Go to LinkedIn’s search and type ‘Bank + Innovation’. The result will show you professionals who are part of an innovation program, a transformation department or a research and development lab. Few years back who would have thought that a services industry like banking would have to focus so much on innovation to be successful.
Innovation was mainstream to product companies and banking products did not provide much scope of innovation. A loan was a loan. Banks strived for achieving operational excellence through systems and processes and that used to be the differentiator. But everything is changing now. According to The Financial Brand, banks are spending on innovation initiatives across customer experience, channels, sales and marketing, business processes and product offerings, all because of demanding customers and due to increasing challenge from Fintech companies who are bringing a rapid paradigm shift to banking processes.
Banks across the globe are working relentlessly to redesign the entire customer service and experience. Customers are no longer only interested in better interest rates but are also demanding customer centric touchpoints in banks processes. This includes a seamless omni-channel experience, low turn-around in issue resolution, understanding personal preferences, security alerts based on individual’s transaction history pattern, automation in branches and processes. The list can go on.
In an omni-channel bank, the customer could perform desired tasks though mobile app, website, branch, or call-centre and the context would not get lost. Therefore, a complete and deep understanding of the customer is paramount to be successful. It is also important to know which channel works where and have a tailored reach out approach for segments and even customers through personalization. Specialists need to be hired and new innovative training programs must continue running.
The bottom line is that all of these are already happening in banks as they should. The only difference is that smart banks are finding ways to test these programs and initiatives in some way before they incorporate these in their processes.
If you are Head of Branch Transformation in a bank and you want to know whether adding self-serve kiosks in your branch will reduce teller workload, how will you take this capital-intensive decision? If you are a product manager and you want to offer an innovative program to reward borrowers for early payment of EMIs by reducing interest rates, how will you know whether this attracts consumers and reduces delinquency? Robo branches, video conferencing, mobile lending, experience zones in branches, personalized offers, new underwriting practices…there is so much to do for banks. Banks not running in-market tests will be shooting in the dark. A bigger problem could be losing market share to banks who are already running in market tests, iterating, improving and then finally rolling out new innovative ideas.
About Trial Run: Trial Run is a cloud-based product that lets companies conduct business experiments on sites, markets and individuals BEFORE they implement. It helps companies scale their experimentation capability efficiently and affordably by providing insight into which decisions will work and which will not.