Self-Service – A win:win for customers and banks

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Self-Service – A win:win for customers and banks

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Today’s customers are technologically savvy, digitally connected and seek personalized service with clear expectations. They believe that they should be able to do things their own way, with their own devices and at a time and a place of their choice. Self-service – originally designed to reduce costs by enabling customers to help themselves – has evolved. With the rapid advancements in mobile technology and easy access to high speed internet, the definition and scope of self-service has evolved into ‘Do It Yourself Digital Banking’. Every day, we see new capabilities being offered via self-service and customer demand keeps growing for more and more. From travel to hotel booking, online shopping to furniture designing, self-service has transformed the way we consume countless services. This trend has rapidly swept across industries and in fact, it is now being used by new industry entrants as a key differentiator.


Until reasonably recently, virtually all transactions in banking were handled manually, so it is little wonder that self-service represents a tremendous opportunity for banking and financial services. As per a report by Citi Research, investments in FinTechs have grown tremendously in the past decade — rising from $1.8 billion in 2010 to $19 billion in 2015 — with over 70% of this investment focusing on the ‘last mile’ of user experience in the consumer space. Regional variations exist, for example a report by Bain indicates that Australian consumers are leading the world in their use of mobile banking and are less likely to visit a branch than customers in other countries. Banks are working harder to move low value customer interactions out of the branches and put them into customers’ hands. The number of bank branches in the US has reduced by 1,614 in one year, as consumers are adopting digitized self service banking. Today’s bank branches in the US have fewer staff, from 13 full-time employees per branch in 2004 to fewer than six. In India, the value of mobile banking transactions increased 400% from December 2014 to December 2015. 


Despite all the noise around mobile banking, a report by the US Federal Reserve 2015 indicates that the penetration of mobile banking among the smartphone users stood at only 52% indicating a large untapped opportunity. Interestingly, 22% of the users with mobile phones indicated that they didn’t even know if their bank was offering mobile banking. Among those not using mobile banking, almost 73% people did not see a valid reason for using mobile banking. The reasons for self-service not reaching its full potential include lack of awareness, poor interface design, limited capabilities and a lack of seamless transition across channels.


Banks need to deliver something that is easy to use, addresses customers’ needs, establishes a personal relationship, puts power in customers’ hands and above all, creates value for customers. This shift from ‘bank focus’ to ‘digital oriented customer focus’, can make a huge difference in increasing customer adoption, and should be used to ‘pull customers to service’ rather than ‘pushing customers to use the service’ by making alternatives less convenient, unavailable or too costly. It is equally important to keep enhancing the service regularly, based on the feedback received. Also, it has to be well integrated into the bank’s overall end to end digitization strategy. An omni-channel strategy promoting digitized self-service, accompanied by a resized and repurposed branch network, is the winning solution for banks over the next decade.


In the traditional approach it takes a long time to get a home loan – a long, frustrating and worrying time for customers. However it doesn’t have to be this way. In the US, Quicken Loans, the third-largest mortgage lender by market share, now allows users to refinance or purchase a home in as little as eight minutes with a self-service website. The process automatically collects pay and credit information and requires minimal typing by the user, letting them sign their name right from their mobile device. In an age where customers are used to real-time transparency on just about everything via mobile, it is critical to provide customers with information about the status of a loan application or what other documents are required. 


It is a logical step forward for banks to allow customers to view pre-approved loan offers, select the best offer and submit the loan application on mobile in minutes without even visiting the bank branch. Real time tracking through the approval and disbursement stages can go a long way in re-enforcing customer trust. Once the positive experience and engagement has been established it must be carried through the entire loan lifecycle i.e. during servicing and collections. Moving customers to self-service channels not only enhances operational efficiency but it also frees staff to engage in more value adding activities. Banks that are able to effectively engage customers with self-service are often among those with the highest rates of loyalty and customer satisfaction. Researchers have already established that moving transactions to self-service channels can offer up to 43X reduction in cost per transaction.


As shown in this short video, today’s advanced technology solutions are capable of doing this and much more. As customer expectations continue to evolve it is imperative for banks to incorporate self-service as an integral part of their digital transformation journey and offer best in class experience to their customers. Self-service capabilities are a perfect example of the win:win benefits that technology advancement brings for banks and customers.


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About the Author

Nitin Garg, Associate Vice President, Global Marketing, Nucleus Software

Nitin Garg is the Associate Vice President, Global Marketing at Nucleus Software where he is responsible for driving strategic marketing initiatives to support Nucleus in digital transformation of the Retail and Corporate Banking segment. He carries a deep passion for technology based innovation and enjoys being an enabler for realization of its true worth across the entire financial services industry value chain. Nitin brings over 16 years’ experience covering marketing, business development, delivery management and technical operations across diverse industries. His key focus areas include customer success, brand perception and technology leadership. Nitin has a Post Graduate Diploma in Management from IIM Calcutta and Bachelor’s Degree in Marine Engineering.

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About Nucleus

At Nucleus Software we are committed to providing efficient, modern yet proven software solutions for the global Banking and Financial Service industry. We have been pioneers in developing Retail Banking Software, Corporate Banking Solutions, Transaction Banking, Cash Management and Internet Banking Software since 1986. Our success spreads across more than 50 countries, and we serve our customers globally through our direct and partner operations across US, Europe, Asia-Pacific, Africa and the Middle East. We are known for our world-class expertise and innovation in lending and transaction banking technology. Our two flagship products, built on the latest technology are: FinnOne™ and FinnAxia™.