Getting Closer to the Customer

Pranay Jhaveri, VP Sales, Cisco India and SAARC

Consider that a retail bank wants to reach out to certain customers with a new scheme for attracting deposits but is compelled to wait for a 6-month period because the solution needs to be configured on to the company's internal IT infrastructure. In such a scenario, the scheme may not remain attractive for customers because another bank might approach the market with a better offer in a shorter time span. The end result can be entirely different if the retail bank has an agile and scalable IT system, which will allow making changes and streamlining processes like accounting, on a real-time basis.

This means that banks need a secure, reliable and sophisticated information management system in order to quickly adapt to market and business changes and effectively cater to the diversified needs of consumers. Understandably banks are on the lookout for unique business models that help them stand up to competition and achieve their business needs in a timely manner. The need of the hour is for solutions that support both organic and inorganic growth. The bank mentioned above, if supported by an agile IT framework, will not only be able to create a scheme that meets customer demands, but also launch it well in time, and ahead of competition, thereby gaining the first-mover advantage.

IT adoption in the BFSI industry:
As mentioned above, an agile financial enterprise is one that can readily adapt to demands or changes in the business environment in a secure and cost efficient manner by using technology. The changes could be measured in terms of providing certain basic goods or services like on-demand banking, lesser waiting-time for walk-in customers, or a more sophisticated request like ensuring high levels of security for online banking or video banking/consultation services for High Net-worth Individuals (HNIs).

Findings from Ovum Global research indicate that investments in technology that provide customers access to banking services via the Internet, will experience an explosive growth of 33 percent to hit $9.7 billion by 2015 in India. With the boom in the rural Indian economy and the increasing penetration of the Internet, banks are attempting to reach out to a whole new group of customers located in rural, remote areas while also meeting the needs of the urban Generation Y individuals. Both markets require a unique set of products and come with their own set of disparate challenges.

In India small, regional and co-operative banks traditionally invest in technology to fulfill compliance and security obligations issued by the RBI, while large public and private sector banks invest in IT solutions for cost savings associated with the consolidation of storage, server, and data center-based applications, besides increasing productivity of remote branches.

Benefits of technology:
Technology enables banks to map a clear growth trajectory by focusing on increased top line growth while simultaneously managing costs. The right choice of technologies can help reduce cost, increase efficiency and consolidate the amount spent on expensive servers/data centers. Various business applications based on the Web, cloud and collaboration architecture can help in extending business reach and provide flexible work environments to increase productivity.

A regional bank can for example, invest in a suite of collaboration services and substantially reduce costs incurred due to physical travel. In fact, a Cisco Internet Business Solutions Group (IBSG) report suggests that retail banks can increase their revenues by 5 to 10 percent simply by delivering next-generation advisory services utilizing various solutions including personal financial management (PFM) tools, video, and virtual communities of interest.

One among the early adopters of technology, the State Bank of India (SBI) began attempts at modernizing its entire banking infrastructure as early as 2006. By deploying a sophisticated network of Converged Internet Telephony (IP) devices across more than 8000 locations with 11,200 IP phones, SBI was able to create a secure, reliable self service point of contact for customers while providing enhanced collaboration solutions and productivity for its staff in a cost effective manner.

Finding the right solution:
Adopting an architectural approach will help banks run multi-channel transactions simultaneously (Offsite and onsite ATMs, live banking, contact center and video banking) and become truly agile. With the advent of cloud solutions and services, banks can explore the use of private clouds to ensure high levels of security and diligence in data management and disaster management. Options like a Hybrid Cloud solution provide the flexibility of employing public cloud solutions for non-critical processes like digital advertising, queue management at the local branch or simply VXI consolidation.

In order to implement a stable and reverse-engineered architectural solution that can align business strategies with IT investment, banks need to partner with vendors and solution providers who have the capability and proficiency in design and implementation that enable to add advanced network capabilities in real-time. By adopting the architecture as a network platform’ approach, vendors can help create scalable and integrated solutions that support diverse banking operations in a cost-effective manner. A Service Oriented Data Center can, for example, enable consolidation, virtualization and business continuity so that banks derive optimal performance and lower their power consumption.

Way forward:
With more than a half of its population under the age of 25 years, India is witnessing the rise of the connected Generation 'Y'. These customers (Millennials) expect banks to use tools like video, social media and the internet for customer interactions and are quick to change their loyalties should they find their banks lacking in agility and response times. Banks can utilize appropriate technology to improve customer service and reach out to this group of customers because they represent a key market opportunity by virtue of their earning potential.

Apart from this, renewed emphasis on achieving complete financial inclusion in India will open up new channels for growth considering that almost 600 million Indians don’t have access to proper financial services like banking or insurance. Appropriate deployment of technology is the best way forward to gear up to the challenge of reaching out to the Unbanked in an economical way besides driving growth in the future.