FinServ Martech is Risky Business

Rob Daleman
Posted by Rob Daleman VP, Corporate Marketing Tuesday, November 7, 2017 - 12:29

Rob brings over 18 years of industry experience in technology marketing – both direct and channel, to his position at Quadient. Previously, Rob led Marketing at Avaya Canada, go to market for medium businesses at Dell Canada and brings marketing, finance, manufacturing and logistics experience from his time at Maple Leaf Foods. An avid composer and musician, Rob continues to combine digital and social media to drive awareness and consideration in the B2B marketplace. Rob holds an MBA from the Schulich School of Business.

Customer Experience Update
Martech and Risk

Two weeks back, we reviewed the growing pressure on CMOs to be the primary growth drivers in their organizations, and the resulting acquisition of MarTech to help the CMO meet aggressive acquisition and growth targets.  Last week, we examined how the resulting shift in budget, from the CIO to the CMO, is making it harder for the CIO to support a holistic customer experience across their technology stack as they attempt to keep pace with technology acquisitions being made by their marketing counterparts.  This week, we will examine the impact that this same shift in focus is having on the Chief Risk and Compliance Officers, and pose the question "how much risk does Martech pose for your business?".

The first thing to note regarding compliance is that it continues to act a barrier to digital transformation projects for North American and European firms.  67% of surveyed organizations considered risk management, compliance and legal complications to be "very challenging" or "challenging" elements to deal with while navigating digital transformation projects.

 

Challenges_To_Digital_Transformation

 

And marketers continue to struggle with regulations surrounding their marketing efforts - in particular heightened regulations concerning personal and audience data.  Global regulations, including the GDPR and CASL legislation are setting a higher bar for marketers to comply with across their entire Martech stack.

 

Challenges of Data-Driven Marketing

 

So while CMOs have been in the advantageous position to acquire additional marketing technology, they appear to be coming up against a point of diminishing returns as the CCO and CRO do not have the resources required to support the growth of marketing technology acquisition.  Given the number of third party solutions involved across the customer journey for most organizations, it is not surprising that according to 2016 Compliance Trends Survey by Deloitte, the most challenging aspect of organization compliance and ethics programs was managing third party risk.

Compliance officers are working hard to keep up.  According to DLA PIPER’S 2017 COMPLIANCE & RISK REPORT, 71% of compliance officers made a change to their compliance programs due to recent regulatory events, up from only 21% the year prior.  However, the percentage of compliance officers who indicated that there budget was not enough to meet their compliance goals increased from 28% in 2016 to 38% in 2017 - indicating the challenges that compliance officers face in keeping pace with their marketing peers.

In particular, lack of progress on digital transformation projects, and the emergence of mobility as a customer communication channel is causing difficulty in allowing Financial Services companies to meet the compliance needs of their customers.  In a 2016 article from CIO Magazine it was pointed out that mobile banking application oursourcing has grown by 45% from 2015 to 2016.  In that article, Jimit Arora, partner at Everest Group pointed out that:

“Half of analyzed application outsourcing deals in banking in 2015 had elements of digital transformation in their scope.  These could be engagements that had elements of mobility, big data, cloud, social media, artificial intelligence, or block chain for example.  This disjointed approach to creating digital workflows—a function of how banks are organized—causes friction and value leakage. Take, for example, a mortgage, where a client may start by using digital systems of engagement but quickly runs into a paper environment in the middle or back office where the process breaks down and [takes] weeks.”

Could outsourcing trends be having an impact on the security of content on omnichannel communications?  A recent vulnerability assessment conducted by Accenture and NowSecure tested 465 applications from the top 15 banking institutions in North America.  They found that 21% of Android based apps had security issues, and 12% of ios based banking applications had security issues.

 

banking app security issues

 

The study flagged "insecure communication as the biggest risk.  A summary of their findings concluded

"Security around the transfer of data across communication channels is a challenge for developers, they noted, pointing out that developers are placing too much confidence in secure end-user behavior and back-end server-side communications.  Organizations should also have a strategy for performing regular vulnerability and/or configuration assessments, complemented by penetration testing, app fuzzing, and source code reviews, to obtain a comprehensive understanding of the mobile security environment across the entire mobile deployment stack."

So how can financial services risk and compliance officers come full circle in supporting marketing in their efforts to digitally transform their businesses?  These are problems that traditional customer communications systems solved for paper-based communications years ago - and one that modern customer communications management systems can address across the enterprise today.  Looking holistically at the internal process that drive their omnichannel customer communications, CCM solutions like Quadient Inspire assist in you:

  • To define a governance process for serving up communications to front line office workers
  • Develop interactive document creation capabilities that leverage subject matter experts across your enterprise
  • Leverage your current communications infrastructure to power digital channels - including web and mobile applications 

By leveraging modern customer communications management solutions, Risk and Compliance executives can offer their input into the process of creating communications that are compliant, and then have that input applied across all channels that the marketing executives is looking to execute against.  For more information on how CCM solutions can help mitigate risk in your customer communications, check out the complimentary Quadient whitepaper "Integrating Compliance into Innovation: Taking Control over Customer Communications".