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Looking out over the edge of a cliff. That’s what it feels like to be a retail banker these days.

/wp-content/uploads/2013/06/bank_236421.jpgBankers see e-banking providers like Google Wallet and PayPal eating into their core banking business. Retail banks could fight back by becoming one-stop shops for all things financial – if it weren’t for decades-old technology and business processes that are hard-wired into individual product silos. (Read more of my comments on how retail banks can attack the channel integration challenge in an interview, along with SAP banking expert Grace Bormann and IDC Financial Insights Research Director Marc DeCastro.)

Retail banks need three things to move forward: a vision for making banking more compelling to customers, a strong case for massive change, and an integrated customer experience.

#1 Define the Vision

The vision defines who the banks’ customers are and should be. The products and services that are most important to generating business value for customers should drive the transformation. Without a strong vision, the transformation will be seen as an IT project, one that’s too expensive to risk the business on.

#2 Develop a Story

To get buy-in for the transformation, retail banks must build a compelling, easy-to-understand narrative that tells employees and customers alike why the bank must change. Banks have traditionally responded incrementally to a series of must-haves, such as ATMs and online and mobile banking. This is why having a narrative is so important now. Once a bank constructs a story based on how customers want to interact with the bank, it’s forced to rethink all of its channels. That in turn provides the strategic and economic drivers for core transformation.

#3 Create a Customer-Centric Experience

What do a customer-centric vision and narrative mean in reality? At a customer-focused bank:


  • Approvals don’t take weeks. Someone who applies for a loan, whether at a branch on online, doesn’t have to wait days or weeks to get that loan approved, because the bank can run a risk analysis instantly;
  • Settlements don’t lag transactions. A person who makes a deposit at an ATM during his lunch hour can see it reflected in his account that evening when he’s paying bills on his smartphone.
  • The bank really does know your name. When a customer makes an appointment with an investment advisor to discuss retirement savings, the advisor can access a complete account history to develop suitable recommendations. Having a consistent 360 degree view of their customers at any point of time enables banks to make real-time offers, says Falk Rieker, Global Vice President, Global IBU Head of Banking, SAP. (Watch more of Rieker’s comments from a 3-minute video here).

Creating more customer-focused business processes make it possible not only to deliver products and services more effectively, they also enable banks to tackle new market opportunities quickly. When Standard Bank of South Africa saw a competitor signing up unbanked or underbanked customers, it devised an banking process for opening accounts using mobile devices. The process makes it easy for people who live far outside of cities – and far from an ATM or branch office – to save money and make common transactions.


The e-banking challenge is not easy. But it becomes easier when you have a vision and a story for why it must be done. There’s money on the table for banks that can make the necessary transformation to customer centricity.

What’s holding your bank back from having an integrated e-banking face to the customer?

Learn more about how to become a customer-centric bank by reading the white paper How to Make Consumers Love Their Banks.

This story originally appeared on Banking View from SAP.

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  1. Ramesh Ramakrishnan

    Nice note Jesper

    From a pure experience perspective, the differentiation between retail banks is just not there anymore. With each customer having more than 1 bank account, they can easily compare and move funds to another account and carry out transactions if the other bank offers better service experience, problem resolution.

    I’ve seen banks getting stuck because of their current legacy systems and business processes and trying to make baby steps, and then there are other established banks that are trying to build new generation solutions from ground up just like any new start-up bank would do, then switch over when the time is right.

    Unfortunately in the 21st century, competitive analysis is not only about comparing with banks of similar size or medium size etc, its also about start-ups or cross-industry players, as they don’t have the baggage of current banks and the market-entry barriers are not the same anymore.

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