By Tarun Shukla
Global Delivery Process Leader – Banking & Collections
The banking landscape is changing across the globe. The run-up to 2020 will see innovative themes emerge, with banks’ growth governed by several key factors, including:
- Product penetration
- Creation of a new market of people with no bank account (known as “unbanked” customers) and those who do not use financial institutions to their full potential (the so-called “underbanked”)
- Digital wallet and payment banks such as PayPal, which accept limited deposits but don’t lend money
- Tight focus on regulatory and compliance aspects and cost reduction to meet the bottom line
- Finally, customer retention and product per customer will become the mantra
Indeed, the entire banking field is shifting its gravity and is acquiring a “new normal.” The business services industry will have to be a step ahead before this change hits them. We see five areas in which the organizations will have to act quickly:
- Scalability and flexibility: The banks’ collective challenge will be to accurately project volumes and growth, but their ability to do so in this changing environment has yet to be tested. The players will not only be required to have a global footprint but also nearshore operations. To some extent, a larger geographic spread will help combat this uncertainty. The industry’s current concentration is in India and the Philippines, but eventually we will see a much wider spread across the globe.
- Pricing models: Static pricing models like full-time equivalents, log-in hours and transactions need to be replaced by much more dynamic models. Clients are increasingly looking at partners who have “skin in the game” and are open to taking risks along with them.
- Innovative service delivery: The lines between customer segmentation will blur. Classifications like “high net worth,” “premium,” “gold” and “silver” will fall by the wayside. The world will move toward treating each customer as a segment. Customization at a customer level will become the key. The “new normal” will be differentiated customer experience in a de-segmented market.
- Bundled offering and embedded analytics: A menu-based rate card offering will eventually become a thing of the past. As the customer is becoming a segment in itself, the players cannot rely on services like contact center, back office, originations, etc., as an offering. This way each segment—i.e., the customer—will be serviced by multiple sets of people. The offering has to be bundled up with an analytics umbrella overarching that bundle. The new normal will be the value-based offer.
- Regulatory and compliance: Geographical boundaries have now become almost nonexistent from a banking standpoint, and the biggest threat is to prevent transactions crossing over the line of regulations and compliance. Till now the business services players were completely dependent on banks to manage this aspect. But now the intelligence and capability has to be developed by the players in-house. The new normal will be that the service providers should act as a consultant and gatekeeper for their banking clients.
Concentrix can help you navigate the “new normal.” Please get in touch with us.