BANKING IN EMERGING ECONOMIES

By  Sandip Sen, Global CEO, Aegis Limited

The banking and financial industry has observed numerous progressive developments across markets but is still under pressure in today’s business climate. Global financial crisis has affected a massive portion of the industry but those in the emerging markets were impacted less. The accelerating shift in economic power from the developed to emerging economies is dramatically changing the banking industry across the world. Financial institutions are also rising and preserving profits along with the shifting regulations and effects on profitability and performance.

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With expanding economies and a fast-growing customer base for financial services, the emerging markets are an attractive prospect for any bank looking to grow its revenues. The financial prospects, maturity and needs of the emerging markets might be diverse in terms of demand, financial inclusion, infrastructure, government regulations and un-monetized economies. Despite their differences, there is a common thread running through all of these markets. These countries are experiencing rapid growth and, as their economies grow, they are seeing dramatically increased demand for innovative banking products, lending and investment techniques, and customer delivery channels.

Technology has played an important role in shaping up the banking industry in the emerging economies. Unlike banks in the developed nations, financial institutions in the emerging markets do not follow an enormous legacy system due to which they integrate and adapt to the modern IT systems with ease. This is helping financial institutions achieve scalability, penetrate across segments and diminish the limitations of their solutions. In a scenario wherein customer retention and banking product lifecycles are shrinking, the end-user experience will be the only product differentiator for customer retention, brand loyalty, and increased customer lifetime value (CLTV). The moot point however is how to go about creating such an infrastructure and experience eco system to win back consumer trust and differentiate themselves from competitors.

Sandip Sen

Technology will therefore be a critical factor in reaching new customers without the cost of establishing extensive branch networks, and improving relationships and cross-selling products with existing customers. However, adapting technology to deliver the right service to specific markets and segments will be a key to their success.

Telecommunications through their reach, ease and ability have taken over these economies and banks are taking advantage of their telecom alliances in the emerging markets like India and China to make their services more wide-ranging. With this extensive and a low cost delivery platform, banks can reach out to a population or the subscribers in the secluded areas. Keeping in mind the fastest trends the banks have launched their mobile applications which help the customers to bank with comfort. A leading public sector bank in India has been able to leverage multi-channel contact center outsourcing and technology advancement to reach out to more customers, quickly and profitably for collections, reminders, cross-selling, up-selling and other frequent interactions. It includes efficiency and effectiveness tools that can enhance agent productivity by three times and reduce NPAs.

Outsourcing and technology enterprises are seeking partnership and alliances to offer an OPEX based business model comprising pay-as-you-use options which is more economical. This has enabled banking and financial institution to avoid capital expenditure associated with setting up the necessary IT infrastructure, cloud computing and ensuring regulatory compliance. For example – an advanced two-way video collaboration platform allows one to share various applications and documents on screen, while consulting with a centralized pool of financial advisors across any location. And a flexible, premium customer service outsourcing allows banks to nurture relationship management to high value clients.

Financial institutions across the emerging markets would continue to face challenges of maintaining customer loyalty while focusing on variablising cost and revenue building. It is therefore essential to build a rapport with a bank and their customers and with their trust. Retaining an existing customer is productive and less expensive than getting a new customer. In order to win back this trust of the customers, the institutions are aiming at placing significant emphasis on customer service as a strategic move and a competitive differentiator.

By  Sandip Sen, Global CEO, Aegis Limited

The banking and financial industry has observed numerous progressive developments across markets but is still under pressure in today’s business climate. Global financial crisis has affected a massive portion of the industry but those in the emerging markets were impacted less. The accelerating shift in economic power from the developed to emerging economies is dramatically changing the banking industry across the world. Financial institutions are also rising and preserving profits along with the shifting regulations and effects on profitability and performance.

Aegis Logo

With expanding economies and a fast-growing customer base for financial services, the emerging markets are an attractive prospect for any bank looking to grow its revenues. The financial prospects, maturity and needs of the emerging markets might be diverse in terms of demand, financial inclusion, infrastructure, government regulations and un-monetized economies. Despite their differences, there is a common thread running through all of these markets. These countries are experiencing rapid growth and, as their economies grow, they are seeing dramatically increased demand for innovative banking products, lending and investment techniques, and customer delivery channels.

Technology has played an important role in shaping up the banking industry in the emerging economies. Unlike banks in the developed nations, financial institutions in the emerging markets do not follow an enormous legacy system due to which they integrate and adapt to the modern IT systems with ease. This is helping financial institutions achieve scalability, penetrate across segments and diminish the limitations of their solutions. In a scenario wherein customer retention and banking product lifecycles are shrinking, the end-user experience will be the only product differentiator for customer retention, brand loyalty, and increased customer lifetime value (CLTV). The moot point however is how to go about creating such an infrastructure and experience eco system to win back consumer trust and differentiate themselves from competitors.

Sandip Sen

Technology will therefore be a critical factor in reaching new customers without the cost of establishing extensive branch networks, and improving relationships and cross-selling products with existing customers. However, adapting technology to deliver the right service to specific markets and segments will be a key to their success.

Telecommunications through their reach, ease and ability have taken over these economies and banks are taking advantage of their telecom alliances in the emerging markets like India and China to make their services more wide-ranging. With this extensive and a low cost delivery platform, banks can reach out to a population or the subscribers in the secluded areas. Keeping in mind the fastest trends the banks have launched their mobile applications which help the customers to bank with comfort. A leading public sector bank in India has been able to leverage multi-channel contact center outsourcing and technology advancement to reach out to more customers, quickly and profitably for collections, reminders, cross-selling, up-selling and other frequent interactions. It includes efficiency and effectiveness tools that can enhance agent productivity by three times and reduce NPAs.

Outsourcing and technology enterprises are seeking partnership and alliances to offer an OPEX based business model comprising pay-as-you-use options which is more economical. This has enabled banking and financial institution to avoid capital expenditure associated with setting up the necessary IT infrastructure, cloud computing and ensuring regulatory compliance. For example – an advanced two-way video collaboration platform allows one to share various applications and documents on screen, while consulting with a centralized pool of financial advisors across any location. And a flexible, premium customer service outsourcing allows banks to nurture relationship management to high value clients.

Financial institutions across the emerging markets would continue to face challenges of maintaining customer loyalty while focusing on variablising cost and revenue building. It is therefore essential to build a rapport with a bank and their customers and with their trust. Retaining an existing customer is productive and less expensive than getting a new customer. In order to win back this trust of the customers, the institutions are aiming at placing significant emphasis on customer service as a strategic move and a competitive differentiator.