1. What role do you see digital initiatives play as the banking industry is increasingly shifting from commodity banking to that of personalized, customer services? How are such e-initiatives changing the playing field?
All the technology led changes in banking-the mobile-led innovations, analytics related initiatives in terms of channels and the user interface are converging. And the possibilities are immense because banks can now hyper personalise their interaction with the customer.
In the past if the bank wanted to offer a loan to the customer, it would use a traditional channel. The customer would walk into a physical branch or an RM would reach out to him.
Today, banks have the ability to personalize the offering to a large extent. They can make an offering the way a customer wants to see it, on the device that he wants to see it and at a time that’s most convenient to him. And that’s possible only because mobile, analytics and digital interface platforms are converging. This allows banks to improve the overall communication with the customer to such an extent that they are able to offer a very high degree of customization. So digital is not just restricted to the front-end interface.
The whole concept of hyper personalization is only going to get delivered through digital. For example, for a given customer we have a certain set of customer information from his transaction behaviour – we know his age group, income, profile etc. Using analytics we can come up with relevant offerings in the form of a pre-approved loan. We also have customer information through his social media profile. We are able to find out that the customer is planning to go on a vacation. So if a customer is keen on an international vacation and he is asking for travel suggestions on social media and visiting travel sites, we know that we can reach out to him with a pre approved loan offer.
We can also find out which is the channel he is accessing the most. If we observe that he has not visited the branch in a long time. Then his chances of transacting through branch banking are remote. If he is fairly active on internet banking we can send him the pre approved internet banking offer as a display banner and also prompt him to complete the transactions. So within 10 seconds of applying for the loan, the customer has the amount in his account.
This allows us to improve the overall communication with the customer to such an extent that we are able to offer a very high degree of personalization. So we are definitely moving away from commoditization.
The concept of hyper personalization is going to get delivered only through digital. And it’s only going to make things better.
The business of banking is not going to change dramatically. The only change is that banks will understand their customers better. Banks that have a relationship approach, are able to communicate effectively, make relevant recommendations and also help in consuming those recommendations without intruding on customer privacy will stand to gain out of it.