Finacle Blog

While we were at the neighborhood store, my 12-yr old niece, who until recently was a big fan of sugar and spice and everything nice, suddenly piped up “But, they are out of low fat yogurt!” The floor manager heard this and sent his assistant rushing to the nearest super-mart to pick up a pack of low fat yogurt in her favorite flavor – raspberry.

Little details matter and though, industries might be different the basics remain unchanged – strengthen your customer relationships so that your bank’s managers are in prime position to secure fresh business.

The world is seeing signs of impending economic recovery. However, banks have a long way to go before they can convince their investors to re-build an aggressive financial portfolio. The onus of resuscitating investor confidence lies with relationship managers, who must nurture client relationships during this challenging phase. That calls for a combination of foresight and insight. 

Now is a good time for relationship managers to deepen their knowledge of customers, extending beyond the scope of the portfolio that is being managed. A 360 degree view of the customers’ financial position enables relationship managers to offer informed counsel, and highlights cross-sell opportunities both in the immediate and post-revival future. Of course, the advisory approach must also be refined to cater to customer-specific needs. For instance, while young investors may still be encouraged to create an equity-heavy portfolio with a long term capital appreciation objective, the same advice cannot be offered to mature customers. Chipping and changing existing portfolios to reflect new market realities can also deliver incremental benefits to clients.

Banks must equip their relationship managers to stand up to these challenges by providing them the necessary tools of the trade in terms of customer and product information, industry analysis, financial predictive and modeling tools and a ubiquitous delivery mechanism. By doing so, they can hope to see their relationship managers delight their customers no matter what the weather.  

Posted by Gautam Bandyopadhyay at 4:53 AM | Permalink | Comments (0) | TrackBacks (0)

The economic environment is barely predictable, bringing with it unforeseen forces that sometimes shake the very foundation of the banking industry. In my interactions with the moguls of the industry a key facet, which emerges time and again, is the need to build organizations that are able to engage, satisfy and deliver greater value to stakeholders on a continuous basis.

The DNA of such organizations is not only ingrained with clear and consistent vision and growth strategy, but also with highly motivated and committed staff. Blogs, thought papers and case studies reiterate the importance of effective communication channels between the management, front-end staff and customers. And sound technology often forms the spine of such successful banking enterprises.

With the market flooded with core banking solutions the Gartner Magic Quadrant comes as a very handy analysis for comparison and information on International Retail Core Banking (IRCB) solution providers. The Gartner Magic Quadrant IRCB report*  “assesses the suitability of core banking system providers and their product offerings to address the impact of these and other trends in the IRCB market.” Earlier this month, Gartner, Inc. released the “Magic Quadrant for International Retail Core Banking (IRCB)” report for 2009 which evaluates and rates the vendors based on their completeness of vision and ability to execute,  clearly positions vendors as Leaders, Challengers, Niche Players or Visionaries.

Though guided by the report, at the end of the day, banks looking towards core banking transformation to bring about cost benefits, operational efficiencies and customer satisfaction, will do well to seek a partner in possession of strong banking market understanding, with ample competence to work in a highly integrated environment and capable of executing on a strategic road map.

*Gartner, "Magic Quadrant for International Retail Core Banking"  by Don Free, 8 July 2009
Magic Quadrant Disclaimer
 
The Magic Quadrant is copyrighted 2009 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period.  It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant.  The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Posted by Rajashekara V. Maiya at 4:42 AM | Permalink | Comments (3) | TrackBacks (0)

We’re up to our ears in cost cutting anecdotes about diverse (some frankly bizarre!) measures that banks have adopted to weather the economic storm. Sure, cost consciousness is a good thing, but a slash and burn policy may actually cause more harm than good in the long run. The real need of the hour is improvement in efficiency. Yes! This calls for some cost cuts, but banks must be watchful against missing the woods for the trees.

Many roads lead to banking efficiency and each bank must choose its own path. Improvement of process efficiency is a no-brainer – while legacy-engined banks must bite the transformation bullet, even those with modern systems can revisit processes to bring down error incidence, improve reliability or remove redundancy. Raising productivity is another imperative – rather than fire, banks can choose to redeploy personnel or utilise them better by allocating cross-functional responsibilities. Another good idea would be to identify those activities conducted as a routine, without a significant decision making component and try to automate those pieces. And then where decisions need to be taken, processes must be streamlined, attached to a workflow, monitored and tied to an SLA – thus you get tighter control and greater productivity. Some more examples: Marketing budgets last longer when spent on cost effective media such as web 2.0. Cash can be made more productive by maintaining lower inventories at ATMs and branches. And a single integrated IT platform can do the work of many applications that currently operate in silos.

Banks can re-visit their product and channel mix to fortify the profitable elements and do away with loss leaders. It’s not always necessary to build one’s products. Sometimes a buy or ally decision makes better business sense - the success of bancassurance is ample proof of that. The customer mix can also be made more productive by retiring those in the bottom tiers creating no value but on the contrary eating into the profit pool.

Those banks that have stayed within the traditional mould must open their eyes to new business models. Outsourcing of non-core operations can deliver higher employee productivity and lowered overheads. The shared services route is worth exploring for smaller banks.  Entering a new market with a low cost direct banking model curtails both initial expenditure and risk.

Clearly, banking efficiency improvement calls for a well-rounded approach. It’s not necessary to cut back on coffee and paper napkins, after all!

Posted by Chandramouli Kundagrami at 11:17 AM | Permalink | Comments (2) | TrackBacks (0)

So, who hasn’t suffered a sub-standard airline in order to earn reward miles? Or shopped till one dropped using a credit card that promised three times the usual points?

 

At a time when markets are ruled by fickle customers, businesses of every denomination are scrambling to retain them. However, barring the odd exception, banks’ loyalty programs are longer on rhetoric than ideas. Most programs reward those who transact frequently. And therein lies the fundamental flaw – since banking is essentially about relationships that could last even a lifetime, it is somewhat myopic to only reward a certain type of transaction behaviour. Then again, loyalty programs favour the already loyal. While this is understandable, shouldn’t they also target those who are not? Therefore, it is no surprise that loyalty programs have failed to enthuse both customers and banking organizations.

If banks expect their loyalty programs to deliver, they need to break the mould. For starters, the programs must reward the depth and longevity of relationships and not just their dollar count. They must be made more accessible to the lowest customer segments. ICICI Bank seems to have the right idea with their rural business loyalty program. Banks can even consider rewarding communities such as families, club members or co-workers as a whole. Loyalty programs can also be a medium to encourage desirable behaviour. In a marked departure from the banking norm which penalizes branch customers, Barclays Bank awards points for usage of self-assisted channels.

Finally, banks must come to accept that shopping vouchers and gift hampers are passé. They need to offer creative reward options, which are both relevant and aspirational to their customers. Then again, some customers care more about recognition than reward – so what can their banks do to show their appreciation?

Here’s the acid test - successful loyalty programs are those that draw customers within their fold. To quote an anonymous wise one, “Loyalty demands participation, the rest is simply wishful thinking.”

Posted by Jaymalya Palit at 4:26 AM | Permalink | Comments (0) | TrackBacks (0)