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Today, customers implicitly expect and demand better services. Markets are becoming increasingly commoditized so innovation in the form of value added services is the only differentiator.
We spoke to Dinesh Verma, Head- Product Management, Global Transaction Banking, Nucleus Software on the changing demands of the transactional banking space and how to cope with it.
Offering integrated transactional banking solutions
Increasingly, the pressure is on banks to offer integrated transaction banking solutions that meet existing and future customer needs by providing seamless, integrated, real-time and consistent experience across multiple channels.
A wave of technology change has already occurred as banks adopted core banking technology to enhance customer relationships and expand the market for banking services. These technologies could enable banks to "go-to-customers" and enable door-step banking through virtual banking. For instance, cloud computing and big data technologies can reap both scale and scope economies.
Integrating customer data across platforms
Banking technology is poised to make a big leap in the near term towards integrating customer data across banking platforms, facilitating trading in a more secure manner, developing virtual desktops and private clouds to centralize information across desktops by making them available to different employees on need-basis, enable speedier transaction processing and faster settlements.
Fraud controlling mechanisms
Financial liberalization and technology revolution have allowed the developments of new and more efficient delivery and processing channels as well as more innovative products and services in banking industry. Along with the development of technology, fraudulent use of the technology also emerged. The RBI, Government and the banks must develop fraud controlling mechanisms for the development of Banking services and customer trust.
Transaction banking as a global business has largely remained under-leveraged though it was one of the most resilient businesses during financial crisis despite plunging trade volumes.
Despite shrinking margins, significant revenue growth of approximately 170 percent or a compounded annual growth rate of roughly 11 percent is expected from 2011 to 2021 (Source: BCG, Transaction Banking advantage, 2012).
With right focus, proper positioning and alignment with customer preferences, we believe that transaction banking will continue to deliver value and be a front runner for being the shining and guiding star for banks.
Breaking down traditional product silos
The challenges faced by banks today revolve around breaking down traditional product silos and offering structured & personalized products/services over multiple channels. Today regulations (like Basel III, SEPA, PSD, AML etc.) demand banks to provide and track lot of compliance related data/statistics, needed both by customers and the regulators; simultaneously increasing the cost of doing business in global markets.
This is not possible without having a holistic and finer view of both their customers’ needs/preferences and bank’s in-house operations.
Understanding customer behavior
It is imperative that banks invest in understanding customer attitude, behavior, psyche and financial needs for retaining their competitive positioning.
An increasing need is being felt for tools and techniques to enable and facilitate banks to have a 360 degree view of customers business and provide one perspective of their operations, thus significantly reducing the effort to consolidate regulatory data across different internal teams and provide business intelligence to create customer centric business models for an increasingly diverse and integrated customer-bank financial value chain.
Tech-driven VAS innovation
All this is not possible without technology. Markets are becoming increasingly commoditized so innovation in the form of value added services is the only differentiator. Increasingly, the pressure is on banks to offer integrated transaction banking solutions that meet existing and future customer needs by providing seamless, integrated, real-time and consistent experience across multiple channels.
Banks are looking beyond run-of-the-mill transaction banking products and services flanked by payments, payroll, receivables and other singular processes and focus on offering personalized and wholesome working capital management solutions revolving around customer’s operating working capital cycle; gone are the days of “ one size fit all” approach.
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