The digital consumer.

Summary: The online banking space has stagnated for far too long, according to a new report from Celent. It is time to reconnect!

The way people bank has changed significantly over the past few years. We are living in an era of the 'digital consumer'. Gone are the days when the only option was to trundle down to the branch. Customers today want information and products at their fingertips - whether it is through ATMs, internet banking, mobile banking, tablet banking or call centres. But many banks are struggling to stay ahead of the game.

Customers are demanding that their banks online offerings keep up with the times, according to a report by Jacob Jegher, titled Top Trends in Corporate Online Banking. He says the evolution of the Internet has provided users with "rich and interactive experiences". Unfortunately, the banking industry has not kept pace.

"For the most part, financial institutions recognise their online shortcomings. The question is: Why haven't they acted on them? What can they do about it?

How can they keep up with ever increasing customer demands? These questions become even more difficult to answer as cost estimates for large projects balloon, and there is increased pressure on the corporate side of the bank to keep the ship afloat."

The good news is that next- generation corporate online banking is on its way. Bits and pieces of it have already landed and will evolve, he adds.

"It's challenging for banks to build business cases that involve online portals and user experience overhauls," Jegher says. "It's easy to get caught up in sexy technology, but at the end of the day, it's about keeping customers satisfied, and striking a balance between functionality and user experience."

The report highlights four key corporate online banking trends:

Portal Perplexity 

u[logical not] Banks are struggling with cash management portal development

u[logical not] Categorisation of portal elements is necessary to obtain a cohesive dashboard

Consolidation Confusion

u[logical not] The convergence of online and mobile banking. Is there one solution to rule them all?

u[logical not] Vendor and solution consolidation

u[logical not] User Experience and Functionality

u[logical not] The quest to find the balance between user experience & functionality

u[logical not] Streamlining onboarding & administration

u[logical not] The tablet will act as a catalyst to the redesign of corporate online banking

u[logical not] Social media is emerging in

Fraud Prevention

u[logical not] It's time to overhaul multifactor authentication 

The report points out those users are oblivious to the challenges banks have in getting online banking up to the speed of the web.

"These challenges are being compounded by the range of devices (tablets, smartphones, computers) and operating systems the consumer may want to use in order to bank."

With the digital world moving so fast, it is hard for banks to keep up with the new technologies. "Sure, banks can decide to build an iPhone app, build an Android app, refresh the web experience, and then build something for the tablet. If this development is done in a siloed manner, it will cost the bank a fortune."

Celent says that financial institutions need to work with their customers to determine what it refers to as "pain points".

It recommends a series of measures for them to come up to speed:

u[logical not] Regularly survey and interview customers to gauge priorities and interests

u[logical not] Accept that mobile and tablet devices are playing a fundamental role in the enterprise

u[logical not] Conduct an internal review and assessment of cash and treasury management functions and capabilities

u[logical not] Explore the software vendor market and meet with relevant vendors to understand how solutions are evolving

u[logical not] Employ external assistance

DIGITAL GENERATION

It is not just the corporate banking world that is lagging behind. Another report from Infosys Finacle says technology is moving much faster than in the past.

"The last two decades have witnessed a paradigm shift in the way people bank. While the shift from branches to ATM based cash withdrawals and from there on to internet banking was slow, it has been a different story in the case of mobile banking. The growth in adoption of mobile banking over the last three years has been tremendous."

It says that what lies ahead are smarter devices, newer modes of communication and a techno savvy digital future for multi-channel banking. It recommends that as technology vendors and solution providers continue to innovate, banks and financial institutions should collaborate with them.

It adds that the goal should be to deliver the right products and services to the right customer, through the right channel, in a personalized manner without compromising on the human touch inherent in bank branches. nBME

MULTI CHANNEL BANKING A five-point strategy to empower banks to have a truly multi-channel offering

1 Recognise customer needs

* Understand what products & services customers want - and how and when they want them delivered

* Understand which segment of customers would prefer making payments via mobile devices/internet banking/branches

2 Define the role of channels

* Define the products and services that could be offered via different channels and their convergence across multiple channels and devices

3 Promote channels usage

* Ensure that customers understand the benefits of using different channels over branches

* Deploy robust security frameworks, authentication mechanisms and fraud detection and prevention methods and reassure customers that their identity and savings are secure

* Concerns about "security" and "user experience" are the major reasons which prevent customers from moving away from branches

4 Innovate

* Come up with innovative ideas that can solve common problems faced by customers

5 Measure

* Definerelevantmetricstoevaluatetheperformanceofmulti-channelbanking.

* Invest in layered analytical solutions that provide actionable insights by combining data

2012 CPI Financial. All rights reserved.

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