Technology Drives Retail Banking
Arindam Mukherjee, Head, Sales - Banking and Financial Services, Cisco India and SAARC
The article was published in the Consultants Review Magazine
Banks operate in a challenging world of rapid technological change, technology-savvy customers, and increasing expectations. Today’s retail banking customers use social and mobile platforms excessively to exchange information both personal as well as professional, and demand an ‘always connect’ mode across their device of choice. In this environment, banking through disparate and insufficiently coordinated channels is quickly becoming obsolete.
The rise of younger generations is having a profound impact on retail banking, providing the next opportunity for revenue growth. Gen Y and Gen X customers still trust their banks and want them to be their primary providers of advice. Younger customers want banks to address their needs using the tools they and their peers have adopted, including mobile devices, video, and social networking - and they are willing to switch to banks that embrace these technologies.
Like their customers, the next generation bank employees expect their workplace to be mobile. Whether enabling work to be done on a “bring your own device” (BYOD) smartphone or tablet, accessing their virtualized desktop across various endpoints, or empowering a subject matter expert to service banking customers wherever they may be physically located, employees demand workplace flexibility.
Concepts like Omni channel banking which allows customers use the channels they wish to use for their banking transactions is the new normal. For example, they can begin an interaction using one channel (mobile while at home) and end it in another (branch while on the way home from work). While the branch continues to be the preferred channel for personal attention and advice, including new services, the Internet is the most preferred virtual channel for conducting banking transactions such as managing accounts and transferring money. The Omni channel branch - a mix of virtualized expertise and staffing, with a focus on advice and personal attention - is a winning strategy.
Tech trends that impact:
According to a Cisco survey of 7,200 banking customers in 12 countries, technology enabled market disruptors like the Internet of Everything (IoE) and service enabled by IoE will help banks keep pace with customer demand by adopting solutions that offer expert advice, value-added services and convenience, whenever and wherever customers need them and do so securely.
IoE which is the networked connection of people, process, data and things makes it possible for banks to offer a more relevant, engaging, and convenient experience for customers. A Cisco study predicts that $14.4 trillion of value (net profits) will be at stake globally for private-sector companies over the next decade, based on their ability to harness IoE - with $3.7 trillion of this value arising from improved customer experience. For retail banks, this includes various levels of personalized interactions.
As we move into an IoE era, solutions that leverage video, mobility, and social media can enable banks to conduct customer transactions seamlessly irrespective of their physical location in real-time. According to Cisco, a typical bank that becomes as digitized while aligning with its customer expectations can see a 5.6 percent bottom-line increase globally and in India IoE will result in 11 percent increase in bottom-line improvement for banks.
According to the latest VNI report, India will have over 650 million smartphones by 2019. The sheer number of devices (including mobiles) that have the potential to be connected offers banks tremendous opportunities to offer cutting-edge services through IoE-enabled solutions. These services offer banks a two-fold advantage, one, it enables them to reach the customers where they ar - resulting in increased engagement, and two, it allows the banks to save on physical infrastructure costs and deploy additional investments in technology infrastructure that could offer them a better return on investment.
The emergence of IoE means that numerous new connections will generate huge amounts of data. As big data grows, the challenge to achieve better business outcomes and deliver better customer experience will become necessary. Banks must leverage the power of data and analytics to improve processes and profits or to reduce costs and risk.