\n\n\n

Many telcos are adopting a \u201cdigital second brand\u201d business strategy \u2013 more than 200 of these sub-brands have been launched globally. Intriguingly, a McKinsey & Co report<\/a> found that these new digital brands contribute approximately 25% of overall gross additional subscribers to incumbent operators within four quarters of launch. In the banking sector, it is no secret that the \u2018final frontier\u2019 of middle office digital transformation is in a different galaxy right now and that mobile Apps are still in basic banking\/payments mode.<\/p>\n\n\n\n

Our own banking expert, Frank Brennan stated in a recent article here<\/a>:<\/p>\n\n\n\n

\u201c<\/em>The urgent commercial reality is that Digital<\/strong> Customer Collaboration<\/strong> is an essential tool for most businesses, including banking. And whilst most Banks may have launched their flashy new Mobile Apps, these are typically focussed on day to day banking needs and not on more complex customer journeys or other digital channels.\u201d<\/em>  <\/p>\n\n\n\n

Middle office services are not flashy but critically keep customers engaged and not every franchise can simply launch a new digital second brand. Perhaps the more critical goal for digital transformation is keeping as many channels open as possible. The use of well designed, branded emails and website content are very powerful connection tools which can ensure the customer maintains App usage with relevant prompts. Again, Frank Brennan highlighted the value of interactive customer engagements in a recent Q&A session:<\/p>\n\n\n\n

\u201cWe have worked on a number of \u2018<\/em>collaborative customer<\/em>\u2018 projects recently invo<\/em>lving regulatory and consent communications, debt re-sch<\/em>eduling, even the handling of sensitive bereavement processes. In many cases the business starts the two-way conversation by telling <\/strong><\/em>the customer something<\/strong> or informing them of an important change in a particular process.  The<\/em>n, there is a request for something back from the customer<\/strong>, fill in a form, confirm an op<\/em>tion or decision, whatever. This does two things \u2013 first, it moves the interaction and the jour<\/em>ney further along the \u2018complexity spectrum\u2019 as Which50 would put it. Second,<\/em>there is higher quality data being generated that can subsequently be utilised to improve the ongoing customer experience\u201d <\/em><\/p>\n\n\n\n

There are real opportunities to deliver a positive customer experience by focusing on the \u201cdigital gaps\u201d, even space. However, the neglect of the middle office is putting the entire customer journey at risk. What is required is a consistent two-way digital collaboration between the organisation and their customer, from Acquisition through Onboarding, Servicing and Retention \u2013 what we like to call the Collaborative Customer Life Cycle. <\/p>\n\n\n\n

\"Collaborative<\/figure>\n\n\n\n

It doesn\u2019t involve rocket science and it\u2019s not particularly dazzling, but it is critical. In fact we believe it is mission critical and perhaps in need of a little Captain Kirk treatment\u2026.<\/p>\n\n\n\n

\u201cMid-office, the final frontier. These are the voyages of the 21st<\/sup> Century Enterprise. Its ten-year transformation journey: to explore strange new platforms, to seek out new customers and partners, and to boldly go where no bank or telco has gone before.\u201d<\/em><\/strong><\/p>\n\n\n\n

If you would like to find out how the Which50 customer communications platform<\/a> can transform your digital customer journeys and bridge the gap in your digital transformation project, so that you can act quickly to get closer to your customers please fill out the form below and you will receive our monthly newsletter.<\/p>\n\n\n

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