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Study finds banks not ready for consumer demand

Veronica C. Silva | July 3, 2012
Banks in SEA are aware of potentials of multi-channel service and product offerings yet not too many are taking advantage of opportunities.

Banks may be one of the oldest institutions in today's society. Unfortunately, they have yet to catch up to meet their consumers' demands, according to a study of banks' readiness to meet retail consumers' demands.

The study made up of two surveys was conducted by banking solution provider SunGard in cooperation with Celent, a research and consulting firm focused on the application of information technology in the global financial services industry. The study, titled "The Bank Readiness Index"  involved more than 1,000 consumers and 100 banks in the Middle East and Southeast Asia.

Among Southeast Asian respondents, the study revealed that while most consumers are prolific on online and mobile banking use, banks in the region are not yet offering fully-integrated multi-channel customer experience.

Only 23 percent of banks surveyed are providing personalised services to their customers even though 76 percent of respondents agree that innovations in the mobility and digital space are key opportunities to provide personalised services and products. Only 34 percent of banks in Southeast Asia are offering banking services using tablets and their mobile banking offerings are still basic. Sixty-three percent of banks in Asia are even offering native banking apps for Android and iPhone devices.


"Although those Southeast Asian banks involved in this survey understood the importance of the four focus areas of this survey (multichannel, mobility, social media, and customer metrics), they don't currently possess the operational ability to cater for customer requirements in these areas," said Dean Yong, vice president, product management, SunGard's Banking Business.

Instead, banks are still focused on risks and credit while coping with rapid technology advances, Yong added. "The four Southeast Asian countries surveyed showed different strengths relative to each other in these four areas, but are only starting out on the transition to a completely integrated customer interaction model that ties these areas together and provides a seamless experience across all delivery channels."

Banks are also not keeping up with social media developments. The study noted that banks are not engaged in social media despite the high usage in Facebook. They are also not making two-way communication with their customers as social media is used mainly for outbound marketing.

Still, there is a silver lining in this technological backwardness.

Silver lining

"Within Southeast Asia, banks are not yet saturated and ample growth is still available, so being a laggard in these future trend areas has not had a dramatic impact to date," said Yong. But the customers who are demanding some of the latest channels to enhance their experience with the bank are those which ring in more profits for the bank, he added.

"These consumers' expectations around service, access convenience (mobility), and functionality are being set by non-banking industries, but rapidly becoming the norm for consumer interaction, and spreading to other more general segments of the banking market. The good news is that this advance in technology has also enabled banks to have quick wins with focused incremental deployments that start to deliver on the promise, without adding to the chaos of the disparate legacy systems that are most banks inherited starting position," said Yong.

The Bank Readiness Index study was undertaken from March to April 2012. For the Southeast Asian region, the banks involved in the study are from Indonesia, Malaysia, Philippines and Thailand.


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