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Multi-channel Banking is only work half done; the other half is optimization
Channels are aplenty… 5, 10, 20… channels are for everyone! In their undying quest to remain on the top of the transaction value chain, and to optimize customer service and convenience, most progressive banks have already put in place fully integrated, multi-channel, personalized banking system / service that is available to customers in person, at the branches, over the telephone, at the ATM, on the Internet, through mobiles and through interactive digital TV. Today, banks cater not just to the banking needs of customers, but to all of the customers’ financial services requirements, and much more. These channels are testimonials to the fact that financial institutions are realizing that customer–centricity is the key to successful banking.
With the proliferation of so many banking channels, integration has become a must. Now, the question that is doing the rounds in the banking and financial services circles is this — Is multi-channel integration enough? Shouldn’t multi–channel integration and multi–channel optimization go hand in hand for successful banking? The answer is an emphatic ‘yes’.
It is imperative that customers transact all of their financial affairs through their preferred channel or via multiple channels. But the integration of various channels is just the beginning. The key is in optimizing these channels to create a win:win solution without throwing to wind the bank’s substantial existing technology investment. No ‘rip-and-replace’, but an evolutionary route is the way forward.
Each customer segment has its own channel preferences — may be a perfect permutation and combination of these varied channels is what the customer needs. Depending upon their needs and also the relationship with each customer segments, the bank should devise a channel strategy to improve the profitability and ROI. Industry pundits say that banks are left with little choice but to exploit the relationships they have already established with customers as non–banking players, who have entered the once sole domain of the banks, are on their heels. Mutual Funds, Brokerage Funds, and even brands once associated with only telecom or retail services, are now firing on all cylinders to enter the financial services space, where banks once had a free rein.
In order to put an optimized and integrated channel strategy that takes care of both customer centricity and profitability into practice, the primary bottleneck is the ‘silo’ nature of banks’ technology systems. Silos provide only a segregated view of products and customer relationships, rather than a convergent view. Also, maintaining and supporting multiple siloed delivery channels will not be affordable or viable for banks in the future.
Any enhancement in products, services and technology deployments is a nightmare, rather than being simple plug-and-play events. The siloed nature of the product portfolio existing in most banks hinder their ability to provide an integrated approach, thereby reducing the capabilities to cross-sell and serve customers across product lines. Siloes could also hinder the ability to understand the overall relationships with customers, which, in turn, aid in providing the best price points to these customers based on the relationships.
With each delivery channel operating as an island of automation, each with its own information, leveraging information across the myriad channels is not possible. This results in fragmentary customer information, no sharing of information, no tool to create profiles, difficulty in segmenting customers and creating marketing offerings and a range of complex user interfaces. This impacts the speed and quality of the service banks can give to customers negatively.
In order to address the needs of customer segments, banks need to update their technology infrastructure with a solution that can non–intrusively integrate across channels, span across products/services and provide an integrated view of the customer’s usage across channels/products/services. Such a solution can enable right pricing and packaging, depending on the segment profitability, preferences and usage, and also increase customer wallet share by targeting the right segment through the right channels.
