Banking On Demand: So Much for Bankers’ HoursBanking has come a long way from the famously inconvenient “bankers’ hours” of years past; i.e. 10 a.m. to 3 p.m. weekdays. Increasingly, consumers are doing their banking whenever and wherever they want.
It started with phone banking, ATMs and now, as we know it’s via phones, tablets and PCs through SMS, websites, and mobile apps. Citibank reported in October last year that 95 percent of all transactions for Citi in Asia now occur outside a branch. The branch network as we know it is changing dramatically and all banks are seeing this trend.
Due to competitive pressure and the increasing demand of the customer, most banks have not had the chance to step back and reconsider their architecture before rushing to add these new channels. This has lead to silo channels and an inconsistent view of the customer across products and lines of business.
Customers are demanding increased access, simplicity and transparency. They want to use whichever channel happens to be the most convenient at the moment, and a seamless experience between them all—whether it’s access to products, information, or transactions.
More and more, customers prefer using digital channels over making the trip to a bank branch and waiting in line to talk to someone face-to-face. It’s not hard to understand why. I myself have probably been into a bank branch less than a handful of times over the last two years, and even that was painful.
Also, digital channels help people compare products and services among banks quickly and easily—as is the case across all industries. As consumer trust and faith in banks has declined, loyalty to one’s banker just isn’t what it used to be.
Forrester Research’s report Customer Advocacy 2012 revealed last year that financial institutions scored at the bottom of the ranking. The Ernst & Young Global Consumer Banking Survey 2012 stated there was a 40 percent decrease in customer confidence in the banking industry globally, with Italy and Spain decreasing 72 and 76 percent respectively (not surprisingly!).
For banks, having a clear multi-channel story is the key component of the future financial services industry and customer-centricity. Digital channels have enabled consumers to interact and communicate with banks on their terms, when they want, through the channel they choose.
The power of the relationship has shifted from bank to consumer. They offer a different proposition for customers, and one that will revolutionise operating models. Banks must move from a focus on products to a focus on customers in order to minimise churn, reduce costs, and increase up-sell in assisted and unassisted channels.
And while we’re talking about costs, its important to note that the migration of customers to lower-cost channels will drive a more efficient business. A multi-channel approach reduces the cost-to-income ratio for each customer. It also allows banks to leverage economies of scale by sharing technologies and their costs across countries. This is true for both emerging markets and developed markets.
From a technology standpoint, many legacy platforms are at the end of their useful lives, having grown complex, inflexible, and unwieldy. As these old systems collect more and more customer data, the lack of multi-channel banking architecture has left all that valuable information stored in silo-ed channels, unavailable for analytics. Not to mention regulators in many countries are demanding higher availability and transparency for consumers—and urging banks to get involved in burgeoning mobile payment platforms.
Largely, it’s technology advancements—and consumer adoption and use of that technology—that’s forcing a change in the banking industry. Evolve or get left behind. It’s time for true multi-channel platforms.
This post originally appeared on Matthew Talbot’s Mobility Blog.
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