Smitha M
Flash-Back: Ten years back when one thought about a bank, it was a
strong structure with strong rooms and slow processes. To perform a simple
operation such as withdrawing money you had to go through minimum of two-three
bank employees and be ready for a wait of one-two hours. Leave alone the time
inconveniences, if you required money, you had to go to the bank where you had
the account.
Not only this, you had to plan for your expenses well in advance. There was
no way to withdraw money outside banking hours in case of an emergency
requirement.
Zoom back to today: Technology and competitive environment has come
together to bring unimagined of services to the customer. Any Time Money, credit
cards, Internet banking, phone banking you name it and it is there.
However, with the modern and tech savvy banks today, you don’t have to
maintain passbooks to keep a record of your bank balance. To find your balance,
you don’t have to even go to a bank branch. Just walk into the nearest ATM or
call the bank or log-on to the net to know your account details.
Challenges of Multi-Pronged Distribution Network
With the increased customer expectations, banks have evolved multitude of
delivery channels to match the same. A customer has the choice of using any or
all these channels. Contrarily, the banks are now faced with a problem of
tracking customer data spread across various points in different databases.
(The figure shows the growth in the number of distribution channels over a
period of time.)
With technology, information has become a key factor. Banks are coming out
with more and more customized products in their portfolios. Now, a bank customer
is himself a target audience for new products introduced by the bank. In fact a
bank tries to lock a customer by providing him with multiple services from its
portfolio. This ensures that all the financial needs of the customers are taken
care by a single bank itself.
But to come up with a perfect solution to match customer requirements, the
bank needs to make a through study of the preferences and financial habits of
the customer.
In the past, obtaining customer information was easy, as all the information
pertaining to the customer was present in a single location (which was often the
account folder of the customer in the bank where he had the account). Today
various customer touch points provide different amount of diverse data about the
same customer.
Therefore, the challenges before the banks are to collate these data and
derive meaningful information out of it. This has meant a search for a solution
that would integrate multiple delivery channels.
Integration, a one-stop solution
Integration of multiple channels has also become of paramount importance due
to a need to codify and make uniform all customer interactions with the bank. As
it is essential to respond to customers in real-time, it is critical to have
details of past customer transaction at all touch-points.
Integration of all customer detail provides the bank with ability to get
in-depth customer profile. This enables the bank to introduce new products to
its portfolio range targeted at specific customer class. This leads to better
customer value.
An example of this kind of customization is DIVA. DIVA is a Standard
Chartered Bank product targeted at the fast growing working Indian woman
population. The bank used customer analysis to study the spending patterns of
this class of customers and came up with special features for their DIVA credit
cards such as discounts and 0% interest on cosmetic, consumer durable, travel
etc. brands.
Technology solutions that can enable such data collation and analysis include
data mining and business intelligence solution.
An effective channel integration requires robust networking. Information from
all customer touch-points needs to be present at one central location.
Integration of data from multiple customer touch-points enables banks to
provide dynamic end-to-end solution. This helps banks to retain and focus on
profitable customer base, effectively utilize cross selling opportunities and
maximize return on investments (ROI).
Business Assessment:
- Need for integration of data from various customer touch-points in the
banking sector - Requirement for a robust and well connected network
- Requirement for data mining and Business Intelligence solution