The so­cial bank­ing par­a­digm

Rev­o­lu­tion­ary chan­nels are now emerg­ing and can make a big dif­fer­ence, says Alexan­der Rauser

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Cor­po­rate and re­tail banks are fac­ing com­pe­ti­tion from in­no­va­tive business mod­els and new, non-fi­nance com­peti­tors. His­tor­i­cally, banks have in­no­vated slower than other busi­nesses, how­ever ad­di­tional pres­sure is now be­ing added by shrink­ing mar­gins and tighter reg­u­la­tory re­quire­ments. In­no­va­tion is the key to growth and com­pet­i­tive dif­fer­en­ti­a­tion. The banks prob­a­ble to shine are those that are will­ing to ef­fec­tively de­velop new prod­ucts, ser­vices and chan­nels in re­sponse to the chang­ing mar­ket en­vi­ron­ment. To date, the bank­ing in­dus­try has not seen much dis­rup­tive in­no­va­tion but one thing is cer­tain, tech­nol­ogy is driv­ing in­no­va­tion in fi­nan­cial ser­vices.

To this point, the in­ter­net has been at the fore­front of chan­nel in­no­va­tion but now other rev­o­lu­tion­ary chan­nels are emerg­ing. It is pro­cesses, rather than prod­ucts, that are in­no­vat­ing fi­nan­cial ser­vices, adding sig­nif­i­cant value by way of cost sav­ing and im­proved pro­duc­tiv­ity. Here are some ways in which banks have im­proved the pro­cesses con­nected to prod­ucts and ser­vices: con­tinue im­prov­ing their user ex­pe­ri­ence, in or­der to:

and prof­its ser­vices and pro­cesses de­signed by the bank cus­tomer and support cus­tomer re­ten­tion that help solve cus­tomer prob­lems the things cus­tomers are look­ing for – users want their bank­ing to be in­te­grated more ef­fec­tively into their every­day lives.

A hand­ful of banks are now pro­vid­ing fi­nan­cial ser­vices on so­cial me­dia:

- ated a bank­ing app for its Face­book page that al­lows users to trans­fer money and mon­i­tor their ac­counts 24 hours a day to make trans­ac­tions and pay their bills on the so­cial net­work di­rectly.

There are two sig­nif­i­cant ways that this new wave of par­a­digm shift in the way peo­ple bank: to be present even closer to its cus­tomers, get data in­sights and cre­ate a more en­gag­ing user ex­pe­ri­ence and pat­terns in or­der to cre­ate con­tent that works per­son­alise con­tent to cus­tomers via tai­lored of­fers based on in­ter­est, up-sell­ing or cross- sell­ing prod­ucts based on cus­tomer pro­files, prod­ucts that fit the life stage of a cus­tomer and so on. For ex­am­ple, ad­ver­tis­ing mes­sages can be tai­lored to­wards a spe­cific seg­ment such as stu­dents. This can in­crease the clos­ing ra­tio due to tar­geted mes­sag­ing and tai­lored prod­uct of­fer­ings for this spe­cific cus­tomer seg­ment.

User ex­pe­ri­ence

When a cus­tomer is of­fered a ser­vice that fills a need they were not pre­vi­ously aware of, and this need be­comes some-

they

will

feel ex­tremely the po­ten­tial to do this. Most Face­book users check their Face­book within the first 30 min­utes of each day and so­cial bank­ing will, in turn, al­low users to check their bank ac­counts too. This be­havioural change has the po­ten­tial to shift the way cus­tomers track, mon­i­tor and spend their money. At this point surely not many cus­tomers think about trans­fer­ring money on­line to their Face­book friends, thus the need does not ex­ist yet. How­ever, as seen in the ap­pli­ca­tion cre­ated for

Rauser... ‘By pro­vid­ing the cus­tomer with tools, de­mand can be cre­ated’

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