III.PROPOSED WAY OF BANK TRANSFORMATION
It is proposed here that the process of bank transformation from classical retail to digital bank be performed using two phases or periods. The first phase should be one hybrid period. The second phase should be period of creating digital bank. A.Hybrid period of bank It is proposed that in the hybrid period of the bank transformation be implemented next activities: 1.Replace classical tellers in the bank branches with multifunctional ATM devices that with money delivery can also receive money, make payments and gradually increase the number of banking services. At the start, it would be desirable to ATM devices to be equipped with microphone handsets, as well as to have the ability to play video clips that are essentially the help reproductions. Such equipped ATM devices would be able, at a later stage, when no more be employees at places of posting ATM devices, to connect to the Call Center, for purpose of providing help and consultations to clients. 2.Bank workers should be more and more trained to be consultants, product sellers and to be less irreplaceable elements in performing of particular banking services . 3.In places where by using multifunctional ATM devices would be created more free employees it should to organize work in several shifts in order to provide as much as possible high quality service on basis 24hours/7days. 4.ATM devices, located in separate locations, outside the branches, banks should try to transfer to ownership of specialized firms that will necessarily appear on the market. Their primary business will be working with ATM devices and taking care about ATM devices. It is already known that ATM devices are becoming more cost and less profitable for banks. Reason for this is increase in the cost of leasing, insurance and transportation of the money. But if it takes a specialized firm costs will be the same or lower than for the bank. The reason is that one same ATM device can be used from more banks, with one same cost for each bank. Bank will, on the other hand, expand its network of ATM services and at same time reduce the costs. 5.Convert branches and agencies into places for providing consultations for the purpose of selling products and raising the level of bank services. 6.Selling places that appear insufficiently visited (not profitable in terms of contribution to the overall image and business of the bank) try to sell or rent. 7.Introduction and continuous upgrading of customer relationship management (CRM) solutions in the information system of the bank in order to better and faster segment clients connected in groups according to some common characteristics. Accordingly to that, create successful campaigns for the purpose of selling and popularization banking products and services. Good CRM solutions allow more efficient use of information about client financial habits and achievement principle of know your client (KYC) in the full sense. 8.Introduction and continuous upgrading of document management system (DMS) of the bank in order to more efficiently archive bank documents, to achieve their faster search and saving in physical space, paper and everything else that involves archiving in physical sense. DMS is also very useful for automation of jobs. 9.Permanent work on the automation of banking operations in all parts of the banking business. B.Creating digital bank period It is proposed that in the period of creating digital bank in the bank transformation be implemented next activities: 1.Synchronously with the hybrid phase strengthen the centralization of the bank with the core in the Call Center. The reason for it is because the Call Center will provide advisory and help services to clients. It could be performed either through educational video clips or by telephone or via live video or by chatting or email correspondence. By contacting the Call Center clients will be able to get answers to their questions and consultation from the best experts in bank staff related to the particular product. In classical bank system client received information from the Account Manager, i.e. Personal banker, who was trained by mentioned experts. Whatever Personal bankers are capable they are still less qualified staff. Therefore, quality of the presentation of the particular product is lost. 2.Electronic banking (eBanking) and mobile banking (mBanking) applications will be merged into one, at least as far as users are concerned. The goal is that user when uses an eBanking or mBanking application does not notice the difference at all. User can start at one and to end on other application, training is the same for both, and so on. 3.How the tempo of adoption of legal regulations will allow, it should change banking products and services in a way that they can be executed and used remotely and transferred to mobile applications. 4.Create a flexible information system (through the API functions, on the Lego dice principle) that is easy to fit with other applications, especially those already offered by so called Fintech (Financial technology) firms, because such firms are leading in innovative services . Few of banks have own development teams that can parry to such firms. If they have it, it is only in certain areas of banking business. It is more profitable to have ability to provide some service on time than to develop it itself for any price. The upcoming PSD2 EU directive supports this opinion. 5.Reorganize the bank on that way to have much less vertical and much more horizontal elements. Fig. 1 shows the lack of cooperation between sectors in the classical bank, since all cooperation goes through central parts. In that way too much energy, time and skills are lost on the synchronization of work of individual organizational units, because they are not organized by product while whole business is turning around the products. So, it is necessary to reorganize current banking sectors (Retail, Corporate, IT, etc.) into more efficient teams, concentrated around bank products or product groups. Only minimal staff whose job is to common serve these teams and very small number of commanding posts that serve to effectively integrate these teams into organizational unit should be left in the vertical part of organization. Programmers, development teams, marketing, sales teams should be grouped in the product teams. This will ensure high specialization of professional staff, their greater efficiency and better teamwork. 6.Introduction of the Big Data concept into information system of bank. It should be performed in a way to enable better collection of both financial and other data about clients of the bank, on the way of doing of world famous search engines firms, online shops, social networks, etc. . Already it is clear that in order to provide adequate services to clients it is not enough to have only knowledge about financial characteristics of client, but also other knowledge about client behavior especially related to its purchasing habits. So, it is necessary and desirable to begin to prepare, as soon as possible, transformation of banks from banks of client financial data to banks of client all data . This will also cause employment of some of up to now unused bank worker profiles. In addition to Data Science experts who will be experts for Big Data, it will be needed that the data be classified and statistically processed. So, there are places for worker profiles as mathematicians and statisticians type and psychologist (or similar) type who will provide correct interpretations of statistically processed data. Fig. 2 shows proposed model of modern digital bank organization in teams according to groups of bank products. All the activities in the bank transformation should be performed by using modern digital electronic technologies. It is needed to appropriate apply and integrate digital and mobile electronic technologies and systems, using modern computers, computer systems, computer networks, Internet, wired and wireless communication technologies and protocols, big and fast data storages, mobile devices, data bases, cloud technologies, big data and data mining concepts, application software for banking services, etc. Fig. 3 shows proposed principal block diagram of the information system of the modern digital bank.
Fig. 2. Proposed model of modern digital bank organization using teams of product groups Fig. 3. Proposed principal information system organization of modern digital bank
It is clear and no doubt that serious changes should be implemented in the banking sector in the future applying modern digital and mobile electronic technologies and systems. The way how it will be performed can vary in accordance with the specific factors. Here is proposed and described one of possible and expected ways. Speed of introduction of all mentioned activities and technologies will depend largely on the speed of adoption of the necessary legal regulation. It is related to the digital signature and other regulations that will replace the need for physical visit and presence of the client in the bank branches. It will also depend on the degree of client pressure to the banks to be able to use bank services remotely by modern mobile devices and systems. It is recommended that banks already perform some such activities and introduce such digital systems in order to more readily accept these changes. Even more, in accordance with their possibilities the banks should initiate these changes. Symbioses of banks and telecom operators, according to their perspective, have great chances to give good results, especially for local or regional organizations. It can be very good seen the tendency among bank clients to complete the entire retail business in a centralized way. For example, the buyer wants to buy a new kitchen. The buyer wants to select from one place model of the kitchen that suits to him/her and settle the commercial conditions at the same place (chooses a loan and makes a payment). The opinion is that if a bank does not create itself as a leader in this process, someone else will become a leader. In this sense, many professionals think about companies working with the most modern digital and mobile technologies and systems that successfully developed social networks, search engines and Internet shopping as new retail leaders. Such modern companies have a greater perspective to take over retail business and therefore retail banking in the future. The banks are actually very threatened if they do not access to the necessary changes and application of digital and mobile electronic systems on time. There is an opinion that banking is necessary but that banks are not.