Crowd Sourcing in Financial Institutions

Posted in Finance Articles, Total Reads: 1650 , Published on 02 November 2014
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Crowd sourcing is the process of outsourcing the task to a distributed group of people. The succeeding terms like “Crowd funding” is often popular. However the use of Crowd Sourcing in Finance is still approached with much caution. Let us look at a few of Crowd Sourcing innovation techniques used by leading banks.


Financial Companies rethink their Brand and Financial Products. The Market Insight received from Crowd Sourcing Tactics in Social Media like online polling, discussion groups and Reviews of particular product or services, covers an ample amount of Marketing Intelligence. The popularity of Crowd Sourcing has been recognised by many financial institutions. Measures have been taken to create Managed Communities and Topic Specific Groups of likeminded consumers. New Ideas and Schemes are generated by the Consumers’ submitted Ideas.

Image Courtesy: freedigitalphotos.net


Crowd sourcing is also gaining grounds in Banking Sector. With the new age Innovation centred on Consumers Satisfaction, bank like RBS are involving in Customers’ inclusivity from the very Outset. RBS involved in getting Ideas from consumers, they started a campaign called RBS Ideas Banks. RBS Ideas Bank was an open portal where users could submit Innovative Ideas. In the same portal there were tabs named “Hot Ideas” “Top Ideas” and “New Ideas”. Thus RBS did their best to include customers’ convenience and hassle less Ideas.


HSBC not to be left behind has also launched a Crowd Sourcing Platform for expatriates called “HSBC Expat Hints & Tips”. This is to keep to their Global Image and keep expatriates abreast to the policies of the Nation. J P Morgan Chase has also involved in Crowd Funding in many of its nascent projects. ICBC uses social media to solicit public input about rate setting proposals.


Brussels hosted the crowdsourcing summit on 5 and 6 June 2014.BNP Paribas Fortis one of the leading Banks ,demonstrates the interest and power of ""crowd"" tools in order to innovate, solve organisational problems and finance new projects. They partner lot of innovative meets driven by Crowd Sourcing.


“Drive DB” is an Innovative Social Media tool designed by Deutsche Bank that allows customers to influence and contribute to Banking Solutions. The DB Bank involves the following

• Increase Client Engagement

• Initiatives to optimize and streamline the Client On boarding/Documentation

• E-Banking tools

 

It’s thus a much needed introspection on the part of the Banks to involve in crowd sourcing .The benefits of Crowd sourcing can be:

A very convenient means of Market Research

Meeting the Organisation Challenges by gaining customer Insights.

Gap Analysis of the customers and customizing products.

Allowing Stake holders to be a part of Product Development thus mitigating Risks

Ensuring Customer Loyalty and Involvement in Constructive discussion process

 

Future of Crowd Sourcing:

Crowd sourcing is extensively in use in all organisations, there are words which are used in Coherence with the Crowd Sourcing induced system, For example:

• Kickstarter = Funding

• Wikipedia = Open Knowledge

• TaskRabbit = Paid Micro-Tasks

• SeeClickFix = Issue Reporting

• Crowdmap = Collective Geographical Mapping

 

So at a minuscule level how do we expect this financial entities to use Crowd Source.

 

Consider and Identify a Customer Based Issue à Open the Issue before like minded Consumers Ask for feasible solution and narrow upon the most liked or voted solutionàInvolve in implementation of the solution through Crowd FundingàTrack the Customers’ response to the solutions and innovate accordingly

 

Cons of Crowd Sourcing:

Though crowd sourcing can enable an organization to identify the best ideas, it requires an uphill effort to manage the details and build up credibility.

• A large number of ideas become difficult to manage. More time is spent in selecting the best idea than working on the final idea.

• Further, more caution is to be paid for financial solutions obtained via crowd sourcing as the tasks completed may not be by professionals.

Therefore any task which is considered above simple and straight forward is risky for crowd sourcing in finances.

 

Global Slowdown

Turn of the century has seen a number of innovations in various industries and at the same time the economic slowdown has plagued almost all the countries of the free world. Considering this frequent ups and downs in global economic growth, crowd sourcing in finances can be considered a possibility to generate solutions which are cheap and obtain ideas which are diverse.

Market research complimented by crowd sourcing can give rise to potential solutions and insights which might be overlooked by people responsible for policy making and decision taking. As the policy making is normally on a macroeconomic view, crowd sourcing allows understanding the issues at a more niche level in some cases.

 

You never know next time you earnestly give your preference in your bank’s Social Network site, you mind have contributed in creating a product in itself. A product customised to you. Two way communications is a reality in this new age of crowd sourcing. We as customers should not be left behind.


This article has been authored by Saptarshi Sashi from IMT Ghaziabad

 


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