WHAT HOLDS THE KEY FOR BANKS PROSPERTIY? - INNOVATIONS IN BANKING
WHAT HOLDS THE KEY FOR BANKS PROSPERTIY? - INNOVATIONS IN BANKING
What holds the key for banks prospertiy? - Innovations in banking
Dr.R.Maria Inigo & Ms.G.Kalaichelvi
Innovation calls for vision and conviction. Innovation helps us make the product/provide services highly suited for the targeted application. Successful innovation is not about the ideas or inventions; it's about the people. Innovation can be defined as the key process by which products, processes and services are created, and by which businesses generate jobs and wealth.Innovation isn't all about great ideas. Innovation is a chain that requires strength at every link to succeed. The chain starts with idea generation, but then moves to prioritizing and funding ideas, to converting those ideas to products/services and finally to diffusing those products/services and business practices across the institution/bank.
Innovation calls for certain discernment on the part of the service delivery system of banks to design the services in such a way that the customer is much delighted as to how the business process is effectively carried out and how easily with least time and distress is delivered to them.
In a situation of global economic crisis, institutions will need to shake hands with a new generation of price optimization system, customer relationship management platforms and Web-enabled tools that expand relationships and grow wallet share. Customers who have adapted to the mass customization of the Internet's long tail - and who are used to getting personal recommendations from e-retailers can't understand why an institution that has so much information about them can't offer tailored products and services. Banks that change that perception by using automated tools to fine-tune products will be well-positioned. Today banks dive deeper than ever before to connect with consumers. To this the government at the Centre (Indian central government) through the RBI fine tunes the banking system by reducing the CRR and lowering repo and reverse repo rates.
Looking for new frontiers in revenue growth, banks are discovering interesting opportunities in the way they satisfy their customers. What are the key factors that appeal to bank customers and entice them to do more business? As in most service industries, overall responsiveness and behavioral attributes account for a 10-percent margin in customer satisfaction.
When it comes to speed of service and the attitude of the people who deliver that service, banks should improve their personal touch. Furthermore, advanced technologies provide bank managers and staff valuable help because convoluted legacy systems hinder the prompt delivery of banking services and the integration of customer information. Notwithstanding a positive service attitude, ailing technology systems could severely constrain the ability of bank personnel to satisfy customer demands. Technology also plays a role with other drivers of customer satisfaction, such as quality of service and product innovation. In order to be effective in luring customers, banks should invest in fundamental improvements in their people, process, and technology capabilities.
Service delivery
Most business houses believe that they do deliver superior things to their clients. But at most times they do not satisfy at least half of their expectations. Which means that business fail to understand their customers and there is no innovation in business. When customers appreciate the way a business is carried then there should be necessarily innovation taking place. Following are some aspects which will make a bank to be more innovative in its service delivery.
Alerts to keep customer on budget: Informing customer when they near their minimum balance requirement and intimating every time drawls are made through sms alert or email service.
Easy Deposit: Scanning cheques from home and the same may be directly deposited into the account of the customer, provided the cheque has the MICR code and other security features. Informing the issuer of the cheque for counter- checking the amount details through email or sms alert can be another innovation for safety of banking transactions.
Account-to-account transfers. Make a transfer to or from an account at another bank or credit union or consortium arrangement already banks are doing under the core banking system. But the cost of service has to be made very less.
Free bill pay. Paying bills automatically through registration with the banker. Many banks are doing such innovative services. When the system turns more competitive, easy and cheaper, many customers will opt for electronic payment.
Live chat support. An interactive voice support system or a 24 hours online chatting system with the banks representative have to arranged after ensuring with the system a fraud-free chatting.
View every transaction. Customers have to given the choice to see a list of each deposit and withdrawal, along with images of cheques/drafts that have been cashed and provide a running statement online - including credit card and debit card accounts.
Enhanced online security. Innovation means also ensuring more security features. Banks should customize a security phrase and image at login for even greater protection. This will ensure accidental visitor online from entering into one's account details.
Creditor/debtor online clearing: Though some organizations have resorted to the practice of direct credit of customer accounts instead of issue of cheque/DDs, but many organizations has not taken this route as there are some practical problems like, accountability for tax and online checking of credits and debits.
Charges/fee notification: There is a general criticism of customers, especially of individual customers that, banks charges for deposit in other branches (from non-base branches), cheque collection, annual card' charges, charges for issue of statements and the like are charged without notifying the quantum of charges to the customer. It becomes known only when a customer updates his passbook or get a statement from the bank. Annoying the customer by these of charges could be avoided and at the same time the banks could continue charging them, by giving an sms alert or email that such and such charges are levied and such rate.
New technologies for customers: The use of technology like Smart card, mobile ATMs, coverage of post-offices under electronic payments network in far flung areas, etc. in providing financial services to the people holds a tremendous potential for the business growth.
Having human touch: Although today's banking system has become mostly online and a customer need not visit the branch at all for further transactions, yet most customer walk-back to their branches to have a human touch and see their account operations done manually atleast once in a month and once in two months. This requires a sort of human touch by the bank employees with the customer- innovations could be introduced in receiving and dealing with a customer and minimize his number of visits to the branch.
Virtual banking
Various technological and payment systems developmental initiatives are undertaken in the Indian banking and financial sector. The system has moved to a virtual' banking system gradually in view of IT penetration in every sphere of banking.
The Core Banking concept to a great extent emerged from the IT infrastructure and this enabled the centralization process and has since received a complete and focused attention from all the banks for its rapid implementation. The banks have also undergone a massive change in terms of improvement in the IT Communication network which has greatly facilitated not only the networking of the internal communication processes but the integration with the external payment systems gateways as well.
The offering of electronic banking service channels like Internet Banking, Mobile Banking, real time fund transfer, ATM Applications and other forms of upcoming electronic banking channels have become important vehicles of offering banking services in a cost-efficient manner with wide geographical spread; enhancing the banks' reputation and brand building addressing the competitive forces as well.
Operational comfort and convenience of operations in a highly challenging environment for banks. The most important requirement relates to looking at the convenience of customers either online or offline.
Operative efficiency
It's important to recognize that customers' needs, priorities, and choices are different now than the past. Any organization that relies on an outdated set of beliefs about customer is more likely to accelerate their irrelevance than ensure their success. Reorienting the organizations toward operational efficiency needs the following corrective steps.
Observe changes in the environment in real time while aggressively avoiding the strong tendency to just see what you expect or hope to see
Orient yourself quickly to what those changes mean being careful to challenge and revise outdated assumptions and beliefs
Decide on a course of action chosen from range of creative alternatives most relevant to the changing environment
Act in a coordinated and unconstrained manner while being ready to observe, orient, decide and act to ensure progress and enable course corrections as necessary.
Future challenges and prospects on service delivery and innovations
The future opportunity lies in the form of integration of the Indian banking and financial system with the Government's e-Governance initiatives. The electronic benefits in this regard would be passed on to the beneficiaries directly thereby preventing the leakage of the funds provided under various Government's schemes like e-payments, etc. for the upliftment of the people. The collective efforts of the Government, banks, financial institutions and the IT firms to provide innovative solutions for an inclusive growth of the Indian economy will certainly go a long way not only for the sustained growth of the financial system but the Indian economy as a whole.
Customers are continuing to opt for and engage in experiences that are designed to meet their needs. It's just that their needs and priorities are changing significantly. Banks that understand and quickly adapt to these changes can not only preserve but enhance revenue in the short term.When a customer enters a bank branch, checks into a hotel, enrolls with a health insurance provider, etc they have a set of constructs they've learned from past experiences and that operate within a perceptual framework that enables gist processing. Experiences designed based on this perceptual framework and set of experiential constructs become inherently easy to navigate.
Many organizations have placed an increasing amount of attention on the quality of the experience their customers have. However, the first mistake most organizations make is focusing on what the company does to deliver a customer experience rather than taking a step-back and thinking first about how customers actually have experiences. The second biggest mistake is the way most banks listen to and react to customers' suggestions about what to do to improve the experience.
Emotional touch on customers, change how they feel. This can be brought through delivery of innovative solutions to people's underlying, end-to-end problems. Finding these solutions requires getting below-the-surface of existing touch points.