INNOVATION IN MULTI –CHANNEL RETAIL BANKING
Bank wins or loses customers
Worked :
October 2012
Gentiana Gjino
Raiffeisen Bank, Albania
Orkida ILollari (Findiku)
Raiffeisen Bank, Albania
INNOVATION IN MULTI –CHANNEL RETAIL BANKING
Bank wins or loses customers
• New technologies are changing the functionality of society and its various
components: from one person to multinational companies
• Should not be surprised that in such situations banks can be found weak, but
there is no enough time to recover, is precisely in these moments that plan
strategies should be done whom will define the future, "Customer oriented".
• The real cause of this debacle can be summarized in a letter:
"E", Electronic.
• For the bank to win or lose customers is faster than in the past, the products are
levied by type "pull".
• It is important to understand the characteristics of this new financial world, and thus
define policies and strategies to adapt the structure of the bank in its entirety, but
with special care not to see these changes as an actual trend but as the foundations
to build the bank of the future
Towards this horizon should see banks today.
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Purposes
Purpose is finding a bank model being able to compete successfully in
a market where socio-economic and technological factors have brought
a major change in how banks operate
• It will also examine various electronic channels, such as physical and
virtual
•
•
•
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Branches
Internet banking
Mobile banking
Phone / SMS banking
• ATM
• POS, etc.
Electronic money cannot replace completely the traditional money/cash.
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Innovation and its importance
Innovation is the process of transforming the new ideas into
values
There are several ways of conceiving the innovation which the future has called them as
"the eight angels of innovation" and which are:
New products and services,
New business models
New "Brand" Experiences
New partnership strategies
New distribution channels
New client segments
New communication channels,
New processes
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Innovation in banking system
Banks are guided by the philosophy of continuous change through investments in the
increase of banking service quality, improvement of technology and human resources,
increasing of product gamma via a differentiated price.
 The logic of alternative channels is the triumph of the new economy paradigm and of the
technology information, able to link different economic actors in new ways, reducing space
and time distances
"Multi channel" integration helps banks to gain competitive advantage through rapid
development of innovative products, enhancing customer experiences by responding to
consumer demands in a uniform way through a delivery channel and increasing benefits
through "Cross Sell".
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Bank Types in the world
Internet banking banks types:
1. Information banks or marketing website
- they are used only for marketing information , the products and the offered services
- this is a basic information about loans and deposits
- risk is relatively low
2. Communication Bank website
- users can get different information and they are allowed to send a "feedback“
- The risk is relatively low
- They should be vigilant and continually check to monitor
3. Transactional website Banks
- Clients can make transactions with their accounts in real time
- Customers may update or modify account information
- Clients can make payments to third parties in and out of the bank
- These banks are exposed to a higher risk , they must have very strong monitoring systems
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Bank Types in the world
1. Banks “bricks and mortar” type
- they are ordinary banks
- they do not offer e-banking services but rely only on their branches (physical branch)
to deliver their services.
2.
Virtual banks
-they are banks without physical location/branches, but offer their services to clients
only through e-banking.
3.
Banks “Brick to click"
-When a traditional bank "brick and mortar "starts offering its services through
e-banking for its customers, then it is called “brick and click".
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Advantages of alternative channels (e-banking)
The challenge of banking industry is the designation of new channels for offering
banking services.
Alternative channels fulfill many functions of the relationship between bank and
customer
From customer perspective:
• Convenience:.
• Located everywhere
• Faster transactions:
• Efficiency:
• Effectively:
From bank perspective:
• Control and costs reduction:.
• Reduction of the administrative work and
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Disadvantages of alternative channels (e-banking)
Besides the costs that should be covered, there are also some
disadvantages or drawbacks:
• Starting the service may require some time:
• The learning curve:
• Technical problems:
• Lack of personal interaction
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Virtual banks and their role in world
Click only BANK has not been widely used
These banks may not immediately become completely virtual. Click only.
This change must be in fact a gradual change. They must pass through intermediate stages for
various reasons:
• have neither the resources nor technological capabilities for the change; and if even so, the
market may not be ready to embrace the change;
• rigidity in terms of labour laws makes it difficult reorganization of human resources
The virtual bank has a target of four items, to allow the client to
meet his expectations, grouping them under the notion of 4 E-s:
• Everything:
the opportunity to access a huge range of products
• Every time:
opportunity to access 365 days a year, 24 hours 24
• Everywhere:
possibility to enter the bank from any location
• Everyway:
opportunity to access to services through the appropriate vehicle
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Conclusions
 The technology has become important components of banking institutions.
 The banks can’t function alone in terms of work and number of counters, but they
need to strengthen their distribution activities through electronic channels where
the main goal is to fulfill customer requirements.
 This thesis emphasizes the idea that the winning model for banks is more
diversity of integrated channels, including physical and virtual channels
coordinated among themselves and not the pure virtually
 It is very dangerous to turn exclusively only on one channel, even if it comes to
the Internet
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Conclusions
 The banks must therefore provide the opportunity to the clients to choose how to
reach electronic channels. Afterwards, it will be the client that will make a kind of
natural selection, by preferring one channel more than the other.
 It is important that it is not be bank the first to make this choice.
 E-banking has certainly brought about an evolution in the banking system, by
'establishing' a bank branch in everyone's home and is destined to develop
further. However, these recent years show that online banking services, even in
future, will have an additional role of the traditional ones.
Raiffeisen Bank Albania, U&A Qualitative Topline Report
Raiffeisen Bank Albania, U&A Qualitative Topline Report