Despite the atmosphere of crisis on the international financial markets, Retail Banking – banking services to private clients – once again proved its resilience. At no point during the last fiscal year was there any significant impact from the international financial crisis on willingness to invest – either within the established markets in terms of investment in performance measures or within the emerging markets, where banks continued to expand their branch networks and other sales channels (Glossary) .
Market research firm Pierre Audoin Consultants (PAC) conducted a survey to identify a number of developments such as the medium-term trend in global spending on IT for banks’ various sales channels (self-service, branches, call centers, mobile, Internet, other). According to the results, between 2008 and 2011 worldwide investment in hardware is set to rise by an average of roughly 6% p.a. With regard to software and services, PAC anticipates global investment across the different sales channels to grow by 7% p.a.
Another study presented in the Capgemini “World Retail Banking Report 2007” shows that growth is the most common priority of the retail banks surveyed (40%), followed by service optimization (24%) and cost reduction (14%). Retail banks also pointed to sales optimization as the most important factor in achieving growth. Here, as well as customer acquisition and retention, the crucial factors are improved operational control and greater customer focus in front- and back-office business processes. “Industrialization” of the financial services industry is also given high priority, and in this regard the more widespread use of IT in process optimization and automation is expected to lead to further efficiency gains.
Wincor Nixdorf’s own growth strategies are in line with the developments and forecasts described by trend and market researchers.
Branch Operations Maintain High Priority.
Despite the increasing importance of other sales channels, branches, which act as the banks’ personal customer interface, remain their most important point of contact and sales channel. Especially in established markets such as Germany, Europe and North America, the banks continue to invest in the expansion and modernization of their branch networks. This is where efforts to retain existing customers and attract new ones are concentrated. The overriding objectives are to boost sales performance and enhance processes. Alongside these, mall concepts, multipurpose branches, pure consultancy branches and exclusive target group branches (specialized banking facilities for senior citizens, young people, etc.) are being tested as a means of boosting customer retention and positioning customer-specific services. In many emerging countries, the retail banks are expanding their presence both through their branches and through new self-service products.
Greater Importance Attached to Multichannel (Glossary) Selling.
Communications media such as the Internet and the cell phone have changed the behavior of bank customers, who are now much more price-sensitive, flexible and better informed. They make use of their freedom to choose the best deal from among the wide range of offers available. The banks are responding by developing the best possible strategic mix of sales channels, making their products available through a range of such channels and adapting them to suit each one.
For the IT industry, the challenge is to transform customer data across the different channels and the processes themselves into useful information, and to give permanent access to that information.
Further Advances in Automation.
The retail banks are increasingly moving over to automated processes. First and foremost, this helps to speed up the service provided to customers, e.g., when processing requests; at the same time, however, the banks are automating standard processes as a means of exploiting further potential for rationalization.
Trends in Self-service: New Services and Advertising.
Banks all around the world are turning to self-service technology. As well as automating standard transactions such as deposits and withdrawals, they are increasingly improving the efficiency of their existing self-service networks by implementing new products and services. In many countries, for example, bank customers can now use ATMs to buy tickets for events, pay bills and deposit cash or checks. More and more, self-service systems (Glossary) are also being used for advertising purposes. In conjunction with Customer Relationship Management (CRM) (Glossary) systems, such advertising can even be customized to appeal to individual target groups.
Cost Pressure, Takeovers and Mergers leading to Standardization of IT Infrastructures.
IT infrastructures can be expensive to maintain, especially when they are based on proprietary software solutions (Glossary) . For this reason, banks are increasingly making use of service-oriented software architectures that can be implemented throughout the organization. In terms of cost, these are proving to be a more appropriate response to the challenges created by the constant updating and expansion of sales channels and functions. Such architectures also help to reduce complexity in relation to internationalization projects and the bank takeovers and mergers that have become more frequent, especially in the wake of the financial and banking crisis.
Out-tasking and Outsourcing (Glossary) .
Many banks are shifting the management and operation of their installed IT infrastructure to external service providers in order to concentrate fully on their core business and reduce operating costs. This is also increasingly the case for retail banks, which are handing over tasks such as the running of their self-service systems or branch IT operations to outside providers.
