Banking

Taking your bank into the next generation

By Mohamed Anis, AVP & Head of Sales and Client Services, Infosys Financial Services and Insurance (FSI) Europe

Anis For banks, keeping pace with rapidly evolving customer expectations is not easy. Today’s digitally connected customers are demanding and expect their banks to be available 24 hours a day via Twitter, websites and mobile apps. This was reflected in our recent global survey which showed that 60 per cent of respondents want account and transaction information communicated via mobile alerts and 48 percent want valuable updates and insights provided through social media, email and events1. However, in this competitive banking environment, is synchronising mobile comms with online channels enough? The simple answer is no.

While many banks are comfortable with multichannel customer communications, the ‘innovations’ they’re creating – applications, websites, re-engineered call centers – are essentially extensions of what branches have been doing for hundreds of years. To drive long-term success, and attract and keep customers, banks need to embrace next-generation multichannel and this requires a fundamental rethink.

What, then, constitutes a fundamental re-think?
This is easier said than done, and before they begin, banks have to understand exactly what a fundamental re-think is. Firstly, a rethink should revolve around the two dimensions: rebuilding trust and customer centricity. Trust was, is and always will be essential to banks. With 77 per cent of consumers in the UK saying they would consider changing banks if one offered assurances that their data and money would be safer in their systems, trust and security cannot be taken lightly. However, banks need to understand that a customer’s trust is no longer limited to “I trust my bank to safeguard my money”. Instead, it has evolved into “I trust my bank to”:

Give honest and impartial advice
Help me (save or build wealth) to achieve my dreams,
Understand where I am and give me financial solutions that apply to me at that point in time
Help me in times of emergency
Give me a holistic experience and not just push their products on me

In short, multichannel banking needs to move on from “managing money” to enabling banks to “become a part of the customer’s life journey”.

Key steps on the path to rebuilding trust and customer centricity
To make this leap to next-generation multichannel from a customer perspective, banks must first unify all channels into one. This means enabling customers to do everything over a single channel or, if required, move seamlessly between channels to accomplish their objectives. Moreover, all channel-based interactions need to be rich, relevant and timely, thereby establishing in customers a deep belief that the bank is working on their behalf to deliver the best value.

When it comes to technology, banks need to adopt a ‘bottom-up’ view. We have seen banks jump on the “let’s get a great app out” bandwagon without also thinking about how it will impact their core banking systems. Banks must first “strengthen their core” by cashing in on their most critical asset – data. To do this, they need to follow a discover-to-decision lifecycle involving the real-time discovery and aggregation of data from a variety of channels, such as social media, documents and staff, analyses to rapidly gain insights, visualisation of available options and operationalisation of decisions. This lifecycle can help banks take insight-based decision-making not just into the introduction of relevant new apps but also when entering new markets, monetising data and managing data for the long-term.

In addition, banks need to streamline their “middle”, which means transforming the typically large number of complex processes to make them simpler, configurable and more relevant to the customer. Different processes should be carefully grouped to administer a combination of everyday banking, advisory and innovative services, thereby providing the customer with a holistic experience.

Lastly, banks should look at how employees need to be educated to support this rethink. Banks need to drive customer-centric behavior among their employees. They can use tangible initiatives, such as developing a “Net Promoter Score” or NPS, to measure employee progress and enable banks to recognise and celebrate customer champions. It’s only by getting employees onboard to put this rethink into action that it can have a long lasting impact on customers and the brand.

Building processes into the business
Banks should look to unify all of these approaches with the creation of an integrated, end-to-end infrastructure platform that harnesses the latest technologies to enable digital commerce. Besides being configurable, scalable, modular and cloud-based, the platform needs to leverage big data analytics, data management and multichannel capabilities to offer the bank a single, comprehensive view of the customer and provide the insights required to deliver targeted innovations at customers.

Furthermore, for the long term success of next generation multichannel banks should look to invest in and build an executional ecosystem. This involves using its infrastructure platform to create a digital ecosystem consisting of social channels, such as Twitter and Facebook, payments hubs such as Google and Amazon, business partners such as governments, merchants and utilities, as well as content delivery tools. These ecosystems not only allow banks to streamline their interactions with partners and suppliers but also drive collaboration and innovation such as new customer offerings.

Take your multichannel journey forward, without leaving your customers behind
While all customers expect a good service from their bank, they still like to feel like they’re calling the shots. So, while implementing next-generation strategies will build closer and more profitable relationships in the long-run, banks need ensure their customers feel they’re on the same journey as the bank. For example, it is not always a good idea to move all customers from branches banking just because the other channels, such as online, are cheaper. Our survey showed that 87 percent of customers still indicate a preference to share their personal details face-to-face, rather than through digital channels – to force them onto an online channel may only push them to choose another bank. It’s only by taking a new, yet unified approach to their customer communications, IT infrastructure and employee engagement, that banks can truly establish a ‘next generation’ multichannel strategy, and reap the benefits it has to offer.

Banking

UBX appoints new Chief Investment Officer

In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).

Matt Kolling

As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.

Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.

Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.

“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.

Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”

Banking

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak

Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic

A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.

A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.

The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).

The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive

The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.

Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”

The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.

From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.

Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/

Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.

“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”

Banking

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery

· Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs

· Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success

· Allica Bank has launched a programme of free workshops to expand on the findings and support business owners

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were:

Rule 1: SMEs should regularly train staff

Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy.

Rule 2: SMEs need to focus on innovation and technology

Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities.

Rule 3: Small business must have a formal, long-term vision

Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision.

Rule 4: SMEs should broaden their customer reach and find new markets

Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success.

Rule 5: SMEs need to develop reinvestment plans

22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%).

Rule 6: SMEs should engage with local business organisations and networks

Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs).

Chris Weller, Chief Commercial Officer, Allica Bank, said:

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.