Innovation Roadmap for Banks- Making them Future Ready
Posted in Operations & IT Articles, Total Reads: 685
, Published on 29 November 2015
During the last decade, digital technology has rapidly evolved–big data, cloud computing, smartphones and high bandwidth are all now commonplace. Analogies with other industries such as entertainment and print media, suggest that digital will drive huge shifts in industry value–compressing revenues, enabling new attackers, redefining service and crippling the laggards.
I did a comprehensive research of all the breakthrough innovations in banks and non-banks globally and in India and based upon the findings I recommend three major breakthrough innovations which Banks can implement in the coming years to gain a quantum leap against its competitors.
With 125 million Facebook users in India, 80% being above 18years and basically no financial services on this platform, Facebook offers a huge potential for tapping into a potential customer base. Banks in order to position itself as an innovative bank and build an engaged community should launch a Facebook application “Virtual Branch”, full-fledged channel allowing customers to bank as if in a branch, but from the convenience of their home with extended opening hours. The application will enable a live, secure and real-time conversation between the Facebook user and a choice of Banks specialists.
The new application will focus only on conversation, listening and feedback and not viral marketing and broadcasting of promotions and advertisements. This will be supported by the fact that Banks specialists on Facebook will not have any sales targets. Through this app customers can discuss specific accounts, chat on banking
products, open accounts, apply for insurance and organize transactions. The app will be aligned to work through the Banks servers, firewalls and security protocols. Data generated by the virtual branch application will be not stored by Facebook or any third party and only Bank will have access to the information. A back end monitoring and reporting system will ensure the quality and compliance with internal and regulatory guidelines.
An interesting feature in the virtual bank will be the avatar greeting customers landing on the main page. This avatar can be customized to draw attention to new promotions, events or services. Another feature making the application more personal will be that customers can select a Bank specialist of their choice from a list of photos.
Launching your own social media platform
Apart from presence in social media platforms, Bank can launch its own platform to target the Gen-Y market. The portal will be built on the habits of Gen-Y and serves as an innovative knowledge-based platform to enable learning, sharing and interacting with peers and financial experts through the use of social media and content geared towards Gen-Y interests.
The platform will offers blogs by celebrities and financial gurus, a talk show, question and answer, and financial news and games to engage the target segment. The idea is to get influencers, such as celebrities, bloggers and financial gurus to share their views and experiences on financial management to raise awareness among the target segment. The platform will be made very interactive to enhance members interaction with influencers and incentivizing them to create user generated content through interactive activities, such as y backpacker, y manifesto, y debate and offering prizes for sharing travel budget plans or concert tickets.
The platform is intended to promote free and open discussion, but at the same time bank will monitor the content 24/7 for abusive content, which can be removed if necessary.
Omni-channel banking will be a combination of branch banking and digital banking. There are countless interesting scenarios that can merge the customer experience of both of these channels to a seamless, integrated one.
For example, a customer sees a new ad of particular car one night and then he browses Bank web site or app for Car loan. Later that week when he enters the branch to take out some money from the ATM (now deliberately moved inside) a smart Bank employee approaches him holding a tablet and asks if he is Mr Gupta, and would he be interested in reviewing the Bank’s range of car loans. Bank will know this either through the system installed in ATM, or through Mr. Gupta’s phone which has location based services enabled for bank, or possibly the door face scanner will recognise him! Before launching this service Bank will have to make efforts to characterize its customers and do a profiling to try to predict which customers would like this type of merged experience, and which ones would not.
To conclude, in the digital world, traditional distinctions of social class, wealth and age are blurred. The valuable consumer for the bank may not be the salaried consumer with a predictable profile that lends itself to cross-selling products defined across a life cycle any more, but the aspiring ‘rurban’ youth, young entrepreneurs or netizens who are easy to profile and trust. Banks will continue to push the boundaries of innovation with lending products, once trust is established based on transaction patterns over time. All the above mentioned recommendations if implemented will translate into enhanced capacity for the banking system to engage the hitherto excluded populations.
This article has been authored by Sumit Kumar from IIM Ranchi
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