This document summarizes a presentation about designing digital services in retail banking. It discusses how technological changes have both evolved and revolutionized retail banking over time. The relationship between banks and customers is described as a service system characterized by co-creation of value. Challenges in these service systems are presented through customer and employee quotes. The presentation advocates for synchronization across different levels to transform service systems effectively. Technology investments are categorized into three "buckets" - integration, intelligence, and interaction. Each bucket is defined with its objectives and challenges. The presentation was given at the InES Symposium and discusses the Institute for Enterprise Systems and its Banking Enterprise Systems Center of Competence.

1. Designing Digital Services in Retail Banking
Prof. Dr. Alexander Mädche
InES Symposium
Mannheim, November 5th 2014

2. Digitalization in Retail Banking – Evolution or Revolution?
2
Evolution
Technological change did
continuously impact Retail Banking
Automated
Teller
Machines
1970
Phone
Banking
Automated
Money
Transfer
1960
Debit
Card
Revolution
But: Technological change is
speeding up …
2000 2010
… in parallel pressure is growing:
• Reduced incomes
• Cost pressure
• Customer needs & expectations
• New market participants
1980 1990

3. The Bank and its Customers – A Service System
Customer
I
Service System
Service System:
The Customer and the Bank establish a
service system characterized by co-creation
of value and context orientation (value-in-use
and value-in-context).
3
Bank
Bank:
The Bank is a socio-technical system
consisting of an organization (O), technology
(T) and individuals (I).
O T

4. Challenges in Retail Banking Service Systems –
Some Quotes …
Customer
I
O T
4
I got interesting investment
recommendations on Facebook from
my bank, but at the branch they did
not even have access to Facebook …
Well, there are things you
think about. The new
software is much easier, do
we still need all people?
After the implementation of
the new core banking
system we could not work
anymore.
I provided all data for my building loan
contract via mobile. However, when I
went to the branch, they asked me to
provide paper-based forms.
I triggered a 8,000 Euro
payment and afterwards my
account was locked,
intelligent fraud discovery!
I worked three years in IT
consulting in retail banking
and never talked to an
Bank
Service System actual end user.

5. Synchronization on Different Levels Required!
5
Organizational
Level
Individual
Level
(Customer /
Employee)
Organizational
Adoption
Conversion
(Implementation
Project)
Use
Adaptation Behavior
Individual Adoption
Initial Usage
Continued Usage
Routinization
Infusion /
Extension
Adaptation
Appropriation / Enactment
T

6. Transformation of Service Systems in Retail Banking
The transformation of a service system is a process involving all
actions of customers and individuals in an organization
leveraging technology to support the transition of from a configuration
t0 towards a configuration tn.
6
Customer
I
Service System
t0
Bank
O T
Customer
I
Service System
tn
Bank
O T
Enrich online/mobile
channel
Customer
I
Service System
t1
Bank
O T
Integrate core banking
platform
Customer
I
Service System
t2
Bank
O T
Enrich advisory services with
customer intelligence

7. Three Buckets for Technology Investments
Standardization Differentiation
1 2 3
Integration Intelligence Interaction
7
T

8. Bucket 1 – Integration
Challenges
8
1
Standardization Differentiation
1 2 3
Integration Intelligence Interaction
T
Objectives
• Eliminate functional silos and simplify
IT landscape
• Harmonize and integrate data and
processes targeting process
excellence
• Provide flexible IT platform
Technology Concepts
• Implement standardized product
software (core banking)
• Implement business process
management platforms
• Implement service-oriented
middleware
• Complex implementation projects do not deliver according to expectations
• Effective use within post-implementation phase delayed or not realized at all
• Shadow-IT due to technology misfits
• Reduced flexibility due to strict governance

9. Bucket 1 – Intelligence
Challenges
9
2
Standardization Differentiation
1 2 3
Integration Intelligence Interaction
T
Objectives
• Support better decision making
within organization
• Measure and improve process
performance
• Provide foundations for tailored
customer services
Technology Concepts
• Establish Business Intelligence
platform (DWH, Reporting, …)
• Implement new Big Data (Analytics)
technologies
• Data availability
• Establish data consistency e.g., for internal and external reporting
• Organizational structures influence decision making processes
• Regulatory constraints
• Privacy

10. Bucket 1 – Interaction
10
3
Standardization Differentiation
1 2 3
Integration Intelligence Interaction
T
Objectives
• Increase customer satisfaction and
experience.
• Enrich existing channels and create
new channels for intensified
customer-bank interaction
Technology Concepts
• Internet Banking
• Mobile Banking
• Social Media / Network Sites
• Collaboration Services (e.g. Chat)
• Multi-/Omnichannel Architectures
• Synchronization of the different channels
• Bank internal challenges (budget distribution, organisational structure …)
• Design for positive experiences requires holistic process thinking ( “customer
journey“)
Challenges

11. The Institute for Enterprise Systems (InES) at the University
of Mannheim
Central Institute at the University of Mannheim establishing an interdisciplinary
platform at the intersection of business and technology.
Research Team Selected Partners
11
Research Areas
Systems Engineering
Management of Enterprise Systems
Innovative Solutions

12. The Banking Enterprise Systems Center of
Competence http://www.banking-enterprise-systems.org/
Integration Intelligence Interaction
• Online / Mobile
Banking Adoption &
Use
• Multi-Channel
Design
• BI / Big Data
Analytics Adoption,
Use and Impact
• Process Intelligence
• Intelligent Guidance
• Adaptation &
Effective Use
• Business Process
Management
User-Centered Service Design Processes
12
Research Focus Areas:
Complemented with education and networking activities, e.g. Curriculum Banking
Enterprise Systems, Design Thinking Sessions, Industry Talks / Career
Development and Public Events.

13. Agenda Symposium (1/2)
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14. Agenda Symposium (2/2)
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15. Thank you for your attention!
Prof. Dr. Alexander Mädche
University of Mannheim | Business School
Institute for Enterprise Systems (InES)
L 15, 1-6 | 4th floor | 68131 Mannheim | Germany
Phone +49 621 181-3606 | Fax +49 621 181-3627
maedche@es.uni-mannheim.de
http://eris.bwl.uni-mannheim.de
http://ines.uni-mannheim.de
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16. Creative Commons – Attribution (CC BY 3.0)
The Noun Project (http://thenounproject.com/)
Customer-Centric designed by Javier Cabezas
Team designed by Murali Krishna
Microchip designed by Marcio Duarte
Flow Chart designed by Michael Wohlwend
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