By utilizing technology to improve their relationships with customers, financial institutions are becoming more and more innovative in the ways they do business. Advances in Internet technology continue to make global banking a reality for more and more customers. Institutional size no longer differentiates large banks from small banks. Large money center banks are delivering sophisticated services via the Internet to small customers, who were traditionally served by regional or community banks. In contrast, small banks focused on delivering a particular financial product or service over the Internet can successfully compete with global banks in their particular specialty areas.
In today’s environment, financial institutions must work to become more customer-centric and Internet-ready. Banks must consider their customers in decisions about how they operate. The Internet is a critical success factor in this environment and must extend to every corner of the organization, both internally and externally. The two strategic umbrellas that define customer-centric are personal care and business care.
Personal Care
To deliver personal care, financial institutions need to understand their customers to depths not previously possible and then derive greater value from this information. Financial institutions continue to ask for solutions in the business-to-consumer (B2C) arena that can help them integrate and enhance customer-facing delivery channels across an ever-increasing array of digital devices. Digital channels play a major role in achieving a customer-centric business environment. Solutions include customer relationship management (CRM) and sales and marketing automation. Supported by data warehousing, the technology systematically collects, stores, analyzes, and disseminates a broad range of customer information across the enterprise.
Business Care
Removing the middleman, also known as disintermediation, is desirable, except when you are the middleman. Banks face a major risk of disintermediation of their payment franchise, including cash management, commercial lending and commercial investments. Banks face the risk of simply being utilized as a payments commodity rather than as the primary facilitator of the payment process. In order to protect and grow the business, banks must play an active role in electronic payments including electronic bill presentment/payment and electronic procurement. Leading financial service institutions are leveraging e-procurement as a service that enhances the value of the business-to-business (B2B) multi-service web portal. The long-term potential of e-procurement initiatives for customer-centric financial institutions will focus on the strategic opportunity to re-intermediate business customers toward the sponsoring institution.
With the Internet changing the way the world does business, institutional size no longer determines market power.
Implementation of an Internet-ready infrastructure requires institutions to transition to new multi-tier enterprise architecture to access a consolidated view of the customer at the point of interaction.
Today banks in Latin America are evolving from the use of websites or portals just for marketing and basic transaction processing to heavy-duty transaction processing. Leading financial institutions are starting to play a very active role in electronic payments-including bill presentment, e-procurement, and e-brokerage-to make their sites as sticky as possible to capture initial market share.
In order to become customer-centric and Internet-ready organizations, financial institutions need to build their e-business infrastructure to enhance their ability to sell, service customers, do procurement, set up marketplaces and market sites for procurement. They also need to enhance their ability to effectively market, sell and retain customers on the web; effectively manage the multiple channels; and provide a consistent level of customer service by a unified profile of the customer’s behavior.