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BPM In Retail Banking - Transforming Challenges To Opportunities

Retail banking, which is the face of banking for the general public, has experienced a drastic change with the advent of technology. Today’s customers expect highly personalized services and hassle-free banking experiences. Therefore, to keep up, the banking industry is facing disruptive and irreversible changes with fierce competition, dynamic technology, stringent regulatory framework, and consolidation.

No longer able to depend on the standard and dated processes, the banking industry understands the urgent need to improve customer experience with a uniform and hassle-free process for the complete lifecycle of the consumer.

While there is potential for phenomenal growth, the challenges in perfecting the retail banking experience is equally daunting.

Challenges in retail banking

Meeting escalating customer demands while staying within the stringent regulatory framework through a controlled process is just one of the challenges faced by retail banks today.

Listed below are some questions that banks need to address fast.

Is the business model customer-centric?

Meeting the changing, growing needs of the customer with the launch of new and improved products and services and providing end-to-end, prompt customer service are the biggest challenges the retail banking industry faces today.

Are the current business operations complicated?

If the coordination among different departments of retail banking is missing or complicated, the result may be inefficient business operations, low productivity, and delay in response.

Is information technology being leveraged to the maximum?

With the boom in technology, customers expect instant issue resolution. Hence, the finance sector need to leverage technologies such as cloud, IoT, and big data analytics for better customer experience.

Has human intervention in banking reduced?

Cumbersome processes and multiple points of agent intervention during approvals, application processing, and customer query resolution may add to customer dissatisfaction and increase the chances of errors.

Are customer acquisition and retention focused enough?

Customer acquisition is more expensive than customer retention. However, with intense competition, both retention and acquisition have become significant challenges.

Is the network management efficient?

Maintaining and optimizing a complex distributed network and applications can be challenging. Moreover, ensuring accuracy in account transactions, while managing data centers profitably, is a demanding activity.

Are there safeguards in place to prevent cybercrime?

The flip side of the growth of information technology in banking is cybercrime. Retail banks are constantly at risk from hackers who are after confidential customer information like credit and debit card details, internet banking credentials, or phone banking details. This risk makes it extremely important for banks to upgrade their internet security to safeguard customers’ data constantly.

It is to combat these challenges, and in pursuit of higher flexibility, that banking decision makers are shifting to outsourcing. BPM (business process management) for retail banking operations ensures improvement in cross-selling or up-selling, enhances customer experience, simplifies retail banking solutions, and helps with staff assimilation post acquisitions.

Advantages of BPM in retail banking

Business process management of retail banking platforms has emerged as a critical service to achieve operational efficiency through process management and functional integration.

The benefits of outsourcing retail banking include the following.

Standardized processes

Regulatory authorities across the globe have laid out stringent rules that require retail banks to ensure efficient risk management, compliance, and controlled and consistent processes across geographies. Manual standardization of processes is cumbersome and expensive, whereas retail banking outsourcing can be a cost-effective alternative.

Quick launch of new products

The changes in customer expectations have to be met quickly and effectively to stay relevant. However, the traditional approach takes longer to launch and market a product and provide end-to-end services. Outsourcing ensures optimized product introduction across all branches, costing considerably less in terms of time, money, and effort.

Automation of banking processes

With the onset of technologies like cloud, social media, analytics, and mobility, the retail customer expects quick action and error-free service. This is achievable through automation of the redundant processes.

Data integration and collaboration

Different departments are involved in dealing with a particular customer requirement. These departments work independently and manage their own process, systems, and data, giving rise to errors and redundancy. However, at present, the retail banking strategy must work towards the integration and collaboration of various operations to reduce the turnaround time.

Data security and privacy

Cyber threats are becoming sophisticated in posing a higher risk of data theft. To combat this challenge, there is a pressing need to upgrade the security system and implement an intelligent and robust process to offer end-to-end, foolproof security.

Transparency and better decision making

All the business processes can be streamlined and automated with a centralized view of the activities and responsibilities of each department. Increased operational transparency leads to streamlining processes and enhancing customer satisfaction.

The banking industry should leverage business process management (BPM) to make retail banking more customer-centric and their operational processes more objective and efficient. With retail banking outsourcing, banks can quickly gain control and visibility of their critical processes, improve employee performance and productivity, and eliminate errors - leading to fast customer responses, the holy grail of service.