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The next step for Chinese banks

Albert Chan, managing director and Accenture’s banking industry lead in China | March 19, 2014
Chinese banks need to get more involved in customers' major economic decisions – from buying homes to a new car to retiring – or they risk being replaced by digital competitors, and relegated to a utility.

In the US, BBVA Compass provides its customers who are looking to purchase a new car with information on loans, insurance and the actual selling price of cars to help them negotiate the best deal.

These are the types of practical, valuable, digital service for significant life events that Chinese banks should pursue offering for their clients.

Trusted and Indispensable
Standard Chartered is on the right track. It has turned the disadvantage of restricted branch licensing in markets in Asia-Pacific into an advantage by leveraging digital channels to win customers. The bank launched "Breeze Living", a lifestyle smartphone app — available in Malaysia, Singapore, India, China Hong Kong and Korea - that offers open, social and location-based mobile discount coupons. According to the bank, more than 1 million users around the world have downloaded Breeze.

The bank positions the app as every bit a tool for better living. For example, last year, Standard Chartered Bank recruited two veteran mountaineers for an expedition to Mount Everest where the climbers tested the bank's Breeze mobile banking app at world-record setting altitudes. They conducted funds transfers at 6,500 metres and confirmed account balances at 8,000 metres - proving no place was too remote for mobile banking.

The next step, is to be able to apply for mortgages, set up retirement funds and make wealth management investment decisions via your mobile in China.

 Consumers expect more
In the digital world, customers are driving the changes - they want to decide how and when to do their banking. And they want it to be easier, take less time, because they know it is possible.  Within five years, at least three out of every four customer interactions with banks will be online or mobile. Less than 5 percent by some estimates will take place in branches. While banks will need to invest in this digital future, the payback is that it expands the customer relationship and reduces operating costs by automating systems and processes.

These are the sort of services that banks in China need to embrace as players from other industries increasingly use digital technology to move into financial services. In order to do this, China's banks will need to rethink their organisation, customer connectivity, analytics capability and IT agility to be able to compete in the digital era. If banks learn to use digital technology to help customers find deals and better manage their lives, they will not only transform the role they play but also assure their future.


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