Recent years have not been kind to banks, and the unstable economic climate didn’t help the cause either. However, there are some exciting developments taking place within the industry, which will help rehabilitate the damaged institutions of today into tomorrow’s banks.

1. White Paper
A Better Bank, Tomorrow
- Kannan Amaresh
From being institutions of trust to becoming objects of consumer disaffection, banks have had a rough ride these past few
years. The general opinion is that they had it coming, that banks are themselves to blame for their current circumstances.
Fair enough. However, let us not allow our indignation to overshadow some exciting developments that are taking place
within the industry – developments, which I believe, will rehabilitate the damaged institutions of today into tomorrow’s
successful banks.
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2. And it’s true. Banks have been gathering information from customers for
decades, even if they didn’t know how to use it to their advantage in the past. But
analytics has changed all that. Today, based on a customer’s spending behavior,
a bank can predict where her next big expense will come from. Tomorrow, they
will approach the customer with personalized products (or advice) to enable
her to realize her spending intent into a high quality purchase. This depth of
Discussing the findings of a recent
customer knowledge will help banks stave off the threat from non-banking
poll by Gallup, which showed that
newbies eyeing their territory.
U.S. consumers’ confidence in their
banking system had plunged to an Were banks done in because they were overambitious, wanting more profit,
all-time low, the company’s chief bigger territory, greater glory? Hopefully, those days are behind them. Chastened,
economist stressed the need for banks banks have realized that a big bang doesn’t always create a bigger bang for the
to factor behavioral economics – or buck. I believe that they will take a similar approach to transformation. Rather
the impact of emotions – into their than shooting for the stars, they will aim to transform goal by goal, until they
customer strategies. I want to take that realize their ultimate vision. Their transformation will be guided by modularity
thought further to say that tomorrow’s of purpose and function, both, and will have enough flexibility to accommodate
successful banks will use behavioral reality as it changes.
data – especially spending patterns –
I see tomorrow’s banks being led – and not driven – by consumers. What’s the
to create highly personalized products.
difference? Today, banks are mostly playing catch up with market trends, or
scrambling to meet every need that consumers complain is unmet. I’m hoping
they will play smarter going forward: asking customers what they want, giving it
‘‘
to them, and using that as a platform for staking leadership. Just like U.K.-based
online lender Wonga has done. Wonga saw how difficult it was for banking
These offerings will send a customers to get a loan when they needed small amounts of cash in a hurry.
message to customers They swooped upon the opportunity to create a short-term loan service that was
fast, flexible and convenient. Their consumer-led psyche is abundantly evident
even from their home page, which opens with two simple questions that say it
all: “How much cash do you want?” and “How long do you want it for?”
We may not see you
Instances of consumer-guided innovation at banks, is a subject that’s fascinating
anymore, but we still to say the least. Look, for instance, at the trend, clearly indicating that consumers
are beginning to bank more and more on their personal devices. Where were
know you better than
these pocket-sized financial advisors and service providers just yesterday? But,
anyone else. more on that another time.
Tomorrow’s banks will be smarter in other ways too. For instance, they will
simplify. Not by downsizing or cutting corners, but by knowing what complexity
to retain (after all banking is a complex business) and what to let go of. For
instance, they will continue to add channels (and increase complexity of
distribution), but at the same time, make channel processes so seamless that it
becomes much simpler for customers to switch between them.
More of tomorrow’s banks will be like Frank by OCBC – designed to include
the yet-to-be-banked from an early age. Their success hinges on their ability to
ascertain the extremely personalized needs of the next generation, and fulfill
them with the right products and services.
Is it possible to be and yet not to be? Yes, when you’re talking of technology.
Banking technology is becoming more pervasive within banks without becoming
more visible as technology per se; yet it’s everywhere, on video walls, blogging
tables, in computing surfaces, and in future, it will be inside gesture sensing teller
devices as well. Technology organizations within banks are talking in real-time
to the business, not unlike pit-stop technicians servicing the Formula One racer
on-track, all the way to the winning lap. That’s how, for instance, a progressive
bank, today, is looking to enhance its customer experience. Every customer
2 | Infosys – White Paper

3. requesting service, through any channel, thanks to technology, is Which leads us to the branch bank of the future. Or shall I say,
an entity known, in real time, to the bank’s backend that is, in turn, “experience center?” Because that is the role of the branch in
fully equipped to redirect the client to a channel free to service the tomorrow’s bank. Already, banks are staffing their physical branches
customer within a defined SLA (For example, 5 minutes or lesser). with better qualified – albeit fewer – employees, or upgrading
The result? No more banking rush hours. Just tech-enabled happy the infrastructure with “cooler” technologies and plush fittings to
hours, all day. Every day. convert what used to be a humble transaction outlet into a place
where customers and bankers can meet, share pleasantries, and
Fittingly, pervasive technology will create a pervasive brand of
transact meaningful business.
banking, which will operate upfront and behind the scenes to
facilitate transactions with a financial or even social implication, MainStreet Bank, a community bank based in Northern Virginia
whether or not they involve actual exchange of money. I know in the U.S., has launched a service combining online banking and
of one bank, which put together a Football World Cup package social media, which it calls “airbanking®”. The tagline reads: “Bank
comprising air and match tickets, accommodation, foreign where you breathe.” What amazing foresight! A few years down the
exchange and travel insurance when it found that customers had line, I expect that the distinction between online/social and offline
difficulty making their own arrangements. Such things will be the will die out, because mobility will reach such heights that we will
rule, rather than the exception, with tomorrow’s banks. always be online and our social avatar will always be available
to friends. Social media will be embedded in (and not external
Another unmistakable trend in banking is the emphasis on
to) every banking engagement – between consumers, between
experience management. Banks are not only in competition with
employees, and between consumers and employees. And we will
one another in delivering the best experience, but also with other
move in and out of these interactions as naturally as we breathe.
industries. Experience creep, or consumers’ expectation that
banking experience will be of a standard similar to that provided So, let’s pin responsibility when it’s deserved, but at the same time,
by other retail consumption, will force banks to outdo themselves let’s also give credit where it’s due. Tomorrow’s banks are worthy
in this area. So, 24x7 channels will strive to achieve 100% uptime; of it.
one online mode will blend seamlessly with the other; and physical
branches will be better appointed or more service-oriented or both.
REFERENCE
Banks Need To Play Upon Customers’ Emotions To Regain Consumer Confidence, Jan 10, 2012
http://articles.businessinsider.com/2012-01-10/strategy/30610862_1_banking-industry-banking-system-
financial-crisis#ixzz1uBb3QBFj
https://www.airbanking.com/
About the Author
Kannan Amaresh
Associate Vice President and Client Partner, Financial Services Europe
Kannan Amaresh has been with Infosys since 13 years, working across consulting, thought leadership and client management. He
is a Chartered Accountant by profession and has published many papers and spoken at multiple forums, including Financial Times,
University of Cambridge, etc. Kannan’s recent focus areas are Digital Consumers and Mobility. His views are that of a practitioner
and a thought leader.
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© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledges
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