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THE SHIFTING SANDS OF CUSTOMER ENGAGEMENT: WHY BANKS NEED TO RE-EVALUATE THEIR APPROACH TO CRM

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Hardware

Over the past few years the retail banking sector has seen unprecedented change. Along with increased regulation, the separation of retail and investment banking and new, challenger banks, the customer themselves have become a challenge. Customers want banks to engage with them on their terms, and through the channels most convenient to them. This has seen a drop in the number of bank branches and a rise in new channels such as online and mobile banking. Banks are now even responding to customer complaints through social media. Moreover, with switching current accounts easier than ever, competition for customers is fierce.

These new expectations mean that many legacy customer relationship management (CRM) systems are just that, a legacy that is no longer fit for purpose. Now banks need to be able to give customers the same level of service through any and every channel. From the first tweet, call, e-mail or handshake, to the opening of a bank account or mortgage application, every touch point a bank has with a potential or existing customer should be seen as an opportunity to learn something. This can then be used to serve that customer better and faster. Banks’ customers expect instant responses and a personalised service. They want all the facts they need to make a decision right then and there and legacy CRM systems are not able to deliver this.

Going Beyond CRM

The future of customer engagement goes beyond traditional CRM. Managing customer calls, communication and sales is just one small component of a broader, more complex customer story in banking. For a digital enterprise, as banks now most definitely are, systems that manage customer interaction have to be more sophisticated. Findings from a recent Loudhouse survey of 800 sales leaders worldwide, including in the banking sector, found that 73% of respondents believe their systems need overhauling now. As customers have become more sophisticated, so must banks’ CRM systems. In fact, they saw this as so critical that 72% believe that a failure to improve it was an impediment to business growth.

Those technology pace-setters in the banking space who have embraced digital transformation have been quick to invest in systems which they can integrate holistically across their daily operations, rather than solutions that are tied to one particular function. Having an overview is essential – 72% of those surveyed said that the inability to get a single view of the customer across all channels was a major frustration of the sales process.  Such implementations have the potential to impact not only sales, but almost all of a bank’s operations, from cashiering to account opening to mortgage processing, as well as staff communication.

One Client, One Bank

The National Bank of Canada (NBC) recently implemented this new holistic approach to CRM. The sixth-largest bank in Canada, it provides a full range of banking services to individuals and institutions, including mortgages and other forms of loans. For the last five years or so, the bank has run a strategic program called “One client, one bank”. With that, NBC resolves to deliver the ultimate unified experience to their customers, redefining its customer value proposition.

Providing the best in customer service is paramount for NBC, but the legacy software in place to support mortgage origination made it a challenge to provide quality service. The six sales channels through which the bank offered homeowner mortgages had the potential to deliver six different loan offers. Siloed applications and manual processes caused delays and errors. This was especially unwelcome when customers needed a smooth, simple experience to help them make potentially the biggest investment of their lives. NBC knew that it had to replace the silos with a single, powerful, integrated CRM solution.

Before beginning the deployment, the bank decided not to customise the new CRM solution to fit its existing processes, but to adapt the way it did business to conform to the application’s best practices. This approach made it easier to standardise and integrate processes bank-wide, simplify them for customers and advisors alike, and introduce automation to speed up processes and improve efficiency.

The bank also extended the CRM system to its mobile sales force, taking advantage of enterprise mobility and remote connectivity. Such a step ensures that NBC can connect with its customers across every channel. Crucially, it enables the bank to meet customers’ needs and expectations consistently – regardless of their point of entry into the bank.

Engaging with the future

As consumer technology evolves, customer expectations of corporate technology and service will only grow. Banks must have a holistic approach to customer engagement; a bank is only as strong as its customer base and they must be kept happy. A technology solution that will help banks better understand and meet the needs of its customers is the only way to stand out from the competition and thrive in this new reality.

Banking

Why ID verification is no longer a barrier to global growth in banking

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Why ID verification is no longer a barrier to global growth in banking 1

By Barley Laing, UK Managing Director at Melissa

Issues related to effective identity (ID) verification have restricted the global growth of both large banks and smaller challenger fintechs. With its plethora of internationally recognised IDs and verifiable private addresses, the western world is far different from much of the rest of the world, where this type of information does not exist. For example, many people in Africa and Asia lack recognised addresses. This anomaly prevents financial institutions from carrying out vital ID checks as they normally would, meaning they risk missing out on possible expansion into new and often burgeoning markets.

Proliferation of mobile

Smartphone usage is increasing in all corners of the world. Africa is no exception as the continent is  set to see another 300 million new mobile internet subscribers in the next few years. This rise offers an opportunity to financial services organisations based in the west who have been concerned about the ID verification process in countries where ID, as they know it, can be hard to obtain.

While there’s no magic bullet approach to ID verification in these countries, it’s essential to use all the sources of information the mobile device provides to inform the identity of prospective and existing customers. For example, mobile telephone numbers offer a form of digital identity as people rarely change them. These numbers can be used for dual stage verification, such as an SMS sent to the registered user’s mobile number with a unique code to complete the login to a secure website or transfer funds.

Technology is driving secure customer onboarding and ID verification via mobile. Today, prospective customers can use a merchant’s app on their smartphone to scan their identity documents – such as a driver’s licence. The scan can extract the prospect’s data from the Machine Readable Zone (MRZ), saving time while securing the correct data electronically for the financial institution. Checks can then be carried out in real time to verify the document.

The IP address of the mobile device can play a vital role in fraud prevention. It’s possible to match the location of the phone’s IP address with that of the registered owner – where they are known to live or work. If this information matches up, it’s likely the registered user is using the phone. However, suppose the device’s registered owner is based in a country different from the information provided by the phone’s current IP address. In that case, there could be fraudulent activity taking place.

But it’s not just mobile; other new technologies play significant roles in the ID process.

  • Biometrics

Biometrics, which are human physical and behavioural characteristics that can be used to digitally identify a person, are becoming a vital part of the ID verification process. Once a customer has passed the ID checks at the onboarding stage, biometrics – which can operate across all devices – may help confirm the customer’s identity with facial comparison technology. However, basic biometric services can be hackable. For example, fraudsters could obtain the photo of a customer that might enable them to gain access to that person’s account. That is why it is crucial for organisations to use a biometric algorithm that checks for eye movement as part of their ID verification process. This ensures they engage with a real live person, not a static image or avatar, to prevent fraud. Just as important is how biometrics quickly and straightforwardly enable customers to access their account or service without responding to time-consuming security questions or remembering various passwords, thereby shaping a positive experience.

  • Real-time access powers real-time decision making

When onboarding a new customer anywhere in the world, be sure to source a global dataset of billions of records. For real-time ID verification, fraud prevention, and data accuracy purposes, it should allow you to perform sufficient cross checks of the contact information provided by the prospective customers – their name, telephone number, email address, or home address. This dataset must leverage government agency, credit agency, and utility records, where possible, and access politically exposed person (PEP) watch lists.

  • Social media tells a story

Don’t forget that social media such as Facebook and Instagram provide a wealth of knowledge on those who use them. Accessing this data within the parameters of best practice data protection for ID verification purposes helps organisations identify users’ location and transactional behaviour to support the ID verification process and prevent fraud.

Evolving technology – mainly related to mobile – makes fast, accurate, and secure ID verification anywhere in the world a reality. By combining this technology with access to accurate contact data from billions of global consumers in real time, the door is open for forward-thinking financial institutions to move into new global markets and drive strong growth securely.

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Banking

Bank of Idaho Selects Teslar Software to Enhance Customer Service

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Bank of Idaho Selects Teslar Software to Enhance Customer Service 2

Partnership enables bank to spend more time with borrowers, better meet their needs

Teslar Software, a provider of automated workflow and portfolio management tools designed to help community financial institutions thrive, announced today that Bank of Idaho selected its platform to improve productivity, freeing lenders to spend more time with their borrowers and improve service to the community.

Bank of Idaho is a business-focused bank that is one of the top SBA lenders in the state of Idaho. The bank first partnered with Teslar Software to leverage its automated workflow and portfolio management tools across its entire lending portfolio.  It selected Teslar’s portfolio management, loan review, construction management and exception tracking solutions.

During the implementation process, Teslar’s technology made an impression, specifically its automation capabilities, so the bank felt it would be beneficial to also leverage Teslar PPP Forgiveness to help its businesses more efficiently navigate the PPP forgiveness process.  Known as “the bank with a heart,” supporting community businesses with PPP loans has been a natural fit for the institution. And, Bank of Idaho hasn’t just helped its current customers; of the 1,200 applications processed, nearly 50% were new relationships.

“Teslar’s automated workflow and portfolio management tools are changing the trajectory of our organization,” said Jeff Newgard, CEO and president of Bank of Idaho. “The streamlined, modern processes are improving our customer experiences and allowing us to build stronger relationships. We’re building a frictionless banking experience that can help businesses in our community get through this difficult time and grow with our support and attention.”

Leveraging Teslar Software’s platform will enable the bank’s lenders to spend less time bogged down with traditional, manual processes and more time engaging with borrowers. They’ll also be able to increase visibility and communication across departments and can better serve customers and cross-sell.

“Bank of Idaho prides itself on taking a consultative approach to customer service,” said Joe Ehrhardt, CEO and founder of Teslar Software. “The bank truly cares about its customers and effectively helping them. Through partnering with us, they’ll be able operate more productively and empower their bankers to focus more on forming meaningful relationships with their customers, which is more important today than ever before.”

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Banking

Turkey’s Akbank Will Use FICO Optimization to Build Value in Credit Card Portfolio

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Turkey’s Akbank Will Use FICO Optimization to Build Value in Credit Card Portfolio 3

Akbank’s teams will also use FICO’s advanced decision optimization capabilities on a range of business problems

Highlights

  • After a competitive search, Akbank chose FICO to optimize its consumer credit card limit decisions for new and existing customers.
  • Akbank also plans to use the same optimization technologies in solving different problems such as setting loan amount and price, and customer credit limits
  • FICO is also working to futureproof the bank’s risk management growth by training in-house Akbank team on the optimization methodologies and action-effect modelling.
  • Akbank’s strategy is to establish an optimization centre of excellence.

Global analytics and decision management provider FICO is providing decision optimization software to manage the growing consumer credit card portfolio for one of the biggest Turkish retail banks, Akbank.

More information: https://www.fico.com/en/products/fico-decision-optimizer

FICO has a global pedigree in credit limit management optimization projects, and many of the world’s leading financial institutions use its optimization technology. Akbank will tap into this depth of experience to create an optimization centre of excellence. Akbank has tasked FICO to train an in-house team so they can build their own applications for other areas,  such as loan amount and pricing optimization, customer-based limit optimization and restructuring optimization.

FICO will configure and develop sophisticated “action-effect” models for Akbank’s retail lending team using FICO® Decision Optimizer to manage their initial credit limit assignment and the on-going limits for Akbank’s consumer credit card portfolio.  The action-effect models project customer responses to offers in order to determine the best offer for each customer.  These will be configured into the optimization framework, allowing the Akbank team to choose an operating point that meets their objectives and constraints.

Serhan Pak, Akbank’s senior vice president, Retail Lending, said: “We view optimization as a strategic tool for Akbank, as we build on excellence in credit analytics to reach our strategic goals. The robustness of FICO’s analytic technology and the fact that their optimization applications are in use worldwide made them a natural choice for us.”

Emre Unlusoy, regional director for Turkey & Balkans at FICO, said: “Akbank is aiming to improve profitability, market share and revenues while decreasing non-performing loans. This is an ideal use of optimization, which brings together analytics, decision logic, mathematical optimization and domain expertise.”

FICO® Decision Optimizer enables business analysts to develop, assess and improve the decisions that drive customer interactions and business results. Users can test decision strategies for the optimal results that balance trade-offs between cost, risk and reward, by factoring in dynamic economic and market conditions.

Akbank’s mission is to be the leading bank that drives Turkey into the future. The bank has grown to over 750 branches and employs more than 12,000 people.

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