Indian banks need to scale-up IoE-enhanced digitized services: Cisco Study

BENGALURU: A study conducted by Cisco has revealed that there is a gap between digital consumer behavior and bank delivery. The India findings from its global study of more than 7,000 consumers in 12 countries revealed a significant ‘value gap’ between the banking services that today’s digital consumers demand and what banks currently provide.

The study indicates that Indian consumers have been adopting technology at a blazing rate but don’t feel their primary banks provide the relevant, convenient services they value. Almost all the Indian respondents (97%) agreed that they would move their money to a different financial institution for personalized, Internet of Everything (IoE)-enhanced services such as mobile payments, branch recognition, virtual financial and mortgage advice, and automated financial advice.

The data demonstrates a growing gap between what banks offer and what consumers demand; 46% of Indian consumers believe that their primary bank doesn’t understand their individual needs. Almost three-quarters of the respondents (72%) indicated that they would open an account at a different bank that offered the specific branch recognition services they sought. And nearly a third (30%) revealed that they plan to shop for their next product or service at a different bank.

It is clear that despite having customer and transactional data, banks have not leveraged it to its fullest potential. These actionable customer insights would help them enable the personalized digital services that are demanded of them. The study indicated strong consumer interest in key IoE-enabled services that closely align with banks’ core strengths of physical branches, financial expertise and rich customer data; using digitization to leverage these will help banks transform themselves for next-gen customer services.

Upside for Banks: Benefits of a Digital Revamp

Cisco observed that financial services institutions have an enormous opportunity for growth when they keep up or stay ahead of their digitized customers, in and beyond their physical branch. The research findings indicate that consumers from all age groups respond to technology offerings from financial institutions, specifically personalized ones that enable them to have a relevant and convenient banking relationship. The study focused on evaluating the demand for five key digital technologies: virtual financial advice, virtual mortgage advice, automated investment advice, branch recognition, and mobile payments.

The study, supported by interviews with industry thought leaders, shows there is a significant opportunity for retail financial services institutions to evolve to an IoE-driven digital business model that would help reduce attrition and increase customer share by utilizing the Internet of Everything to provide the following services:

• 74 percent of respondents indicated that they would move at least a portion of their savings and investments to a financial services organization offering an automated advisory platform
• 61 percent of respondents would move money for a screen-to-screen advice service, either in the bank or on a personal mobile device. 84 percent of customers would op en an account to get access to mobile payment services.

The Digital Consumer’s Appetite for IoE-Enabled Services

Automated or video-based mortgage and financial advice: Cisco has observed that regardless of the mode of delivery, customers want the ability to chat with a trusted adviser, but the experience and relationship must feel like an in-person interaction. 74% of respondents were willing to move money for automated advice, 61% for video advisory. In total, 91% would be willing to move money for automated or video advisory services.

Mobile Payments:

• 56% of respondents would use secure mobile payment apps;
• 84% would open an account to access mobile payment services

Cisco observed that the top factors that influence consumers to use a mobile payment system include: Secure, Ease of use, and Integrated with my bank’s mobile banking app.

Addressing Security Concerns to Assure the Digital Consumer:

Cisco indicated that while new interaction models can help drive opportunity for financial institutions they must deploy the models securely to engage the digital consumer. Although consumers are overwhelmingly pushing their adoption of new technologies, security remains their primary concern with new interaction models. 73% of respondents are more likely to use Internet banking if they are confident that it is secure and 61% of respondents are more likely to use a mobile banking app that they are confident is secure.

Commenting about the study, Arindam Mukherjee, Vertical Head, Banking & Financial Services, Cisco India & SAARC, said, “The Indian consumers have adopted technology and have made clear their demand for personalized digitized services. Banks who respond rapidly and deploy IoE-enabled mobility and automated payment, branch recognition and advisory services and use analytics to keep pace with their customers’ needs are the ones that will thrive in this highly competitive financial sector. A high-speed intelligent network along with a cloud-based platform eases the transition to a digital model and enables banks to seamlessly upgrade and deploy a far more relevant and personalized experience to their customers.”