An Overview of Multi-Channel Banking

Banking Turns Increasingly Digital

It is not an exaggeration to say that digital consumers are like no other. They belong to a generation that is more educated, more technology savvy and better connected socially than any other that came before. If they need information, they will research it on the Internet; if they want advice about a particular purchase, they will ask their social network. Their demands fuel innovation in the technology and communications space, giving rise to new, better products that they can’t get enough of. They seek convenience, reach, availability and instant gratification.

These expectations have split over to their banking activities too. Now, digital consumers want their banks to acknowledge these needs and fulfill them, just like other retail businesses are doing. Banks are responding by delivering their services over a range of digital channels including the mobile and the Internet.

Digitization in Africa and the Middle East

Today, digitization is a worldwide phenomenon. The following data indicates how it has pervaded banking in this part of the world.

Banks in Africa and the Middle East record the highest number of average monthly ATM cash withdrawals. In 2009, this figure was 3,914 compared to 1,631 in North America, 2,797 in Western Europe and 2,789 in the Asia Pacific region.

In the Middle East, Internet penetration is 33.5% which is 3.3% of the world’s Internet penetration. Mobile penetration in the UAE is already in excess of 200% and broadband penetration is expected to reach 100% by 2012. On the African continent, mobile adoption has crossed 50% in 26 nations; South Africa achieved twice that number at the end of last year. As a natural progression, this region will surely see high rates of adoption of these media as banking channels in the Middle East and African regions.

What is Multi-channel Banking?

With the availability of alternative modes of banking, consumers started to use more than one channel. They went to the ATM to withdraw cash and enquire about their account balance. Then they started to use Internet banking, first to monitor their accounts, and then to make payments and transfer funds. At the same time, they also made visits to the branch. This was the time when consumers “banked on multiple channels”.

The drawback of this kind of banking was that each channel was isolated from the other. Data generated on one was not visible on another, which meant that if a consumer initiated a transaction at the call center, but resumed it at a branch, he would have to explain the entire situation all over again to the staff. Banks too lost the opportunity to render efficient service or cross-sell, to these channel siloes.

With the integration of channels on a single platform, multi-channel banking became reality. Today, banking is integrated across devices, channels, products, and functions to provide seamless experience to customers across all touch points. Accordingly, banks have a 360-degree view of customer activity on every channel at any point of time. Customers enjoy similar visibility, and are also able to seamlessly transition from one channel to another, even during the course of a single transaction.

What Multi-channel Banking brings to Banks

A recent report by a research firm indicates that although branch investment still tops the list of a bank’s spending, investment in other channels like Internet and mobile banking is on the increase. In Middle East and Africa, spending on online banking channels is expected to touch US$ 50 million in 2012.

Banks stand to gain substantial benefits by investing in integrated multi-channel banking.

• Cost reduction

Multi-channel banking helps banks optimize operating costs and resources. For instance, branch staff engaged in routine operations such as cash disbursement may be deployed in other, more critical functions. With fewer customers walking in, branches can be smaller, and more cost effective to establish and maintain. Channel integration reduces data duplication. Overall, it is estimated that the cost of serving a customer or transaction through Internet and mobile banking is a fraction of that incurred at a branch.

• Customer satisfaction

Seamless multi-channel banking makes banking convenient for customers as it allows them to transact from anywhere, at any time. Since transactions and data are updated in real time, customers have access to the latest information irrespective of the channel. Integration also provides customers a single view of all the accounts held by them at the same bank. These facilities improve customer satisfaction and with time, loyalty.

• Customer acquisition

Banks with an advanced multi-channel banking system can attract customers of other banks, which are lagging in channel integration. They can also use channels – such as mobile banking – to make in roads into markets where they have insufficient branch presence.

• Revenue enhancement

By providing a unified view of customers and enabling tracking of their channel usage, integrated multi-channel banking improves banks’ cross-selling efficiency to bring them more business from existing customers. By reducing cost per transaction as mentioned earlier, and improving sales, multi-channel banking can make a reasonable impact on banks’ top and bottom lines.

The Profile of an Ideal Multi-channel Banking System

A multi-channel banking system should be simple, convenient, affordable and anytime anywhere accessible, providing a unified view of customer’s banking relationships for customers as well as for relationship managers. True multi-channel banking extends beyond the provision of banking access over multiple channels, to add value through:

• Superior user experience

Seamless customer experience is the essence of multi-channel banking. A customer should be able to use a bank’s service on any of its channels. Also, having initiated a transaction, he should be able to continue it on another channel without obstruction. For instance, if he receives an offer about a new high interest deposit on SMS, he should be able to buy into it using his mobile, but send all the supporting documentation via the Internet banking channel.

• Personalized banking

Today’s consumer has a strong sense of uniqueness that he would like service providers to acknowledge with personalized products and services. He desires personalized banking facilities that enable him to set reminders, quickly access links and”favorite activities”, and choose the channels on which the bank must send alerts or initiate contact. Not only that, he may also want to personalize each channel separately. Multi-channel banking must be able to fulfill all these expectations.

• Interactivity

While customers are happy to conduct routine transactions on self-service channels, they invariably seek human assistance when faced with a problem. If ready help is not available at that time, they may give up the channel altogether. Banks can prevent this eventuality by making help available to customers on every channel, at the touch of a button. This can be achieved with a text chat facility – already provided by many – or an audio/video help service, or even co-browsing, whereby a customer care representative can remotely see the customer’s desktop and walk him through the solution. What’s more, using social media, banks can not only make these situations more interactive but also enable a customer to seek assistance from other customers who have had similar issues.

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Developing New Overseas Channels For Your Export Business? – A Project Based Approach!

Has your business revenue and growth rate reached a plateau in the USA and/or Europe? Is organic growth simply not going to take your company to the size that your investors need it to be? Many companies face this challenge but do not have the financial wherewithal to grow by merger and acquisition. The challenge is to move into new and relatively untapped markets, these are very often found outside the boundaries of the home market and the need to look overseas is glaringly obvious. Yet it is not so simple as it may first sound! You might know which of your products you want to export but do you know which country to start with, is it Japan or Korea or China or India or even smaller countries such as Singapore or Taiwan or Australia and it simply is not practical to cover them all. This is without even asking questions such as what mods will need to be done to the product and packaging, what export terms do we use, how will we get paid, what taxes are imposed, what transfer pricing will be required, what warranties will be obligatory, will we need local staff etc. etc. etc.

Then there is the question “who can we get to handle this?” Joe always takes his vacation in someplace like Bangkok or Beijing so he is probably a good candidate! The bottom line is would you take Joe, a Detroit automotive sales manager and ask him to go and close business in Korea or take Pete, a London IT sales manager and send him to set up distributors in China? Of course you wouldn’t but the reality is that this is exactly what companies are doing – they are expecting their good people to manage setting up overseas business in the same manner as if it were their home based business. Believe me it is a world apart and I don’t just mean geographically – it’s culturally and business practice wise so varied from country to country and that doesn’t even touch on the language issues.

So many companies have failed miserably when trying to set up their international business channels. A company would never think twice about creating a new production line without a project manager and a well structured project plan, even firms fitting new kitchens these days offer a project manager so why would you approach such a critical process of growing your global business on an ad-hoc basis? Would you appoint an IT project manager to manage the build of a water treatment plant or a project manager of a washing machine plant to build aerospace engines – No!  So why do so many companies believe they can succeed in international markets by using an American or European centric resource? This is an international sales and marketing task where the markets are very different than that of the American or European so doesn’t it make sense to use an appropriate resource? Think of this venture like a project and think of your International manager like you would a project manager – they have a difficult task to accomplish and need to approach it professionally, you need a lead person who has the skills and experience of not just managing overseas agents but a hunter that has worked the territories before, knows the trail and can sniff out the right targets. He needs to understand how overseas channel partners think, what drives them and turns them on and to be able to empathize with them.

I remember when I worked for a data communications company, we were doing quite well throughout the APAC region via our existing agents and distribution channels but we needed an order of magnitude increase to grow the company to the next level. I approached the International VP and told him that I needed to remove myself from the international channel management role and focus on a new growth strategy. I planned, managed and focused my effort and channeled all my energies into striking up an OEM deal with one of Japan’s largest companies. Because of the strategic and planned approach and with good tactical positioning I was able to secure the deal which yielded an enormous increase to our Far East revenues and ultimately had a huge impact on the share price of the company as a whole. Of course it left me with another problem and that was I had to source manufacturing for this scale of volume in Asia and to negotiate with the Taiwanese to get this up to speed asap, but it was a nice problem to have. The message here is that I managed the task like a project, I had the connections in Japan, knew how to deal with the Japanese from my past channel role and did not try to shoehorn it in with my day to day job of managing the existing partners.

Yet it is not only the key individual that makes it a success. Like all successful projects they start with capturing the requirements and creating a requirements specification, defining a solution, building a solution, trials and tests and rollout. It  has a timeline, budget and cash flow. The foregoing tasks can be translated into Discovery – in brief the establishing of the products or services that can be effectively and profitably introduced to the overseas market, a readiness to export survey, reviewing agreements and having a market plan, what costs will be required, will technical support be needed out in territory and how much and for how long etc. Research – What channel structure is best suited to your portfolio, which locations are lucrative and compatible, market size and acceptability, how do your competitors operate, attending trade fairs and exhibitions to glean local knowledge and so on. Engage – striking up discussions, working contacts, meeting players, evaluating strengths and weaknesses, what investment they will make, selecting the right channel, have them test trial your products, come up with a local rollout marketing plan etc. Administer – monitor the whole process with cross checks to the original requirement and refinements. Manage – ensure the process is running to time and budget, communicate with other internal stakeholders, make sure the introduction of your product to the local market is going as planned. Only then will you Succeed. Think of this as your international DREAMS model approach and conduct it like you would any other project.

You might have read all this and be thinking yeah it all makes sense but our organization simply doesn’t have the manpower to spare to focus in this depth and detail, we will just have to use our existing resource that manages the region. Well that’s your decision but you might want to look at external resources that specialize in this sort of business, have done it successfully many times before and can work alongside your existing team without you losing control. There are pros out there that will act as an extension of yours, even carry your business cards and act on your behalf and when the job is done they will hand off to your existing management team. You are now thinking OK but that will cost me lots of extra money over and above my current budget, well there may be a small extra charge but there are those that will take the bulk of their reward out of the initial sales that are delivered from the new channels and this makes it a win / win business proposition. If you do look externally make sure you look at those that can provide you with an end to end service and approach it in a methodical and structured manner. Look at Expand Internationally as a starter.

Live a Travel Channel Life – 5 Tips For Global Nomads

There is a growing number of people around the world throwing their cares to the wind, quitting their jobs, and making a new life for themselves on the open road traveling from country to country. Whether you are making an all-out lifestyle change or easing into it a little at a time, there are tricks and techniques for doing it right.

To life like a star of the travel channel, try these 5 tips:

Tip #1: Carry only the essentials from country to country:
When you embark on your journey, you may find yourself packing two nice, big suitcase full of clothes and goodies from REI. Hint: try narrowing your luggage down to what will fit in a backpack or a single suitcase. Either way, as you travel from country to country, you will notice that your list of essentials grows shorter. All you really need is a bit of cash or travelers checks, your passport, maybe a good travel guide and a couple changes of clothing.

Tip #2: Buy cheap:
If you are going to make a life or significant hobby out of living the travel channel life, you need to learn the insider secrets to buying cheap airfare. Do the research ahead of time. For you, airfare will become as significant an expense as is a mortgage and car payment for your more sedentary friends and family. Do your homework now and save thousands and thousands down the road.

Tip #3: Know the best countries to visit for saving your cash:
As you can imagine, the cost of traveling and living in the various countries of the world differs dramatically from country to country. If you are planning to life for months or years away from home, plan your global route according to your budget. For example, if you are planning to travel Asia, visit South and Southeast Asian (e.g., India, Thailand, and Vietnam) when you are low on cash. If you just made a withdrawal from the bank account in your native country or got a paycheck from your online business, head to East Asia (e.g., Singapore, Hong Kong, and Japan) to see the sites there. The same pattern applies in the Americas, Africa, and Europe as well.

Tip #4: Double up when you can:
If you are traveling along, you will find that it is usually very easy to meet people on the road. When you do have the opportunity to meet up with someone you can trust with whom you can share accommodations or even a taxi ride to the airport, I highly suggest doing so. At the same time, you will need to say goodbye to these travel bodies not infrequently, so be big enough to say “I have to go my own way now” then the time comes.

Tip #5: Use Internet cafes to maintain a travel blog:
Traveling this big world can be pretty lonely sometimes. A great option that global travelers have today that was not there even a few years ago is to keep a travel blog. Your regular entries of text and (when possible) photos will give you a sense of continuity and will give your friends and family back home a much better sense of what is going on with you as you have the time of your life.

To live a travel channel life, make sure you educate yourself about how to buy cheap airfare and accommodations. Be sure to pack only the essentials and educate yourself ahead of time about which countries will be cheaper to live in. And, take advantage of the Internet to keep yourself centered and your family and friends up to date.