Asian banks have become leaders in channel innovation over the last ten years. We have seen numerous fresh initiatives across the region delivering new services and innovative user interfaces. However, Asian customers are becoming increasingly more savvy and connected. Xiaomi and Micromax mobile phones are flying off the shelves as more and more customers move online. Consequently, banks have to become even more sophisticated in their approach. It is simply not about channels any more. Institutions need to focus on interactions and journeys instead. Customers want an anti-channel strategy.

 

Fifteen years ago, channels in retail banking were relatively simple. There were branches, call centres, ATMs and the internet. They all worked in their respective silos and everyone was happy (unless you got stuck in a maze-like IVR menu…that was really bad). The concept of the channel was important because it framed the way banks developed products and processes. They were the starting point of most developments. 

 

But then, technology started blurring those nice crisp lines. Suddenly there were text messages, USSD and then Smartphones. People started using Facebook and Twitter. Customers began to use multiple channels, and even worse, multiple channels within the same transaction. Then everyone became a bit confused. And that confusion still reigns today.

 

Now, some bankers talk about ‘the iPhone channel’, ‘the tablet channel’, even ‘the webchat channel’. This has muddied the whole concept of a channel to the point where it is no longer relevant. Customer interaction types have fragmented at a time when each interaction is more important than ever. The established way of looking at channels has therefore become a hindrance and not a help.

 

It is time for banks to consider an alternative: instead of focusing on channels, banks need to focus on customer interactions and journeys. Every time a customer touches a bank, they have an ‘interaction’. Where a customer’s need requires multiple interactions, they have a ‘journey’.

 

In tomorrow’s world of retail banking, all customer interactions will come down to either person to person or person to machine. Banks should overlay a number of variables which define how an interaction will be delivered:

1. Customer Type – should a bank offer a high value customer a different type of service by phone or branch, or give them more functionality on e-channels?

2. Customer Interaction – a customer looking to complete a quick transaction will want a materially different experience than those looking for advice.

3. Customer Location – a customer using a smartphone walking down the street will use it differently to one sitting on a sofa. A customer using social media will want a different experience to a customer using internet banking. Is the customer in the same physical location? Can they complete a cash transaction?

4. Customer Device – a tablet will be used differently to a smartphone.

 

In addition to optimising interactions based on these variables, banks must deliver seamless journeys where multiple interactions are required. Ideally, most customers’ needs should be satisfied in a single interaction. However, if a ‘longer’ journey is required, then banks need to offer comprehensive case management.

 

Over the past decade, Asian banks have been at the forefront of development when it comes to delivering an improved user experience. Adopting an anti-channel approach will help maintain the region’s position as a global leader, with the added benefit of giving increasingly discerning and demanding customers the service they want through the channel(s) they prefer at the points of the day when they choose to interact and transact with their chosen financial provider. The customer has a high degree of control, while the bank benefits from reduced running costs (thanks to an uplift in self-service) and gains valuable insight into user behaviours through the use of advanced analytics. All of this is technologically possible today. Our message to Asia’s banks is why wait? Seize the opportunity now before one of your competitors gets there first.