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Five Steps towards Better Banking
Cost minimization and profit maximization is adopted by banks worldwide to increase the efficiency and profitability.
Banks around the world always have economic and regulatory challenges. Due to cut throat competition, bankers are wooing their customers with non traditional business models. Some of the new platforms and entities such as online only banks and retailers offering banking services could take over the conventional banking methods. Cost minimization and profit maximization is adopted by banks worldwide to increase the efficiency and profitability. Some of the innovative ways towards better banking are discussed below:
- Mobile Banking: This is one of the most happening innovations in contemporary banking followed by most banks worldwide. Bank of America has around 12 million mobile banking customers and with a view to sign up more people for mobile banking, the bank is outfitting its teller stations with a QR code (quick response code) that can be scanned by mobile users and download the mobile application. Mr.David Godsman, Sr. VP (Online & mobile solutions) says this initiative is part of a campaign to increase mobile banking in general and increase its customer base. Apple has placed a mobile wallet in over 100 million iPhones via iOS6. In their latest iOS6 upgrade, they released an update for passbook, which creates a mobile wallet. This new wallet application is called passbook and has broad implications in payments and commerce in general. AmEx credit cards will be fully integrated with Apple Passbook. This can be used as a mobile wallet, where users can store information on credit card purchases, flight information, tickets etc. This mobile banking solution also eliminates paper receipts as all the information would be available on the iPhone. Hence, this will put paper receipts out of the register. Such innovative banking solutions will definitely help towards taking banking closer to and eliminate traditional methods of banking which are cumbersome and time consuming.
- IT Standardization: IT standardization includes simplifying shared infrastructure and eliminating unwanted information. This helps in achieving efficiency, improves visibility and eliminates redundant systems and also reduces compliance risk. Customers now rely on mobile devices and internet for product information or to seek customer support.
- Streamlining Processes: Banks often follow disjointed, complex and manual processes which consume lot of time and reduce the efficiency of the banker, which in turn leads to lot of confusion. Spending excess time on administrative activities at the expense of customer service is another issue prevalent among banks. These issues are prevalent among most banks worldwide and working on them on a continuous basis will increase the productivity of the bank in general and less irated customers in particular. This can be achieved by working cohesively by streamlining processes, clarifying roles and responsibilities and simplifying the product menu. Some of the processes such as mortgage application to lending process can be reduced by 80%, signatures by 75% and eliminating 80% of process handoffs.
- Understanding your customer’s changing needs and requirements: This is a proactive measure to be adopted by the bankers to understand what their customer’s requirement and how can they help to achieve this objective. The first step is to ensure that your frontline staff asks questions to your customers and understand what they need. Banker’s can expand their client base by understanding their requirements and suggest products and services matching their requirements. This helps in customer acquisition and also increases the business relationship between the banker and customer. The frontline staff need to be trained to track how to assess the customer’s requirement. They should also be trained on the client need assessment so that whenever an interaction happens between the bank’s front line staff and the customer, the banker can be assured that there is a meaningful dialogue happening between them and the conversation is aligned with the bank’s culture and business objectives. Another initiative such as branch-centric model can be adopted as the needs of customer’s changes from region to region, so a customer will have different choices and preferences depending upon where they are located. You can increase customer service by having the service concerns posted in windows, notice boards and other convenient places. Using short slogans thanking the customer for using the services of the bank not only help in customer retention and make the customers happier with the services rendered from the bank.
- Safe Banking: After the Cypriot banking crisis, customers are reluctant to take risks and require more information and security on their money. A friendly front line staffer can speak to the customers and educate them on current happenings; such a demonstration of competence will go a long way in making them feel safe and secure. During times of financial crisis when consumer markets will remain skeptical about their investment decisions, this step will make a huge difference in creating a positive rapport among the customers.
Banks can also consider rewarding their long standing and loyal customers with gift coupons and other incentives, as this not only helps in customer retention but also enhances the relationship between the banker and the customer. Constantly changing laws are forcing banks to interact with their customers and price their products and services. Mobile banking solutions are growing rapidly in the world. Facilities which include remote deposit of cheques are helping the customer from doing such routine tasks from their home. Some of the banks in U.S. such as USAA have adopted cheque deposit feature through iPhone which has helped their customers immensely reducing their time and effort. Some of the other prominent ways for better banking include making better banking decisions, capitalize on the experience of others, and obtain fresh ideas and insight through constant market research and accessing critical financial information.
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