Archive for October, 2011

Jumping On The Omnichannel Bandwagon – Part 2

Thursday, October 27th, 2011

In Part-1 of this blog post, we introduced the concept of omnichannel banking and explained how it differed from multichannel banking. We’d claimed that 100% multichannel support was neither necessary nor practical. In this Part-2, we’ll explain why.

While banks have traditionally viewed their relationship with customers through the prism of channels, customers don’t necessarily share that perspective. Customers just want to get the job done in the most convenient and secure manner possible. Besides, according to the recently published World Retail Banking Report 2011, “…customers view the branch and internet as having different strengths. The internet excels in information gathering, transacting, and looking up account status, customers said. The branch is the preferred channel for solving problems, indicating the value of having a human touch in certain situations. Mobile banking has yet to make a positive impression”.

No wonder customers in different countries expressed an overwhelming preference to open accounts at the branch even if most of them wanted to research new accounts online.

A majority of customers globally want to research online but buy at a branch

The above chart makes it clear that a majority of customers want to research online but buy at a branch.

This clearly shows that fully fledged multichannel support is not really necessary.

Now, let’s look at the feasibility of delivering 100% multichannel support.

The typical retail banking landscape is dotted with a plethora of systems that have evolved over a period of several decades on mainframe, client server, Web 1.0 and other heterogeneous technologies. While allowing every banking transaction to be conducted on every channel – that is, providing 100% multichannel support – is technically possible in many countries, it would call for a massive overhaul of existing systems. Even in the best of times, the ROI for such “rip and replace” projects has been uncertain.

So, fully fledged multichannel support is not practical either.

Good news is, customers are increasingly displaying omnichannel behavior, and banks can jump on the omnichannel bandwagon quickly.

Omnichannel behavior is the broader adaption of “omnichannel retailing”, a term we first heard about from Paula Rosenblum, Managing Partner of Retail Systems Research, who, in turns, credits it to Leslie Hand of IDC. It refers to increasing consumer readiness, or even preference, to use more than one channel to execute a single transaction provided there’s “something in it” for her. Point to note is that the behavior is voluntary and not forced upon the consumer by the business whom she’s dealing with.

I can readily relate to omnichannel behavior from my own experience of buying a Palm T|X PDA in London a couple of years ago. Starting with a Google Search, I landed on, an excellent price-comparison website. PriceGrabber listed several deals and informed me that the “buy online, collect at store” one offered by the leading electronics retailer Curry’s Digital was the best. I placed the order on the retailer’s website and made the payment online and was happy to collect the product from the retailer’s nearby physical store in Canary Wharf instead of having it shipped to my home address since I wasn’t sure if I’d be home when when the consignment arrived.

While online only meant Internet at the time, it could very well include Mobile and Social Media today. With mobile apps like RedLaser making child’s play of doing price comparisons at the store, omnichannel behavior is  bound to become de riguer soon.

With most banking products being intrinsically more complex than retail goods, we expect omnichannel behavior to gain traction very quickly in retail banking. It’s not difficult to imagine a scenario where a potential customer hears about a new banking product on Facebook, gathers more information about it from the bank’s Internet Banking portal and finally visits a branch to seek face-to-face advice before deciding to buy it.

On the face of it, it might appear that banks have to first get their multichannel strategy right before they can think of omnichannel banking. We feel differently. In Part 3 of this post, we’ll suggest ways by which banks can jump on the omnichannel bandwagon even if they’ve missed the multichannel bus. Stay tuned!

Differentiate Your Product By Going The Extra Mile – Part 3

Thursday, October 20th, 2011

When I wrote Differentiate Your Product By Going The Extra Mile, I’d meant it to be the second and concluding post. But, I recently came across a few more updates – some positive and some not so positive – on this subject that I thought I must share, hence this third part.

One, as I’d guessed, recent realtime SMS alerts sent by banks in India for credit card transactions are the outcome of government regulation applicable across the industry.

Two, credit where credit is due: I’ve since come across one bank – Kotak Mahindra Bank – that has been sending out realtime SMS alerts for over three years for credit cards and eight years for debit cards. I’m sure there might be a few others who have been doing so. I encourage readers to share their knowledge about these banks by leaving comments at the end of this post. Kudos to them for delivering such customer-friendly products well before they became compliance requirements. To me, it hardly matters whether they’re doing it out of kindness of their hearts or a selfish desire to cut down fraud losses, as some have suggested in response to my previous post.

Three, when I recently received the following SMS alert from BANK1, I discovered one more scenario in which BANK1’s product failed miserably and made my blood pressure shoot up instantly:

BANK1: Thank you for using your credit card for INR xx,xxx.00 on 15-Oct-2011.

I was at home when I received this alert, I hadn’t done any online shopping, and I definitely haven’t setup any recurring transaction of such a large amount, so I was almost sure that this was a fraudulent transaction. A five figure amount didn’t help quell my anxiety either. It was only a couple of hours later when my wife returned home that I learned that she’d used her BANK1 addon credit card to pay our daughter’s school fees. Therefore, it eventually turned out that there was no cause for concern around this transaction. (In case you’re wondering why I should be getting the SMS alert when my wife uses the addon card bearing her name, BANK1 and all other banks I deal with send account alerts only to the primary cardholder regardless of who uses the card.)

Let me call this usage scenario Addon Card Present One-Off . Since addon cards are quite popular in India, this scenario is far more common than the previously described Card Not Present Recurring one where BANK1’s product was found wanting. By failing to support Addon Card Present One-Off, BANK1 is going to cause angst to many more cardholders.

To me, this is the tipping point at which I’m led to the conclusion that ‘no alert is better than a bad alert’.

I’ve already written to BANK1 via their Internet Banking portal asking them to either enrich their SMS alert to include the merchant name or stop it altogether. Based on past experience, I’m mentally prepared to receive at least 2-3 emails with statements of platitudes like “we take your complaint seriously”,  “it is feedback like yours that helps us improve the quality of our service”, blah, blah, blah. Hopefully, by the fourth attempt, they’ll get my point. Depending on what they do afterwards, I’ll either hold on to this card or ditch it when my anxiety gets the better of my loyalty.

Jumping On The Omnichannel Bandwagon – Part 1

Thursday, October 13th, 2011

Enough and more has been written about how banks lack fully fledged multichannel support. For the uninitiated, a “channel” refers to the medium of communication between customers and businesses such as retail banks. Branch, Phone (call center), ATM, Internet Banking, Mobile Banking and Social Networking are typical channels in the context of a retail bank.


“Multichannel support” means the bank permits a given transaction to be executed via more than one channel whereas a bank offering “fully fledged multichannel support” allows end-to-end execution of each and every transaction on each and every channel without forcing the customer to use a particular channel due to deficiencies in its internal systems. For example, if a prospective customer wants to open a checking account online, a bank providing fully fledged multichannel support would allow her to do so completely on its Internet Banking portal without compelling her to visit a branch. Likewise for other channels.

The degree of multichannel support offered by banks varies from product to product and from one bank to another. Let’s take the example of opening a checking account. Most banks in India only let prospective customers research products and download blank application forms online. Applications must be completed on paper and signed in wet-ink and the applicant must visit the branch in person to submit documents proving her identity and address. On the other hand, this bank in Australia lets its prospective customers research products on its new-generation website, complete forms online and insists on a branch visit only to verify the applicant’s identity. If we take mortgage applications as another example, most banks fare quite badly with multichannel support. As a friend was telling me recently, he visited the websites of more than five banks, all of whom promised online mortgage application. However, all of them stopped after the first screen displaying product details and asked him to submit his contact information so that someone from the bank could make contact with him in the next few days (Apparently, only one bank got back and, that too, after two weeks, but that’s another story).

Digital banking pundits are clamoring for banks to offer 100% multichannel support. In the case of checking acount opening, this would mean that the applicant visits the bank’s website, applies for a suitable product online, uploads scanned copies of her identity and address proof documents to the website, the bank verifies everything in realtime and issues an account number to the applicant within a few minutes. With the mortgage application, fully fledged multichannel support would result in the loan amount credited to the applicant’s account within a few minutes of applying for a suitable mortgage product. No branch visit is required in either case. Now, this is only a demonstration of fully fledged support of the online channel. To attain the mark of total multichannel support, the bank would have to deliver similar functionality over telephone, mobile and social media.

We believe that 100% multichannel support as described above is neither necessary nor practical.

In Part-2 of this blog post, we’ll explain why. Stay tuned!

Indian Education System for UK?

Thursday, October 6th, 2011

In my early blogging days, I’d written a blog post called Indian Education System is the Best … for India!

Despite realizing that my views on this subject were, ahem, somewhat contrarian, I didn’t hunker down in some dark corner. Instead, a couple of years ago, in another blog post, I’d wondered whether the much-maligned rote-learning method of Indian schools was what the doctor recommended for NYC’s schools. I wasn’t surprised to receive tons of brickbats from near and dear ever since, especially from friends and colleagues who’d recently relocated to India from the USA and had chosen to send their children to international schools despite the higher costs and longer commutes they entailed.

Now, after hearing about a recent HM Government’s plan and the deliberations among British public around its feasibility, I’m tempted to suggest that the Indian education system is ready for adoption by the UK as well. Before you start doubting my sanity and throw more brickbats at me, let me make my case.


The UK government has recently raised an e-petition to make financial education a compulsory part of the school curriculum. According to the petition, banks and financial services providers are spending “billions on marketing and teaching their staff to sell” loans, mortgages and an array of financial products, and it’s time British schools ensure, as part of “buyers’ training”, that “every child in the country gets a basic understanding of personal finance & consumer rights before leaving school”.

There’s a lot of debate in the British media about the pros and cons of imparting financial education in schools. This article on and the accompanying comments provide a comprehensive round-up of both sides of the story. Arguing in favor of the petition, a commenter who goes by the handle of WhosgotmyName says, “Until the government recognises that these esential (sic) skills should be part of the national curriculum, generations of consumers will continue to be vulnerable to everthing (sic) from dubious to outright illegal practices.” On the other hand, AndrewFSmith feels that “it is utterly wrong to take time out of the school curriculum whilst one in five of our teenagers leaves school without being able to read properly or do basic sums”.

Personally, I found the views of one Mike10613 to be the most sensible. Apart from suggesting that financial education should be “integrated into existing lessons” instead of being treated as a separate subject, Mike10613 predicts that it will “make learning arithmetic and maths more interesting”.

It struck me that this is probably what the Indian education system has already done when I had a casual look at some of daughter’s study material recently. Her Math text book for the eighth grade at an ICSE school in Pune, India, is full of problems around simple interest, compound interest, loan repayment schedules, and so on. For an assignment in Computers, she’d to include the revenues and profits of IBM, HP and other leading global IT companies.

I don’t remember getting this level of financial exposure even during my grad days, let alone eighth grade. Without attempting to make any claims to being young, I must note that the concepts of simple and compound interest existed back then and companies like IBM and HP were no strangers to the IT industry of that era either.

Having said that, it’s not that my daughter has a separate course called finance education or whatever. It’s just that the basic principles of finance seem to be nicely dovetailed into her existing courses. From personal experience, I can say that Mike10613’s is absolutely right when he predicts that this could make math more interesting.

Integrating finance education into the regular school curriculum is self-admittedly what the UK needs. It’s evident that the Indian school system has already done it.

I rest my case.