Future Co-Creation Must FacilitateCustomer Self-DeterminationUniversal Banking Solution System Integration Consulting Busi...
The co-creation of today is limited.                   monthly usage of different services including                      ...
other refine their approach. Blogs, ratings and        Co-creation is a continuous journey.reviews, FAQ and contextual sea...
Thought Paper: Future Co-Creation Must Facilitate Customer Self-Determination
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Thought Paper: Future Co-Creation Must Facilitate Customer Self-Determination

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In the seven years since the renowned duo of C. K. Prahalad and Venkat Ramaswamy made the term ‘co-creation’ famous, what has been its progress, especially in the banking context? And where is it headed? Let us take stock....

For a customer shopping for banking products – whether online or across the table – the choices are fairly limited. So is the flexibility to create the ideal, completely customized product. When the customer is allowed to bundle a few products together, it is the bank that has the last word in what is permitted and what is not, and therefore, that decision usually goes in favor of products that need pushing.

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Thought Paper: Future Co-Creation Must Facilitate Customer Self-Determination

  1. 1. Future Co-Creation Must FacilitateCustomer Self-DeterminationUniversal Banking Solution System Integration Consulting Business Process Outsourcing
  2. 2. The co-creation of today is limited. monthly usage of different services including the number of check leaves, online bill paymentIn the seven years since the renowned duo of transactions, ATM withdrawals, and so on,C. K. Prahalad and Venkat Ramaswamy made based on which the fees that the customerthe term ‘co-creation’ famous, what has been its must pay or the interest that he will earn, willprogress, especially in the banking context? And be decided. Hence, the customer is able towhere is it headed? Let us take stock. determine charges and interest rates along with his pattern of usage of the bank’s productsFor a customer shopping for banking products – and services. On top, a basic account orwhether online or across the table – the deposit product may be clubbed with mortgage,choices are fairly limited. So is the flexibility to insurance, cards, etc., each one made availablecreate the ideal, completely customized product. to the customer at a unique price.When the customer is allowed to bundle a fewproducts together, it is the bank that has the In fact, this concept is not as far-fetched as itlast word in what is permitted and what is not, sounds. The hospitality industry is among thoseand therefore, that decision usually goes in favor to have taken the lead – some restaurantsof products that need pushing. around the world allow patrons to pick every ingredient that they would like put into theirWhat’s more, because product information food. Why not banking?available online is often quite thin, the customerneeds to visit a branch or physical outlet in Co-creation must also be about experience.order to put a suitable package together.More often than not, the only value of a Extending this thought, co-creation will alsobundled offering is a price discount. Any encompass the channel of banking that isgreater innovation is usually initiated by the used to consume the bundle of products andcustomer who is trying to fulfill a specific need; services – indeed the entire experience itself.unfortunately, banks don’t make it easier by The customer will co-create the screen that willproviding tools to facilitate the process. This is greet him at the ATM, choose the technologiesthe extent of co-creation that most banks – give he will be exposed to, and select otheror take a few – offer their customers today. attributes of his usage experience (for example rich versus fast, assisted versus self-service).We give a broader meaning to co-creation of Just like a fine dining establishment thatthe future. panders to the seating, lighting, food, beverage and service preferences of its customers, inIt is probably evident by now that this paper future, a bank will be able to provide exactly thatassumes a broader definition of co-creation than kind of experience which the customer co-creates.that which we are used to. Indeed, here wetake co-creation to mean enabling a customer to Banks must provide the necessary tools ofdefine banking products and services – whether co-creation.at a broad or granular level – to suit every needand context. This is a vision of co-creation in In addition to providing the facility to createthe future when a customer will not only be able personalized products and experiences asto put together banking products ground-up, described above, a bank must enable thebut also negotiate (or co-create with the bank) customer to analyze the efficacy of his creation.a unique tariff where the pricing is based on This entails making detailed information aboutthe consumption of products, services and others’ co-creation experiences – gathered fromtransactions. Hence a co-created ‘product’ of various channels including social networks –the future will be a combination of customized available to the customer to help him assessofferings as well as a very specific, customer- which options work best for him. One way to dodetermined menu of charges and rates that will this is to bring customers with a similar profilebe applied to his account depending upon his and financial need together in a closed looputilization of services. The product definition online forum where they can trade notes aboutwill have minute details about the expected their past attempts at co-creation and help each Future Co-Creation Must Facilitate Customer Self-Determination
  3. 3. other refine their approach. Blogs, ratings and Co-creation is a continuous journey.reviews, FAQ and contextual search are otheroptions worth considering. However, putting the above measures in place alone does not guarantee co-creative success.Providing such support to customers becomes Banks need to take a planned approach –more and more important as the choice and founded on clear communication, marketcomplexity of co-creation increases. Besides knowledge and keen awareness of intellectualdiscussion forums, tools such as illustrators and property protection – to sustain co-creationvirtual advisors can also improve customers’ over the long term. Motivating co-creators issuccess at co-creation. equally important. Banks that have encouraged co-creation by inviting customers (and alsoIllustrators are simple applications, also available ecosystem partners) to participate in theironline, which can project the outcome of innovation and product development processesbundling together a set of products, services, have lowered their product development costchannels, and so on. In the case of a basic and lead-time besides gaining advance insightbanking product bundle, an illustrator will be into emerging market trends. They must exploitable to calculate the charges that the customer these advantages to fuel further innovation bywill have to bear or the interest that he will passing on some of the benefits to co-creatorsearn. As the co-created bundle becomes more in the form of incentives, or in the futuresophisticated – comprising wealth management co-creation scenario, share the fees that theyproducts or stocks and shares, for instance – earn by selling a co-created product to otherso does the projected outcome, to include customers, with the customer who helped designparameters like annualized return, capital it in the first place.appreciation and tax savings. Going ahead.At the same time, banks must be there “inperson” to help customers co-create well. By expanding the scope of co-creation as perTowards this, they must have a team of virtual the definition used in this paper to allowadvisors, who as the name suggests, are customers a much bigger say in the productsfinancial experts who provide guidance over and services they consume, forward lookingonline channels, through the medium of text, banks can reap several additional benefits,web and video chat. The advisors’ role must be including but not limited to, differentiation,to direct customers towards choices that are loyalty and business growth. And althoughbest suited to their circumstances, help them the focus of this paper is customer-driventake decisions and gradually give them the co-creation, banks can apply the same principlesconfidence to act on their own. On a related to nurture innovation within their partnernote, even front line customer service executives ecosystem by supporting participation from themust be trained in the use of various tools likes of independent financial advisors, mortgagethrough which they can assist customers consultants and direct selling agents who carryin co-creation. a wealth of new ideas.Finally, there must be a way for a customerto refine his approach to co-creation, as heprogresses through his financial lifecycle. Thisis possible by providing him with easy to use Authordashboards or graphical reports comparingintended and actual scenarios of product, Chandramouli Kundagramiservice and channel utilization as well as the Finacle – Industry Principalcorresponding outcomes in terms of charges Infosys Limitedand earnings. Future Co-Creation Must Facilitate Customer Self-Determination

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