Finacle Whiteboard

Most bankers would have to nod their “yes”. And that’s unfortunately going to hit them where it hurts most – their customer retention and advocacy stats.

It’s really not so difficult to understand why banks investing so much in otherwise strengthening customer relationships will still not achieve desired customer-loyalty, if they do not take customer management and related issues straight into the board room. Would you commit to a deeper relationship with a person or organization, if you didn’t feel truly ‘heard’ and valued? Why should your banking customers think otherwise?

And this raises more questions. Who actually owns the entire gamut of customer-centricity at the bank? Does someone need to have cross-functional responsibility, one not limited by line of business, channel of distribution or other delineation within the bank? At a time when operations, marketing, technology, information and every other functions is headed by a CXO, has the time indeed come for banks to vest all customer-related responsibility in a Chief Customer Officer (CCO), acting as the CEO’s ‘inner circle’? And just what would this do for the bank?

It would help banks cut out the noise of generic attempts and cater to the needs of individual customers. A significant step towards this would be to segment customers; not just by age, location, lifestyle, or size of portfolio, but a complex mix of these characteristics developed through insight from the customer herself. This means that there will eventually be a difference, however minute and subtle, in the way the bank tailors its offerings, communicates with each customer and outlines its value proposition, clearly need-based for that particular customer. And that can make all the difference.

And needless to state, the CCO will recognize the role that technology has to play in all of this, but also fully understand that technology in itself is not the be-all and end-all of customer-centricity; that there is an equally important aspect pertaining to creating and constantly reinforcing a strong and powerful culture of customer-orientation, and of processes that are meaningful.

Surely, progressive banks will want to capitalize on key initiatives leading to robust customer strategies and effective management of shifting customer demographics. And if this means getting the voice-of-customer to blend with the board room buzz…why not?

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Posted by Sanat Rao at 03:49 AM | Permalink | Comments (0) | TrackBacks (0)

There’s this joke someone cracked the other day. A young banker decided to get his first tailor made suit. He went in for his first fitting, put on the suit and preened himself in front of the mirror. Reaching down to put his hands in the pockets, to his surprise he noticed that there were no pockets. He mentioned this to the tailor who asked him, "Didn't you tell me you were a banker?" The young man answered, "Yes, I did." To this the tailor said, "Who ever heard of a banker with his hands in his own pockets?"

It’s not something we’d debate about today…banks don’t have it easy when it comes to retaining customers, and winning back their eroded trust. People out there seem to want it all…exemplary service, convenience and tailored products. And worse, they are willing to take their business elsewhere if they don’t get all of it and more. And what has that done to the bank next door? Well, they just went looking outside of the branch for answers.

But to make it all work while exploring direct and automated channels, like direct banking, I think banks will do well to adopt what we like to call ‘the 3E approach to business beyond the branch’. It’s all about enticing customers, enlivening the banking experience and enhancing technology muscle.

Setting up one-stop-financial e-shops, deploying online marketing and promotional strategies, or even conjuring offerings to bank the unbanked are great ways to start with the first E-entice. The product design-develop-deliver and distribute cycle must then be streamlined to ‘enliven’ the experience and technology ‘enhanced’ for greater integration and simplification of the IT landscape.

And it’s easy to see why. Revenue opportunities are shrinking, and branches are an expensive overhead for routine transactions. Why wouldn’t a bank want to put in place a cost-effective structure through different channels for both simple and advanced transactions like product simulation and tailored cross-selling? Today technology enables banks to automate a large part of their servicing requirements and this drives growth and profits.

I am sure, most bankers will agree with me when I say that with direct banking both the bank and its customers come out winners.

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Posted by Jaymalya Palit at 11:04 AM | Permalink | Comments (0) | TrackBacks (0)

One thing this melt-down has me doing more than ever is reading. Seems to me this is the best way to stay clued in to the market that’s turned quieter, as well as understand the mood of the moment. In any case, reading for me is one of those pleasures that clearly has great business benefits too.

Reminds me of how something that I read just before the melt-down set me thinking weeks later. It was a report about large US banks not investing in new integrated banking systems. In any case, historically they have always preferred the best-of-breed but siloed approach for their core banking. With the times turning turbulent, technology transformation is edging back onto their radars, as they look to work harder and smarter to emerge as leaders.

Loss of customer trust and the lack of integrated risk perception are now rousing these banks – driven mostly by ‘islands of automation’ - to urgent action. These are difficult times, when banks are revisiting their priorities and mandates to right the wrongs of the recent past. That’s when several of them will see that the siloed best-of-breed approach keeps them from accessing a unified view of customers, products and services. It has unfortunately created operational complexity and redundancy, which could well have been avoided. They will see how they have also been burdened by integration complications and costs they can no longer afford and worse, their ability to respond to a dynamic market has been severely impaired.

Though, inclined for decades to operate in a best-of-breed environment, these banks will increasingly see that an integrated yet modular approach to their banking platform can help them connect processes and information in a way that’ll enable them to flexibly react to customers and competitors.

Then of course, there’s the risk that change entails that these banks must contend with.

But, I believe, building an integrated yet ‘componentized’ setup need not be a risky undertaking. When fused in phases with the help of a trusted transformation partner, it can offer banks what a best-of-breed solution cannot – ease of use, agility, happier customers, lowered costs and increasing profits.

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Posted by Rajashekara V. Maiya at 10:59 AM | Permalink | Comments (0) | TrackBacks (0)