Three-dimensional visibility breathes new life into banking

The last decade has seen a significant shift in banking service paradigms, resulting in fewer people using physical branch facilities and more opting for remote banking.

IDC research has indicated that there were already 122.3 million global online banking users in 2004; an increase of 87.9 million since 2000.

This move has largely been encouraged by the banking fraternity, which celebrates the benefits of reduced branch, infrastructure and staffing costs enabled through remote banking facilities. But, taking the customers out of the branch effectively puts them out of your direct sales reach. Your branches are exactly where you want your customers to be if you want to build profitable relationships with them, says Marius Krige, market director for Unisys Africa.

Late in 2005, professional services firm Deloitte undertook to independently research the fees and charges levied on customers by South African banks. The results made scandalous headlines, revealing that clients pay more for the services their banks provide than was expected or revealed by early investigations.

The study, financed by FinWeek, revealed that a popular opinion that banking charges are basically the same all over is incorrect. One of the big four retail banks, in fact, is 17% more expensive than the other three major banks and it would cost the average family R6 500 a year more to simply manage its finances at that institution`s branches.

It would seem then that banks are pushing customers into adopting the more convenient remote banking route as it would help reduce the cost for Mr and Mrs Average, and make their lives significantly easier to boot.

However, contrary to expectations created by the findings of the study, the branch remains more important to banking institutions than alternative delivery channels such as the Internet and telephone banking. It is still the primary source of high-value sales and the strongest physical embodiment of the brand.

This presents something of a challenge to banks and customers alike. Banks are working towards becoming far more customer-centric, especially in branches, but high service charges seem to make people reluctant to use physical banking facilities more than is absolutely necessary. Also, the existing channel infrastructure in many banks is unable to support a highly customer-centric banking strategy. A single, truly 360^0 view of the customer remains elusive as processes are channel-centric and technology infrastructure can not support the increasingly customer-centric demands of the business, hence the high fees and charges.

Many of these constraints can be solved through branch renewal projects that are driven by methodologies, which emphasise the importance of knowing where to start, how to proceed and what direction to take to secure immediate returns on investment and to avoid pitfalls along the road to keeping customers in the branches. One such methodology is 3D-Visible Enterprise (3D-VE), which enables a bank to see how every facet of its branch business works; it generates 3D blueprints of the cause-and-effect relationships between business vision, process, application and the technology infrastructure that supports a bank`s branch network.

The methodology provides a better understanding of potential problem areas and clarifies where focus should be placed first, and contributes significantly towards increasing operational efficiency and productivity, reducing expenses and improving customer service; a point particularly pertinent in light of the Deloitte study. It also offers a clear picture of expected results. To successfully implement a branch renewal vision, banks must address all areas of the business. Strategy, technology and process are indelibly interconnected and must therefore be approached as such.

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Transforming the branch network starts with identifying strategies that enhance revenue, cut costs, maximise efficiency and provide an environment that transforms the branch into a sales and service centre. Face-to-face interaction with customers is crucial to bank sales, as is the quality of customer service. Not only are better service levels one of the most reliable methods for achieving competitive differentiation, but also improved service levels translate into better execution on cross-sell opportunities and improved customer retention levels.

Today customers see tellers as administrators rather than salespeople who can help them select a product. This impression is further enforced by the ever-present queue. This must change. Customers expect speedy service so the teller needs to keep the line moving, but the opportunity to cross-sell must not be lost.

Banks need to enable branch staff to offer professional financial counselling to customers by deploying sales and support tools that offer needs analysis, scripting and product recommendation capabilities. They must provide pertinent customer information at the point of service so staff have a complete understanding of their relationship with the customer.

Banks must closely integrate branch systems with existing or future customer relationship management initiatives; closely integrate alternate channels to provide effective communication; and improve localisation capabilities to better tailor products to customer mix. They must also redesign and automate processes to minimise the time consumed by transaction processing and maximise the sales opportunity.

The only way to elevate the overall operational value of a branch is to reduce costs and redundancies while simultaneously driving sales opportunities. To do this banks must eliminate obsolete, costly and difficult-to-support technologies, incorporate workflow and imaging strategies to support straight-through processing, and build an IT infrastructure that lays the foundation for an integrated, multi-channel environment. They must eliminate the inherent inefficiencies of legacy, client/server branch systems by adopting browser or thin client-based systems.

Using 3D-VE, banks can apply tried and tested processes and solutions to create a clearly articulated branch strategy that overcomes existing problems and delivers desired results. By creating 3D blueprints of the business and technology requirements of the branch that encourage an entirely customer-centric mindset, and that can combine the right location with the right ambience, banks are able to test new concepts before actually spending huge sums of money on doing it. 3D-VE makes this possible. It breathes life into the branch.