Banks look to self-service

By Staff Writer for Consology
Johannesburg, 26 Nov 2007

South African banks are expected to invest heavily in solutions that allow their customers to access banking services at places and times convenient to them, says a recent survey conducted by World Wide Worx, on behalf of Consology.

The survey: "Self-service Strategies in South Africa 2007", shows that out of a respondent base that included insurers, retailers and telecommunications firms, banks attach the most strategic importance to self-service.

John Ziniades, CEO of Consology, says self-service has changed the way banks and customers interact, from the first ATMs to online banking. He adds that in the future, he expects to see banks build on these channels in the hopes of diverting customers away from more costly channels, like physical branches and agent-staffed call centres.

"Self-service channels provide not only cost benefits to banks, but also allow them to offer consistent and convenient customer service," he explains. "This leads to increased customer satisfaction and loyalty, resulting in a reduction in customer churn, which the survey revealed is more important than cost savings."

The reports show that the benefits banks see from self-service are cost savings from automating transactions, reduction of customer support costs, cross- and up-sell opportunities and deflection of calls from the contact centre. It also shows that the Web is the channel of choice for self-service. This is the area in which Ziniades expects to see banks invest.

"Online banking started with customers being able to conveniently check statements and balances. Once customers became comfortable with simple banking tasks online they moved on to make online payments. There is potential for banks to make more effective use of the Web to manage their relationships with their customers," he says.

Local banks have recognised that the Internet is a powerful tool for customer acquisition and retention; however, over the past five years, banks have focused on usability and look-and-feel of their online banking sites, rather than on key functionality enhancements, states Ziniades.

He expects banks to start focusing on packaged self-service solutions that allow them to introduce new functionality to their online portals. This, he says, should lead to the alignment of self-service channels such as interactive voice response, mobile, Internet and ATMs with each other, in order to offer a consistent level of service.

Banks are unable to communicate effectively with their customers through their existing electronic channels regarding the myriad complex financial service products, he notes. As a result, customers are driven to their call centres, causing call centre costs to spiral out of control. Self-service solutions can help banks to communicate the benefits of these products more effectively, he says.

Online banking does not offer any true personalisation functionality, adds Ziniades. He says this type of functionality could be used to personalise credit card statements and cheque accounts, allowing for categorisation of transactions by business, personal, entertainment, and food, for example.

"Most banking portals only allow for online statements and transactions, and banks are missing out on some key opportunities to drive customer loyalty and increase their share of the customer`s business. To capitalise on these opportunities, banks need to shift from their home-grown online banking systems to self-service suites."