“Digital” is the new buzz word that has led to disruptions across multiple industry segments, including banking. The early form of banking process transformation involved the conversion of manual processes to automated ones. However in today’s context, it is not enough to just “automate,” but to “go digital” as well.
The early form of transformation occurred when banks started identifying their traditional manual driven processes and decided to re-engineer them partially or fully in order to reduce overall turnaround times and improve productivity. Now, however, when customers want to do everything at a click of a button using their smartphones, it is important for banks to proceed to the digital level in order to accomplish the following:
Optimize the workflow. Let us take the example of a typical loan origination process. Traditionally the customers had to visit the branch or alternatively someone from the branch had to visit the customer to pick up physical documents in order to begin the application process. These physical documents would then travel across departments as part of the customer credential verification process. Digitization allows customers to upload documents to a secure cloud-based server using their internet banking credentials. The data on this cloud-based server is then made accessible to different departments within and outside the bank.
Customer centricity. Almost all banks have an inside/out approach to business processes, which means that these are highly governed by their internal structures, models and products as well as services. However, there is a need to move to an outside/in view, which is essentially the way a customer would look at the process. Creation of customer requirement maps and customer journeys would help ensure that there is a certain amount of customer centricity incorporated in the way banks design their processes.
Capturing customer insights. Customers are increasingly averse to visiting branches in preference to online or mobile banking. Given this shift in consumer behavior, banks need to look at alternate ways of capturing customer data in order to ensure customer retention and enhance the customer experience. Banks need to mine customers’ social media profiles, spending behavior and various other structured and unstructured data to obtain customer insights.
Omnichannel-enabling operations. Omnichannel is the need of the hour. Customers expect uniform experience across all channels of interaction. This puts the onus on banks to reexamine their existing systems and structures and make them less siloed. Banks needs to streamline the front end and back end of channel platforms so that customers get the same experience across delivery channels. Banks can also create a new customer experience layer on top of their existing core systems and can optimize the customer journey without the need to completely rewrite their existing Information Technology (IT) infrastructure.
Real time customer interactions. Previously, the definition of personalized customer service was talking to a phone banking officer but today it is moving in the direction of video chats, which requires a complete revamp in the way the customer service processes are designed. Banks need to provide 24/7 customer support for video chats through mobile, internet banking and ATM Banking. Also, as the banks are cutting down the number of tellers and specialist officers in branches, video chats should be available in the branches with the specialist officers.
Accomplishing the above requires a precise understanding of the term “digital.” In our experience, most banks have already embarked on some form of digitization but the most important need is to bring these forms together and integrate them meaningfully. For banks to fully realize their digital potential, they need to eliminate their departmental silos. They also need to approach digitization as more of a program than a project, which could require some bold decisions made in the larger interests of the organization.
Mr. Singh is senior business consultant, Digital & Retail Banking, with Pune, India-based Tech Mahindra. He can be reached at firstname.lastname@example.org.