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Industry Research : Banks Turning to Social Technology to Connect with Customers
An increasing focus by financial institutions to engage with customers means that there are new opportunities for managing social interactions via IT, according to IDC.
A recent perspective by IDC Asia-Pacific financial insights consulting and research associate director, Michael Araneta, titled A new customer-centricity agenda for 2012 – What Asia/Pacific banks are up to, highlighted the social technology themes shaping the banking industry.
According to IDC’s research, risk management in compliance had grown in importance from being ranked seven in 2006 to become the top focus in 2010, and while it may have dropped to third place in 2011, the analyst firm expects it to remain very much on the minds of financial institutions.
"In turn, core banking has fallen from the top spot in 2006 to occupy the fifth position in 2011 as banks switch their mindset towards one of ‘customer centricity’," Araneta said, "a category that has gone up from being in forth place in 2006 to occupy the top place in 2011."
IDC sees risk management as being the top strategic initiative in 2012, followed by customer centricity, and business process reengineering and core banking.
This "race to customer centricity" has recently been demonstrated by institutions such as Westpac, Chinatrust, Maybank, DBS, and OCBC Bank.
"Westpac’s Gail Kelly has said in the past that ‘we’ve got an absolute passion to have customers really delighted by the experience that they have,’" Araneta said.
IDC has found that there are five new themes surrounding customer centricity, with the areas being analytics, instantaneous response, community and collaboration, hyper-personalisation, and mobility.
"What eight Australian institutions told IDC was that mobility, analytics, and communication and collaboration were the most important themes for their organisations in the next two years," Araneta said.
Big data and better use of that data to improve the customer experience, develop new products, and better prevent fraud were also priorities for banking institutions.
Additionally, instantaneous response is a key consideration, with mandates to cut turn-around times.
"We observe ‘customer promise’ programs to shorten waiting times, cut queues, serve customers in branches by a certain number of minutes, open accounts within a certain time frame, or approve credit quicker than usual," Araneta said.
Some of the local examples IDC has seen implement these strategies include National Australia Bank’s UBank division reducing account opening times from two days to five minutes and Citi in Singapore making loan approvals possible in an hour.
"The new CBA core banking system is aligned to real-time banking," Araneta said,
With trends such as these, unified business communication vendor, Interactive Intelligence, is seeing opportunities for its contact centre automation, enterprise IP telephony and enterprise messaging solutions in markets such as Australia.
Interactive Intelligence finance and insurance solutions group director, Chuck Wilson, expects big data to be a key local consideration as institutions look for ways to better inform them on "how to interact with customers."
"All of the channels of communication have opened up," he said, "but the challenge is how to act consistently across all of them."
"When you’re talking about the additional media types versus traditional phone calling, the consistency is different."
Interactive Intelligence A/NZ and Pacific managing director, Brendan Maree, said the vendor is currently working with insurance companies in the region and aims to "work its way up" to the big clients, such as the "big four" banks.
Interactive Intelligence uses both a partner and direct model for its channel strategy.
"Whether we go direct or with a partner depends on the client," he said.
Posted by Veronica Silva Cusi, news correspondent
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Published: Thursday, March 22, 2012