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Taking your bank into the next generation

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Anis

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

AnisFor 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

Citigroup considering divestiture of some foreign consumer units – Bloomberg Law

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Citigroup considering divestiture of some foreign consumer units - Bloomberg Law 1

(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)

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European shares end higher on strong earnings, positive data

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European shares end higher on strong earnings, positive data 2

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)

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Banking

ECB plans closer scrutiny of bank boards

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ECB plans closer scrutiny of bank boards 3

FRANKFURT (Reuters) – The European Central Bank plans to increase scrutiny of bank board directors and will take look more closely at diversity within management bodies, ECB supervisor Edouard Fernandez-Bollo said on Friday.

The ECB already examines the suitability of board candidates in a so-called fit and proper assessment, but rules across the 19 euro zone members vary, so the quality of these checks can be inconsistent.

The ECB plans to ask banks to undertake a suitability assessment before making appointments, and they will put greater emphasis on the candidates’ previous positions and the bank’s specific needs, Fernandez-Bollo said in a speech.

The supervisor also plans more detailed rules on how it will reassess board members once new information emerges, particularly in case of breaches related to anti-money laundering and financing of terrorism, Fernandez-Bollo added.

Fernandez-Bollo did not talk about enforcing diversity quotas, but he argued that diversity, including diversity in gender, backgrounds and experiences, improves efficiency and was thus crucial.

“Supervisors will consider furthermore all of the diversity-related aspects that are most relevant to enhancing the individual and collective leadership of boards,” he said.

“Diversity within a management body is therefore crucial … there is a lot of room for improvement in this area in European banks,” he said.

(Reporting by Balazs Koranyi, editing by Larry King)

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