Enabling seamless customer experience through digital transformation of channels

• Asian Banker Research shows that a large component of direct retail sales (asset and liability products) is still focused on branches. Digital channels contributed less than 10% of the retail banking revenue for 80% of the banks in Asia Pacific.
• Banks need to adopt a ‘customer-back’ perspective and deploy a set of critical customer journeys to achieve an omni-channel customer experience.
• Branches are here to stay while their technology enablement, processes and strategic roles will continue to transform.

Banks across the globe are digitally enabling their distribution network with innovative technology and automated features for a competitive and differentiating customer experience to improve their market share. A recent survey by The Asian Banker across Asia Pacific banks shows that channel innovation remains the top technology investment priority for banks. More than 55% of the surveyed banks are focusing on initiatives to improve their channel and distribution capabilities in 2016. Increasingly, transactions are being shifted to technically advanced digital kiosks which are enabled with features like real-time video interaction and biometrics. The interactions inside the branches are becoming more relationship-focused with real-time analytics for targeted sales and new acquisitions. Bank processes are also becoming more automated, straight-through and integrated with mobile devices for positive customer experience. At the same time, the banks are expanding unique service offerings across digital channels such as mobile phones and other devices. As banks move towards digital enablement, there is also an increasing need to evolve to a more seamless service across the different channels.

Though banks have expanded their digital channel capabilities and there are more active customers, retail sales remain low on these channels. Asian Banker Research shows that for 80% of the banks in Asia Pacific, digital channels contributed less than 10% of the retail banking revenue. This indicates that a large component of direct retail sales (asset and liability products) is still focused on branches.

Key trends

Shashank Luthra, director, Digital Transformation Office, ASEAN, Cisco, shared the key trends and challenges that banks face in their quest to digitise in this changing context.

“Banks face an interesting conundrum as far as branches are concerned. High-net worth customers have significantly reduced their visits to branches but the branches continue to be crowded with other customers conducting low-value transactions. The banks need to act on two imperatives. First, they need to ensure that when a high-net worth customer does walk into a branch, it is able to offer them an amazing experience and seize the opportunity to deepen the relationship. Second, banks need to digitise and automate their processes, and educate their customers to move more transactions to digital channels thereby offering a seamless digital banking experience instead of a slow, fragmented branch-based encounter. This reduces the transaction load and frees branch-based employees to focus on relationship-building and sales.”

To improve customer service, banks are investing in various touch-points. The problem however is that customers want to interact seamlessly with their banks while banks continue to function in operational and processed silos across different channels making integration a challenge. A strategic change in managing customer interaction is necessary.

Luthra said that: “Banks need to adopt a ‘customer-back’ perspective and identify a set of critical customer journeys that can be deployed to achieve an omni-channel customer experience. Such an approach will help to identify the most important integration points across channels.”

“From Cisco’s perspective, in many of the customer journeys, we see the contact centre becoming the key platform to enable the omni-channel customer experience. However, this contact centre is not a traditional one. It is more of an ‘expert hub’ that is staffed by product specialists and other appropriate experts who can service customers regardless of the channels used to reach them. Such an approach will help ‘future-proof’ banks since customers will also be able to use new channels in future (virtual reality anyone?) to reach the same experts,” he added.

Leading banks across the globe are implementing the capability for customers to reach out to remote banking experts through real-time video interaction. It not only improves customer experience but also expands interaction beyond banking hours while improving workforce productivity and lowering costs. For example, banks could use the video teller machines (VTM) to distribute resources across branches or deploy remote banking experts to serve customers through multiple channels like branches and mobile.

James Cronk, global director, Financial Services Industries, Cisco, pointed out, “Underpinning the need to have an ‘expert hub’ to enable such an omni-channel experience is based on a seamlessly integrated and intelligent network infrastructure. The ability to interact with customers across any channel with any device is dependent on this core capability whilst ensuring that end-to-end security is embedded at the same time.”

“All banks will have a network and a portfolio of security solutions, but it will become increasingly important that these platforms are optimised to establish a secure and effective digital capability whilst delivering an excellent customer experience,” Cronk added.

Empowering branch experience

The rapid growth and high penetration levels of mobile devices offer a powerful opportunity for banks to boost customer service. They can effectively integrate unique mobile features such as location details and real-time information connectivity into branch processes for better customer experience.

“We believe that banks can leverage the demand for free wi-fi access in branches to complement customer’s use of mobile phones,” said Luthra. He noted that a wi-fi based platform can enhance customer experience in the branches in the following ways:

• Identify high-net worth, walk-in customers and direct them to a high-priority area for a unique experience. 
• Ensure customers spend less time in branches for transactions by allowing them to complete any form-filling before they arrive. Banks should have the capability to identify such customers and place them in a quick-transaction queue, and complete the final part of the transaction rapidly.
• Leverage information about the number of customers’ visits in a branch and the time spent in order to modify staffing patterns, and improve productivity and customer experience.
• Provide mobility to branch staff by allowing them to attend to customers quickly with “minor” requests such as balance or status enquiries.

Digital branch transformation initiatives

Branches are getting increasingly digitised, innovative and efficient to compete effectively. Cronk shared an example of a recent Cisco implementation at the State Bank of India (SBI). The bank pioneered a digital transformation journey by rolling out key digital initiatives including “SBI InTouch” branches. The digital outlets are equipped with high-definition video conference pods (remote expert pods) and Cisco video-enabled endpoints that connect to branch peripherals like printers, scanners, in order to complete the business process. From connected peripherals to on-demand experts, this solution provides a plethora of rich features that singularly elevates the branch experience for banking customers.

In another example, Malaysia-based Bank Simpanan Nasional (BSN) with more than eight million customers and 400 branches, rolled out virtual teller machines to provide better services to its customers. The machines offer customers shorter queuing time by deploying shared-teller resources quickly and efficiently between multiple branches. It also allows available tellers from any other location, whether urban or rural, to serve customers remotely, thus helping to improve customer experience without driving up the number of tellers.

The future branch

Banks that are shifting their transactions to digital channels may reduce their physical footprint to manage their costs but branches are here to stay. It is the technology enablement, processes and strategic roles of these branches that will continue to transform.

The transformation of financial services’ physical footprint over the next two to three years is taking shape. “We have seen a change in perspective from our customers in the last few years. There is an increasing acceptance that branches will not disappear but they will definitely morph in size and function. We see them becoming smaller in size and increasingly important as a focal point for specialised interactions and transactions, The branches will also be complemented by a wider spread of physical transaction channels (for example VTMs alongside ATMs),” Luthra added.

“We will also observe (especially in emerging markets) an expansion in the physical mobile channel, i.e., the relationship manager meeting affluent customers while being supported by remote experts through video. In short, the physical footprint will remain very important but evolve in composition and proactively adapt to dynamically changing customers’ needs,” he concluded.