Once again, the balance of power has shifted towards the consumer and this time, we have the ICT revolution to thank for it. Far from being passive users of goods and services, today’s customers are demanding integrity, information, openness, social responsibility,
personalised attention and an active role for themselves from the businesses they transact with. These expectations have dramatically changed the rules of customer engagement and thrown fresh challenges at manufacturers and service providers alike, the financial
industry being no exception.
What does this liberation of consumer power mean to banks, and more importantly, their customers? Several implications spring to mind.
Since the days of one way communication are over, our banks must open their organisations to ongoing dialog with consumers. They are not only answerable to the regulators, but to the people at large, who expect transparency, fair dealings and more than lip
service to environmental and social causes. But above all, banks must learn to deal with their customers, one on one. This is because being fully aware of the choices open to them consumers will shift allegiance to those service providers that best fulfil
their needs. Personalisation is the new hygiene.
Some years ago, understanding individual requirements was quite infeasible, but now, the Internet and social media have made it possible for banks to seek the opinion of millions of customers by spending very little money and time. The same technologies
coupled with flexible core platforms are enabling banks to cater to unique consumer needs, however small. Thus, a customer can create an ideal bundle of financial products over a self-service channel, specify what must appear on the Internet banking landing
page and pre-set the choices on an ATM screen as per the most commonly used transaction.
Incredibly, it’s not just existing customers who desire personal attention in their banking relationships. The ubiquitous mobile phone has made financial services accessible even to those without a formal bank account, in the form of mobile payments. At
the same time, microfinance initiatives are bringing hitherto underserved segments into the financial net. And while the latter may have a very different set of needs than their urban counterparts, their expectations of fulfilment are exactly the same. Hence,
we can anticipate the following trends to gather momentum: no-frills products, mobile payments, vernacular channels and biometric authentication.
Change in buying behaviour will enlarge the role of banks beyond pure banking. Consumers now expect to be able to shop for anything, anywhere, at any time, thanks to the flexibility of online commerce. With developments such as app stores, mash-ups and location-based
technology taking root, the mobile channel will be the runaway winner of the future. Banks must cash in by making a play wherever possible in this consumerism-driven value chain, either on their own or in partnership with manufacturers, resellers, telecom
companies and application providers.