Finacle Blog:Banking channel innovation: Not over and done with

If I had to name one facet of banking that had changed beyond recognition, it would most certainly be the delivery channel. It’s quite unimaginable how banking services has freed itself from the clutches of the branch to become available all the time and everywhere!

There are interesting channel options emerging today - be it the new-age mobile or secure self-service kiosks. Even the ubiquitous TV and VoIP phones are not left behind as innovative bankers are all set to make channels out of them. Needless to reiterate, its technology that’s driving this phenomenon. With delivery channels making so much progress, is there room or need for further innovation? A resounding YES to that!

Banking is becoming increasingly commoditized, leaving little to choose between the offerings of competing banks. It follows that banks must differentiate themselves through their services. At the same time, efficiency and cost optimization are among the industry’s topmost priorities. Banking channel innovation can potentially enable banks achieve all these objectives and more.

I can cite several instances of how channels can be used as tools for improvement of customer engagement and experience. Some banks have revitalized their Internet channel, allowing greater personalization of pages. U.S. banks are reaching money transfer services to the largely unbanked Hispanic segment through non-banking channels, with the expectation that this will lead to a formal relationship in future. Several Credit Unions have latched on to new channels springing up in the Web 2.0 space offering innovative services such as peer to peer lending.

Channel innovation can improve process efficiency for the internal organization as well as the customer. The personalization of Internet banking pages with a set of “favourite” options allows users to proceed directly to frequently used transactions. Banks can improve the reach and efficacy of their helpdesk, employing fewer human resources, through audio-video remote advisory services delivered over kiosks, ATMs, mobile and Internet.

To top it all, channels gather data which can be processed into valuable customer insight to help banks understand customer behaviour and predict future trends – a pre-requisite for identifying new business opportunities.

Surely, these arguments seal the debate in favour of channel innovation? What say?