Let me begin with a depositor’s plight who was denied access to her funds parked in a term deposit scheme at the time of urgency. She had to borrow money to meet her exigency despite having her own funds in the bank.
How come a bank can deny a depositor to access their money in the account? This is what you must be thinking right now. Actually, the depositor was away from home town. She had requested her bank to transfer the proceeds of her term deposit into her savings bank account as she needed the funds direly. The bank denied to oblige and insisted that surrendering the physical instrument of the term deposit was mandatory. Even as the depositor was ready to request for the same though her email or SMS as both email ID and mobile number were registered with the bank, the bank official bluntly refused. The Branch Manager expressed his helplessness as the concerned officer handling term deposit portfolio was not ready to execute the requested transaction in absence of the physical fixed deposit instrument.
Was not it possible for the bank to acceded to the request of the depositor? Yes, of course, the bank could have easily acceded to the customer’s request. But the bank official failed to leverage technology and asking for a physical instrument was meaningless when the depositor was going to send her request through registered email or through SMS.
Actually, these kind of incidents are a routine in the banking system. It’s not because the system is faulty, but the staff handling the system seems shaky to leverage technology to the benefit of their customers.
The rise of banking platforms loaded with state-of-the-art technology has raised the expectations of the customers. While promoting technology driven services, the banks while promising moon have presented themselves as a magical lamp, which just needs a wireless touch to get their choice of services.
Basically, digital banking is fast catching up as a norm after it got a push following demonetization of high value currency in November 2016. It gave opportunity to the banks to capitalize on the huge infrastructure which was already in place but was under-used, to promote their online services.
In the pre-demonetization era, the banks were having relevant technology in place to render digital services at large scale, but didn’t promote it at mass level. After computerization of banking operations which began in early nineties and later shifting to advanced platform of core banking solution, these banks were reluctantly allowing their customers to access to online services. Surprisingly, it was extended as a special favour to ‘favourite’ customers.
For example, despite instant ATM card facility in place, the account holders, especially the new account holders were denied the facility and asked to wait for the customized ATM card which would normally take two-three weeks time. In fact there was no emphasis to educate the customers about the e-services available at the banks’ digital platform.
Now, based on current trends, pursuing a strong digital platform is the only way for banks to fall in line with the changing behavior of customers who love to be online for most of the time. Otherwise, customer defection will be order of the day in such banks which fall short of expectation of their customers when it comes to the convenience of digital banking services. Here, the banks have to understand that there is disaggregation of the traditional banking value chain and it’s not only a product or a scheme which will entice customers, but delivering a differentiated customer service will alone excite customers. This way, they can retain old customers and also win the new ones.
There is one more important thing to remember. When we talk of digital services, the traditional rule book of rendering services to the customers becomes meaningless as the technology has placed bankers at a position where their on-the-spot ability to leverage technology matters. Poor ability means loss of customers’ trust, breeding disloyalty among customers and ultimately loss to the institution.
Meanwhile, when technology has made it possible for a customer to obtain loan through online mode, accessing to their term deposits without visiting the bank branch should not be an issue for the banks.
To conclude, let the bank staff at operational level understand that to neutralize the pressure from regulation, fintech competition, price war, commoditization, and new types of customers and usage, the only way is to reinvent themselves and face their digital transformation challenge.
(The views are of the author and not that of the institution he works for)