A To Do List for Survivor Banks
Allow personalisation and participation. With banks fighting to reclaim their trust and their patronage, consumers have the upper hand once again. And they're flexing their muscles, demanding greater fulfilment and participation in return for their business. Therefore, expect the trend of product personalisation and consumer involvement in shaping both opinion and new offerings, to continue.
Bring in best practices. In an uber-connected world, banks compete for customer mindshare not only among them themselves but also with other industries. So, it's natural that they're expected to evolve the same as anyone else. Some other industry best practices worth considering - creating closed loop communities to foster peer interaction, humanising self-service channels with intelligent technology and enabling end to end online transactions.
Manage risk. Tighter regulation is here to stay, with not just lawmakers, but even consumers insisting on compliance. The industry's response will be twofold - complying with capital, KYC, lending norms etc. to mitigate risk, and acting with integrity and openness to restore its reputation. Moves such as stronger customer identification and multi-layered transaction authentication will gather pace.
Soothe apprehensions about restructuring. As banks reorganise either as a matter of consolidation, merger or optimisation, they must have a plan for reassuring their clients about the need for such change. Mostly, customers will worry about how the new entity will treat them. Will the bank charge more or impose new processes? Will they retain their erstwhile privilege status? It's important to set the record straight at the earliest and also let customers know about any benefits anticipated from the reorganisation.
Don't just compete, collaborate. There are other ways to engage competition, besides all out war; I foresee more co-opetiton between banks with complementary strengths. The threat of disruptive competition - such as P2P lending platforms from Internet companies, m-payments from telecom operators or consumer financing from retailers - will rise as players from outside the banking space enter the fray.
Make use of partnerships. Banks must draw upon the collective strength of their partner eco-system to better fulfil various expectations through product, technology or distribution alliances. They must nurture their partners' performance by equipping them with the required tools and knowledge, and by involving them closely in both operational and strategic matters.
Go green. Eco-consciousness is no longer just nice to have. With green regulations becoming mandatory, banks need to pay more than lip service to sustainability. On top of e-statements and branchless banking, expect to see a reduced carbon footprint through sustainable lending and green infrastructure.
Make use of technology. Technology will sharpen the competitive edge by improving efficiency resource utilisation and customer service. Emerging technologies in the area of NFC, Biometrics, Smart Cards and Cloud Computing could be the next game changers, rewriting the way banks go about securing transactions, spreading inclusion and acquiring software.
Needless to say it is not enough to simply 'tick' the activities in the checklist and move on. Banks must introduce a sound innovation strategy which permeates all business levels and empowers them with a combination of agility, efficiency, diversity management and growth. There is no doubt - Innovation is a continuous cycle.
