What is common among the following banks? ING Direct (Canada), Tesco Personal Finance (UK), The One Account (UK), IYBank (Japan), Citizens Bank of Canada (Canada), Banque Directe (France), President's Choice Financial (Canada), Inteligo (Poland), and Egg (UK).
They have 2 threads in common; one, all of them are success stories of banks going the 'Direct' way and two, they have been least touched by the recent global banking crisis. Well, there is another thread that binds them. They were all featured in the 'Direct Banking Case Studies' of Celent way back in December 2004. In its report, Celent examined the level of success of these aforementioned direct banks closely and concluded that direct banking did prove a viable alternative to penetrate new markets and garner customer wallet share.
Direct banking has come long way from the holiday season of 2004 to the Good Friday of 2009. Today, direct banking is gaining ground in the financial services market with a vengeance. Vengeance, I say because the mantra for banks today is to make huge savings on operational costs and the best way is to cut down on their branch operations while finding ways to reach prospects and customers. And if you thought going direct meant losing personal touch, and abating trust and negatively impacting the confidence that your branch has been providing to your customers all along - then you are mistaken, provided you are doing it the right way. Classic cases are ING Direct and Inteligo in Poland.
ING Direct was successful in adopting the local flavor for their products in all the countries they operated. The experience of Inteligo in Poland also shows that as long as the customers get convenient offers, they prefer to bank directly, rather than turning up at the branches.
The first worry that could come to your mind, as you plan to go 'direct' is the technology infrastructure. The good news is that, technology enables you to go 'direct'. However; your success is determined by how smoothly you balance your customer relationships with the technology innovations. In short your relationship with your customers is the key.
For relationships to have any meaning and for banks to make the best of any channel, particularly the Direct Banking strait, they should be able to see customers as whole and not mere pieces of a jigsaw puzzle. This implies having a 360-degree view of customer.
Banks need the ability to calculate the total value of customers on all business done across all channels - which in turn, would allow them to get the larger picture of customer usage and necessities pattern. Banks while going direct should provide customers with the supreme banking experience according to their necessities, consistently across are direct channels be it phone, net, ATM or mobile.
With Direct Banking 'Targeted Banking' becomes easier and much more efficient. While the right product offering gives banks the platform for direct banking success, a wrong product proposition can harm its plans to go direct. Using a direct banking platform, even this risk can be declined by letting the customer choose his banking mix. On studying the cases of successful direct banks it is clear that, retaining and rewarding loyalty is also a must.
The towering strengths of direct banking is operational cost savings and the fact that the bank is able to provide its customer exactly what he or she wants in his or her space and time. At the end of the day the strength of a bank is in getting the maximum wallet share of the customer and the slogan of direct banking is perfectly in tandem: "Dear Customer - you choose the way you bank and when you bank"!
Rajesh B L Narasimha
Vice President - Sales
SunTec Business Solutions
As Vice President for Sales, Rajesh B L Narasimha oversees business development in Asia Pacific and Middle East Regions for the Banking and Financial Services vertical at SunTec Business Solutions. Rajesh is a senior banking domain subject matter expert and he has greatly contributed in advising customers on exploiting the value proposition of SunTec's Relationship-based Pricing product TBMS-F, for enhanced profitability and growth. Prior to joining SunTec, in 2006, Rajesh brought in over 13 years of experience working with leading IT companies like Wipro, Compaq and Polaris at senior levels of which a decade was focused in Banking and Financial Services domain.
Article Source: http://EzineArticles.com/?expert=Rajesh_B_L_Narasimha
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