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January 9, 2013

What's Hot. What's Not. For Banking in 2013

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 4:59 AM

Smart financial services institutions are looking closely at how to optimize what they do and how to provide stellar customer service. I can also see that in the following year, commercial banks will be thinking more about how to burnish their product lines. It's going to be an interesting 365 days ahead.

I do my banking with two regional banks. One bank gives away pocket calendars. The other gives away ballpoint pens. I, of course, see the sentiment behind both these customer-friendly gestures. And yet, I can also see that in the following year, commercial banks will be thinking less about stationery giveaways and more about how to burnish their product lines. That's because, while some banks are squeezed for revenues, all of them are facing another year in a slumping global economy.

Smart financial services institutions are looking closely at how to optimize what they do and how to provide stellar customer service. In fact, Infosys recently published a list of 13 banking trends to look out for during the coming year. The list is worth a closer look, especially for those of you who work in the field and are thinking about how to make your organization more efficient than ever before. Here's a quick view:

Real-time analytics. Banks will look at what branch you're at (or at home on your computer) and will combine information like the nature of your transaction to provide you with real-time, location-based services. 

Transaction equals intelligence. The history of your transactions tells a bank what kinds of services and products you're most likely going to want down the line. These "contextual offering" will continue to be hot in 2013. 

A place at the blackjack table. Banks are tapping into the virtual gaming world. Online gambling has been around for 15 years, but financial services institutions are only now finding ways to charge fees for facilitating end-to-end payments of virtual currencies. It's a huge chunk of the online world - why not be a service provider to it?

Social media's next step. We're all aware of the importance of social media for any organization. But banks are recognizing that peer-to-peer recommendations aren't just for restaurants and doctors. Tapping into their discussions is also a great way to develop new products. 
The new gang of four. Banks will be collaborating with retailers, telecoms, and technology companies to come up with new services. The best part of this "co-creation" is that these organizations can bundle them with other offerings and go directly to the customer with a suite of products.

Tellers tell us a thing or two. The teller is a bank's primary connection to its customers. They already know what our likes and dislikes are. So why shouldn't banks treat tellers like the trusted salespersons they've become? This shift - engaging customers with faces they already know - will put banks at a tremendous advantage when it comes to selling new products.

65 is the new 30.  Banks have spent a lot of time attempting to attract so-called Generation Y customers. But they're realizing that their best customers have always been there: Elderly people with considerable savings, brand loyalty, and a penchant for simple products. 

Life stage or lifestyle? Don't trust those demographic studies that claim to target a customer by his level of education or marital status. A sample group might not share the same needs even if, say, everyone in it all have college degrees. Geography, culture and interests also define their banking solutions.  And the technology now exists to parse those segments into actionable marketing.

Baby steps are better than the Big Bang. Smart banks are phasing in new technological offering on an incremental basis in order to avoid disruption. 

Real estate ... on the cloud.  If you're a CIO who hasn't gotten his bank onto the Cloud, then 2013 is the year to do so. Try one of the big three - infrastructure, platform, and software-as-a-service - to test things like end-user computing, payroll processing, and procurement on the Cloud. My hunch is that you'll be glad you did.

IT the problem becomes IT the solution. Not to sound too much like a psychologist, but if you're grappling with legacy systems, then you need creative thinking as to how to build new self-healing IT layers. Build these new layers with simplification of processes and increase of automation in mind.

And the right outsourcing model is...Outsourcing doesn't have to be an either-or proposition. In 2013, banks will be outsourcing the right processes to the right IT partners. Doing so will save everyone time and money.

Mobility as troubleshooting device. Your customers live and breathe by their mobile devices. Over the coming year, smart banks will realize that they can address IT issues by tapping into the mobile mindset.
It's going to be an interesting 365 days ahead.


Customer centric services will be on the rise in Indian banks. Customers will increasingly experience offers of cross sell and up sell from the branch, internet, mobile or social channels. Core banking solutions will step up to embrace this need aided by data analytics and mobility.

I was holding a conversation with a senior banking officer on the evolution of banking software in India. The bank is utilizing a leading core banking product. However, the banker complimented one feature of Finacle UBS which he has been made aware of. This indicates bankers of earlier generation are welcoming and keeping abreast of technology innovations

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