Banking
How can banks rise to the omnichannel challenge?

By Frans Labuschagne, UK & Ireland Country Manager, Entersekt
Banks should follow in the footsteps of other innovative consumer-focused industries to deliver an omnichannel banking experience that is relationship-focused, interactive, relevant and personal.

Frans Labuschagne
Never has technology accelerated changes in consumer behaviour so quickly that whatever is cutting-edge today becomes tomorrow’s status quo. And, consumers’ expectations of digital services and platforms change even more rapidly.
For example, consumers are no longer completely satisfied with having content available digitally and on demand; they want personalised suggestions specifically tailored for them. And why shouldn’t they? They expect the same from their social media platforms, where personalised ads are as familiar now as they were once disconcerting.
In fact, today’s mobile-first society enables personalisation on a scale never seen before, which has transformed consumer habits – from how they spend their free time to how they plan vacations, where and when they shop, and even how they manage their homes.
New age banking
Banking customers are no different when it comes to managing their money. They expect to access their information, and perform an ever-expanding list of banking actions anywhere, anytime and on any device. They expect their bank to meet their individual needs and preferences in the same way that their media streaming service or favourite big tech company does. With these expectations, they’re challenging what banks do, why they do it and how it’s done.
Large-scale changes in the banking landscape mean that consumers are spoilt for choice, and recent studies indicate that many would even consider going over to the competition – including to non-traditional players – if their current providers fell behind in service delivery and no longer met their expectations.
Meeting customers’ expectations no longer hinges on a multichannel strategy per se. Although multichannel banking has been around for years, it is no longer ground-breaking and certainly does not provide a competitive advantage. What can give banks the edge, however, is taking stock of their various channels and strategically considering how their customers use them, and what this reveals about their preferences.
Taking lessons from retail
Traditionally, banks spend much of their time and effort ensuring accurate transaction processing, but they’re starting to recognise that there are valuable lessons to be learnt from industries, like retail, that place a strong emphasis on customer experience. Some of the world’s top-rated banks understood this years ago when they were still considered challenger banks. They succeeded in turning customer experience into a competitive advantage that resulted in increased market share and remarkable customer satisfaction rates.
For the retailers known for their customer-first perspective, it is their store of data that gives them the edge over their competitors. They know that every time a customer searches online from their computer or mobile device, or calls the customer service department, that customer leaves a digital trail. This data-rich trail leads to a more intimate understanding of that customer and therefore what it takes to provide them with more relevant services and offerings – the essence of contextual commerce.
Smart organisations recognise the possibilities that using data in this way opens up. Instead of having a handful of interactions with their consumers each month, they can establish meaningful, ongoing and highly personalised interactions every day.
Mobile-centric
Ensuring that these exchanges are truly valuable to customers is not always easy, especially when a bank must simultaneously balance factors like cost, legacy systems and competition. For many banks, a digital-first, or even a digital-only strategy, seemed like the answer. After all, digital channels have great potential in terms of cost savings and keeping up with the competition. However, research indicates that satisfaction levels among digital-only banking customers is significantly lower than among digital-centric customers, i.e., those that occasionally also use branches. So, while leveraging digital channels is a must for any bank, losing sight of the importance of branches, and the opportunity they provide to personally interact with customers, can be detrimental.
So, how can banks provide the level of service consumers demand, through the channels they prefer, while managing to offer a consistent experience across them all? Leveraging the mobile device, a universal tool that consumers always have with them, could provide the answer.
If the mobile device could be leveraged to securely identify a customer to their bank, it could become the ideal way to build confidence in sophisticated technologies. And even though the mobile device is a digital tool, it could also enhance the customer’s in-branch experience. For example, customers could use it to check in at a specific branch, authenticate interactions and digitally sign documents. A phone also delivers contextual information about a consumer, such as their location, which can initiate highly relevant and interactive dialogues at key moments. In this way, the mobile device can become the portal to the other channels – a trusted and familiar key to an omnichannel banking relationship.
True omnichannel means more than just many ways
Today, banks are starting to realise that a true omnichannel approach to banking means more than just providing multiple ways for customers to transact. It’s about a thoughtfully designed, seamless and consistent interaction between customers and their financial institutions across multiple channels, with each channel complementing the others.
In the financial services industry, we’re still in the early stages of digital transformation. As Millennials and Gen Z consumers start to make up larger portions of the workforce, there will be countless changes in the ways they will want to interact with service providers like banks. To meet all these changing demands, banks will need to think about their omnichannel capabilities, as well as the insights they can gain from their multiple consumer touchpoints, as a competitive advantage. In doing so, they can offer their customers the personalised experiences they have come to expect – no matter the channel
Banking
Commerzbank to lose 1.7 million clients by 2024 – Welt am Sonntag

FRANKFURT (Reuters) – Commerzbank expects to lose 1.7 million customers by 2024 as part of its current restructuring, resulting in a 300 million euro ($364 million) hit to revenue, weekly Welt am Sonntag reported, citing sources close to the bank.
The lender hopes to offset the drop by growing its loan business as well as by expanding its business with corporate and very wealthy clients, the report said, without giving any further detail of why customer numbers were expected to decline.
It also didn’t say if any specific category of client was most likely to be lost.
Commerzbank declined to comment.
According to the bank’s website it serves around 11.6 million private and small-business customers in Germany and more than 70,000 corporate and other institutional clients worldwide, so the reported loss of customers would suggest a drop of around 15%.
The bank earlier this month reported a $3.3 billion fourth-quarter loss, sinking further into the red as it continued a major restructuring and dealt with the fallout of the COVID-19 pandemic.
The bank’s restructuring plan involves cutting 10,000 jobs and closing hundreds of branches in the hope it can remain independent.
($1 = 0.8253 euros)
(Reporting by Christoph Steitz and Tom Sims; Editing by David Holmes)
Banking
Citigroup considering divestiture of some foreign consumer units – Bloomberg Law

(Reuters) – Citigroup Inc is considering divesting some international consumer units, Bloomberg Law reported on Friday, citing people familiar with the matter.
The discussions are around divesting units across retail banking in the Asia-Pacific region, the report https://bit.ly/3pD57WP said.
“As our incoming CEO Jane Fraser said in January, we are undertaking a dispassionate and thorough review of our strategy,” a Citigroup spokesperson told Reuters.
“Many different options are being considered and we will take the right amount of time before making any decisions.”
The move, part of Fraser’s attempt to simplify the bank, can see units in South Korea, Thailand, the Philippines and Australia being divested, the Bloomberg report said.
However, no decision has been made, according to the report.
Revenue from Citi’s consumer banking business in Asia declined 15% to $1.55 billion in the fourth quarter of 2020.
The divestitures could be spaced out over time or the bank could end up keeping all of its existing units, the Bloomberg report said.
The firm is also reviewing consumer operations in Mexico, though a sale there is less likely, the report said, citing one of the people.
Last month, New York-based Citigroup beat profit estimates but issued a gloomy forecast for expenses. Finance head Mark Mason said the lender’s expenses could rise in 2021 in the range of 2% to 3%, weighing on its operating margins. (https://reut.rs/2ZwXRB1)
(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)
Banking
European shares end higher on strong earnings, positive data

By Sagarika Jaisinghani and Ambar Warrick
(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.
The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.
The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.
Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.
Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.
But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.
“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.
“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”
Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.
The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.
The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.
London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]
French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)