Intelligent 'Multi Channel' Banking Business Model
Banking at its core remains the same i.e. intermediation between clients having money and clients which require money, however due to technology advancements, the creation, management and consumption of banking products and its associated services have undergone a huge change.
Gone are the days where products were at the core of the bank offerings to its customers, the new core focus of all retail banks are the customers and products/services along with the interaction and operations are attuned to fulfill the customer’s needs.
Since the customers are now open to using multiple channels for interactions, it is but natural that the banks have to have a multi-channel strategy and business model to address the same.
Well although the real secret lies in the implementation and the following ingredients are a must to reach that. Also most of the efforts needs to be put in are in the back-end and must be thought as preparatory stage of Intelligent Channel Management Strategy. The ingredients are in no specific order:
a) Advanced Multi Channel Integration focusing on Digital Channels
Customers want you to understand their needs and suggest appropriate products and services. Hence they are looking for trusted advice as well but at their convenience. For example they can start their interaction on Web-site and take to mobile app to social network and then to call center and finally closing it at branches. They do not want to repeat themselves at all the above channels and want the banks to keep track of the same. Thus Multi channel integration is a given fact, it is more important on the digital platform where there is no Bank employee to handle the customer experience. This is back-end work.
b) Real Time interactions management to achieve higher conversion rates:
Customers want to close the transaction “here and now” and this suits the bank as well, however for this to successfully work, the customer facing channels and integration with the backend analytics and products engine needs to be done in seamless fashion. This again is more back end work as you have to be ready for the customer.
c) Entire process revamp so that more services and products can be offered on the digital platform with minimum interactions:
Most of the processes are not designed from digital point of view. It is therefore very important that a BPM (Business Process Management) exercise is done to implement a process which is in line with digital and channel strategy of the bank.
d) Dynamic Pricing Schemes:
Pricing as we know plays an important part in the decision making process and is often the key element in closure. It is there fore imperative that the pricing engine must be primed in the backend and depending upon different parameters related to the customers, pricing is shown and transaction closed.
e) Micro Segmentation:
Due to advancement in technology it is now possible to have very micro segmentation. Micro segmentation comes very close to personalization and because of near personalization closure of business is possible. Again this is work to be done in the back ground.
f) Advanced Analytics:
Analytics engine would be key driver in this time and age. Hence lot of thought and care has to be taken to be able to mine data in meaning full way with help of data scientist.
g) Predictive modeling:
It is now no longer a great thing if you have started understanding your customer. You have now to start to anticipate his needs/wants, interaction reasons and direct him/ her there. This can only be done if you have done some predictive modeling on the micro segments that you have created with Advanced Analytics.
h) Self-Learning Model:
The various model that you have implemented must have a self-learning mechanism i.e. auto correct it self a.k.a. artificial intelligence. Although the technology is in its nascent stage on this point, banks have to start anticipating to work on the same.
Finally all the above points should lead to personalization. Every individual wants to have a personalized service, offer, advice. All the above should be focused on getting close to the personalization, because that is what makes the final tipping point in favor of the bank.
When to make the magic work?
Well the magic needs to work at the “moment of truth scenario” i.e. at the first interaction of the customer through any channel, where guidance, detailing, predicting, self-learning on the way and then leading to conversions. The bank which is able to do the above successfully then avoids commoditization of its products and services, restores the trust of the customers and is in a position to successfully defend it self against any new competitors. Others Beware.