Perspective- Multi Channel Banking: A Five Point Strategy


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The last two decades have witnessed a paradigm shift in the way people bank. While the shift from branches to ATM based cash withdrawals and from there on to internet banking was slow, it has been a different story in the case of mobile banking. The growth in adoption of mobile banking over the last three years has been tremendous. Many banks have rolled out internet banking, mobile banking, call centers, ATM based transactions and video banking. But, have banks moved from multiple channels to true multi-channel banking with seamless cross channel experiences?

Here we explore a five point strategy that would empower banks and financial institutions to define a robust multi-channel offering.

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Perspective- Multi Channel Banking: A Five Point Strategy

  1. 1. Multi-Channel Banking: A Five Point Strategy Universal Banking Solution System Integration Consulting Business Process Outsourcing
  2. 2. The last two decades have witnessed a 2.0 and social media, understand customers,paradigm shift in the way people bank. While and also allow them to choose requiredthe shift from branches to ATM based cash services through channels or let them designwithdrawals and from there on to internet the products they need.banking was slow, it has been a different storyin the case of mobile banking. The growth in 2. Define the role of channelsadoption of mobile banking over the last three Banks and Financial Institutions embarkingyears has been tremendous. Undoubtedly, the on a multi-channel banking journey shouldchanging needs of the digital generation and identify and define the role of each channel.the advances in internet and communication Define the products and services that couldtechnologies have jointly played a key role be offered via different channels and theirin the evolution of channel banking. The convergence across multiple channels andcontribution of social media has been significant devices. Customer segmentation plays a keytoo. The innovation agenda of solution providers role here too. For example, a digital consumerand financial institutions has further spurred might prefer getting a two way alert on theirthis evolution. mobile to make a bill payment, whereasMany banks have rolled out internet banking, someone from an older generation mightmobile banking, call centers, ATM based prefer getting a telephone call remindingtransactions and video banking. But, have them to write a check for the bill payment.banks moved from multiple channels to true Open up certain channels to selected customermulti-channel banking with seamless cross segments as a pilot phase - maybe videochannel experiences? Have banks been banking for the digital generation and TVsuccessful in defining their multi-channel strategy? banking for home makers. This would helpIs self-service the sole consideration for multi- in defining the right channel to meet thechannel banking? What is the future of the expectations of different customer segments.branch in the multi-channel scenario? The investment priority of banks and financialHere we explore a five point strategy that would institutions should be based on their currentempower banks and financial institutions to customer segments and projected customerdefine a robust multi-channel offering. segments. A public sector bank, with minimal Gen Y customers, targeting to increase their1. Recognize your customers’ needs Gen Y customer base may launch video banking to attract more Gen Y customers. The first priority would be to recognize It is also advisable to go with a phased customer needs. Banks need to understand approach, rather than launching multiple new what products customers want, what services channels at the same time. Allow customers they expect and also when and how they to use one new channel and get acquainted expect the service to be delivered. For with it, before the next one is launched. example, try to understand as to which segment of customers would prefer making 3. Promote channels usage payments via mobile devices, which segment through internet banking and which segment Ensure that customers appreciate the through branches? Check if customers would benefits of using different channels than be delighted to have accounts opened online using traditional branches for all banking instead of visiting the branch? related services and operations. Concerns about “security” and “user experience” are the Engage with customers and let them know major reasons which prevent customers from you care by personalizing services to suit moving away from branches. their specific needs, right from the onboarding process. Web 2.0 and social media have Deploy robust security frameworks, opened up a plethora of options to stay authentication mechanisms, and fraud connected with customers and to know detection and prevention methods and exactly what they think about the services reassure customers that their identity and offered. Leverage the capabilities of web savings are secure. Use multi-channel alerts Multi-Channel Banking: A Five Point Strategy
  3. 3. to keep customers informed about every key by replying YES or NO. This innovation, while transaction taking place in their accounts. being simple, was the solution for a very Let them chose what event they want to be common problem faced by customers and alerted about, when and through which went a long way in delighting customers. channel. Increase security awareness through Video based interaction with relationship video demonstrations and face to face manager while banking through digital interactions wherever possible. channels is another example of innovative steps taken to ensure customer satisfaction. Research indicates that persona based user experience enhances the usability of channel 5. Measure solutions. Redesign channel user experience to include rich internet applications and web It is important to define relevant metrics to 2.0 elements to engage the social media evaluate the performance of multi-channel savvy young generation and to make it banking. These could be based on revenue, simple and intuitive for other generations. increase in customer base, increase in Ensure that the experience across channels conversion rates or even reduction in branch is consistent; so that customers do not feel based transactions. Banks can invest in lost when they navigate across channels. layered analytical solutions that provide Seamless and contextual cross channel actionable insights by combining data from experience is absolutely necessary for the multiple sources and channels. These success of multi-channel banking. Incentivize insights can be used to enhance customer customers for using different channels and experience. Continuous evaluation of metrics shorten the queues in branches. Provide and taking preventive measures are required online assistance to customers to familiarize to ensure that customer satisfaction is them with the usage of different channels. never compromised. While doing so, it is also important to ensure What lies ahead? that channel solutions continue to offer the human touch which customers are accustomed Smarter devices, newer modes of communication to while banking through branches. and a techno savvy digital generation - all indicate a bright future for multi-channel banking. The4. Innovate internet channel is a catalyst for multi-channel Banks and Financial Institutions should banking adoption. As technology vendors and continuously innovate and differentiate solution providers continue to innovate, banks themselves in the hypercompetitive financial and financial institutions should collaborate with services industry. Digital wallets, personal them to offer banking services innovatively financial management, contactless payments, through newer channels for keeping customers social banking, remote check and cash delighted. The goal should be to deliver the deposits are the buzz-words in multi-channel right products and services to the right customer, banking today. An innovative way to instill through the right channel, in a personalized savings habit in teens is to create a gaming like manner without compromising on the human experience in online banking. touch inherent in bank branches. After all, as with any business, loyal customers are the ultimate Innovate incrementally. Banks need to come testimonial to the success of a bank. up with innovative ideas that can solve common problems faced by customers. Take Authors the example of payment alerts. These were being sent to customers to remind them about Arunnima B S pending payments. But busy customers Principal Consultant, Finacle Product Strategy missed the reminders and still ended up Infosys paying late fees. Banks then began delivering Sudha Annie Saigal actionable or two way alerts which reminded Senior Associate Consultant, customers about pending payments and Finacle Product Strategy also allowed them to make instant payments Infosys Multi-Channel Banking: A Five Point Strategy