Finacle Blog

You'd think that the bank branch would have suffered amidst the hype about electronic channels. Well, think again. A study of 4,500 customers in U.S.A and Canada showed that two out of three had visited a branch in the past one year, and this was the most popular channel by a distance. Except in 2010, the number of branches has risen consistently in the U.S. since the mid 1990s. The global branch density stands at about 450 per million people.

Which other channel can match the comforting ambience of a branch or its rapport building effectiveness? But as the most expensive channel by far, the branch isn't a viable conduit for customer acquisition or routine transaction fulfilment. Leave that to the Internet or to the sunrise channel of financial services - mobile banking. Instead, banks must use the branch for high-margin wealth management advisory activity, or to serve 'mission critical', which is the restoration of customer trust. Customers feel reassured when they see their branch functioning as usual, and banks can capitalize on this chance to show that all is indeed well.

But to do so, banks need more than a skin deep approach to relationship building. Everything about the branch - whether it is staff productivity, energy efficiency or customer service quality - must 'speak' about the bank's long-term stability and commitment to customer and community interest. If branches can even reclaim a part of the trust that banks have lost, their high costs won't seem that bad.

Posted by Rajashekara V. Maiya at 3:56 AM | Permalink | Comments (0) | TrackBacks (0)

Banks are finding that customer acquisition and retention is like climbing a slippery slope and so are doing everything possible not to lose their grip. Over the years, they've discovered new, innovative ways of reaching their customers, to the point of following them wherever they go.

But now, access is mere hygiene. Given the relentless pressure of competition and the need to differentiate, reach is all about engaging closely with customers and insinuating oneself into their emotional space. Which is impossible to achieve with a clinically efficient but totally impersonal channel experience.

Asking customers to walk into a branch for a face to face is obviously not a viable option. So what can banks do?

The answer lies in upping the interactivity of new channels so that customers can connect with their banks on a variety of issues even as they go about their mundane transactions on their own.

Social media is made for this. Look at all the conversations happening out there amongst friends, peers and their wider circle of influence. It's a cinch for banks to reach interested prospects through targeted advertisements on discussion forums or getting existing customers to recommend their services within themselves. Many banks are trying to harness the power of social networking by registering a strong presence on Facebook ,Twitter et al, even dedicating an identifiable person to participate in their interactions.

Humanising ATM, kiosk, mobile or Internet banking with an option to video chat with a bank executive will go a long way in making customers comfortable with non-branch banking. So will co-browsing - getting the service representative to view the same screen as the customer - while trying to solve a slightly complex problem. 

Banks can also improve the effectiveness of their digital campaigns through interactivity - using analytics to tailor their messaging to the current context or interaction to make sure that communication right-sells rather than carpet bombs.

What else?

Posted by Arunnima B S at 4:59 AM | Permalink | Comments (0) | TrackBacks (0)

There are several good reasons why banking innovation lags the drive and imagination of other industries. I won't go into those. Banking innovation has always operated within a restricted area, but of late, it has also become less remarkable. With most banks having access to similar technology, creative ideas are easily copied, leaving very little advantage for the first mover. The result is uniform, incremental and contemporaneous change across the industry.
 

So, my question is, is this really innovation? When was the last time we saw something which revolutionised the face of the industry or at least set a bank apart?

Thankfully, I'm not the only one asking these questions. Lately, there is evidence of some banks taking bold steps towards 'true' innovation. Some quick examples - Amex's tie up with Zynga allowing card reward points to be exchanged for virtual goods in the latter's online games and Standard Chartered Bank's eight minute service pledge for in-branch transactions, which if broken, yields a contribution from the Bank to charity. These banks are breaking the traditional boundaries of innovation which was limited to channels or products, to bring creative ideas to the customer domain. I am optimistic that this is only the beginning.

So, what could other banks still trapped within the old innovation framework do to expand their horizons? 
• Enjoy being challenged. Create a cultural shift of encouraging rather than resisting change and new ideas.
• Pursue diversity. Hiring people with different skills and backgrounds creates variety in thinking.
• Strike a theme. Know where you will innovate and where you will not. Beware of herd mentality.
• Keep it simple, so that everyone can understand and get involved.
• Be prepared to fail, and have a Plan B in place.

Posted by Anuradha Mallya at 5:20 AM | Permalink | Comments (0) | TrackBacks (0)

It's no longer a one-way push for multi-channel banking; customers want it too. But in extending the banking channel to a host of devices from the ATM to the tablet, have banks made things more complicated for their customers? Think of the multiple passwords, security questions, alert options, favourites....and you get my drift.

While customers must put up with the 'inconveniences' of security, their banks can make the multi-channel experience easier with user-friendly personalisation. How about taking the concept of seamlessness a step further by enabling users to set their preferred options once, in one channel - most likely the Internet - which are accessible on all the other channels as well? Or for the internet- savvy, an alternative option to set over the Internet banking site, different personalisation preferences for the ATM, mobile, telephone banking and so on. Suddenly, personalising the Internet banking page becomes more meaningful to users, because it enables them to go beyond cosmetic customisation to set preferences that really matter - like the menu they'd like to see at the ATM or determining which alert must drop into their inbox and which must land on their mobile phone.

Think about it. This can improve experience in so many ways - customers can quickly get to the functions that they would use each channel for, without lengthy preamble; minimise the distraction of receiving the same alert over multiple channels; or ensure that they don't miss out on a priority activity like a school fee payment, by setting the alert option on their mobile banking service to remind them on a certain day to finish the job.

While improving the multi-channel personalisation experience, banks must bear in mind that not all customers are well-versed using Internet; hence, besides enabling digitally advanced users to tweak their own pages, they must offer the services of a customer service executive to help their less internet savvy customers get started.

Posted by Arunnima B S at 6:02 AM | Permalink | Comments (0) | TrackBacks (0)