Tag: Electronic Statements


Know Your Customer and Minimize Business Risks

In order to curb crimes like money laundering, financing of terrorist activities and identity theft, the Reserve Bank of India (RBI) has been regularly issuing guidelines on KYC (Know your Customer). In 2002 the RBI directed all banks and financial institutions to put in place a policy framework to know their customers before opening any account. In November 2004, the RBI again issued a comprehensive guideline reiterating the objective of KYC guidelines to prevent banks from being used for money laundering activities or for the financing of terrorism.

KYC, which is basically a client identification process, ensures that the bank or financial institution is completely satisfied with the integrity of an investor. Banks today, are faced with increased challenges due to the evolution of money laundering methods, with launderers using sophisticated technologies for financial frauds. This has brought the need for enforcement of the KYC imperative to the forefront, and regulators other than RBI have also understood the importance of making KYC mandatory. The Securities and Exchange Board of India (SEBI) has implemented KYC for mutual funds and trading accounts, while the Insurance Regulatory Development Authority (IRDA) has mandated it for buying insurance and the Forwards Markets & Commission (FMC) for commodity trading.

However, the documentation hassles involved in KYC implementation have had a negative impact on the growth of number of investors. It becomes frustrating for the customers as well as for the financial organizations to adhere to the complex KYC requirements. For this reason, banks and financial institutions are now looking at implementing a more strategic approach to KYC compliance.

KYC, being a key regulatory requirement for all financial institutions across the globe, can be viewed as an opportunity to minimize business risks. Financial institutions need an appropriate solution to integrate the KYC process with their existing customer onboarding process, to ensure faster customer onboarding and minimize business risk by providing a 360 degree view of customer behavior. An important offshoot of the KYC process is deeper customer understanding through customer analytics, further enabling effective cross-selling and up-selling.


Customer Communication Management (CCM) – Bridging the divide between the customer and the banker

The world over, Banks and Financial institutions are facing a tough economic climate. It is only natural that they are looking for ways to increase their business and without the burden of incurring costs. There is a need to be more innovative and Banks and FIs today realize that it is critical to effectively communicate with customers and deliver superior service, improve efficiency and reduce costs. In this light, maximizing the effectiveness of daily communications such as bills, statements and correspondence is becoming a top priority. This also means improving customer interactions in a consistent manner across a wide spectrum of customer touch points and media channels.

The 21st century is being annunciated as the information economy, wherein knowledge is power. The more knowledge and information banks have at their disposal, the more prepared and equipped they will be to handle the complexities and uncertainties of the economic ecosystem. So how is this unassailable knowledge extracted?

From customers of course!

The easier banks make it for customers to do business with them, the better it is, to gain an understanding of customer needs and the easier it becomes to enhance their relationship with them. The challenges that retail banks face today will not evaporate overnight. Banks will continue to face reduced marketing budgets, increased regulatory and compliance issues, ever demanding consumers and a diffident economy.

It is natural, in volatile times, for businesses to undertake serious self-introspection. The current economic gloom therefore throws up some intimidating questions:

  • With budgets shrinking, how do banks and FIs meet all their regulatory obligations for communicating with customers and still improve and grow their customer relationships?
  • How do banks capitalize on each opportunity to communicate while satisfying their customers’ needs to be acknowledged and valued?
  • How can the wide assortment of data about customers be leveraged so as to provide a personalized, compelling and consistent series of communications that benefit the customer and at the same time, grow the revenue derived from them?
  • How can banks improve the effectiveness of their communication channels and also propagate more environmentally friendly ways of communicating and fulfill their corporate social responsibility?

The questions are compelling but their answer lies in one comprehensive solution. The answer is Customer Communication Management (CCM). CCM simply means enhancing customer experience in a cost-effective manner by communicating and engaging with customers through a multitude of channels and mediums. CCM enables banks to connect with their customers by providing them with personal and immediate attention. CCM also ensures that banks have better control over their communications, provide an opportunity to cross-sell and up-sell their services while also keeping their operations profitable.


Co-Create Products and Services with Customers Using a Robust CCM Solution

Today’s customer is more informed than ever – and more astute in making purchase decisions. Effective customer communication can act as a catalyst for companies to create greater organizational efficiency while optimizing the profit potential of every touch point with the customer. Businesses need to realize the importance of customers’ data as a reflection of customers’ voice, and initiate the first step in giving voice to the customer by incorporating a timely and effective communication strategy. For an organization to achieve this, a robust Customer Communication Management (CCM) strategy – offering full functionality required to deliver on all aspects customer communication – is an absolute must.

Timely, personal, relevant and compelling communication is critical to building trusted and long-term customer relationships — this should be a given. However, organizations still struggle to manage and deliver consistent and cost-effective communications across today’s multitude of communication channels. The chances of cross-selling or up-selling are dramatically dropped if there is a gap between the customer’s requirements and the offer made to him.  Distribution to multiple output channels like print, email and web presentment is challenging due to high turn-around-times for replicating changes and absence of versioning. Dependency on vendors/ IT experts for performing minor changes, like templates, business rules and workflow — things that should be in the hands of the business, not IT, leads to escalated costs and unnecessary delay in communication. Another major challenge lies in enforcing branding guidelines like font style and background to ensure consistency across all customer communication for brand recognition.

Inconsistent and irrelevant communication may have serious implications for any business. The solution lies in co-creating products and services with customers by intelligently using customer data to create personalized and targeted communication. In today’s “connected” consumer-centric world it has become imperative for businesses to adopt new channels to engage and stay in tune with customers’ needs, demands and expectations. To be able to up-sell and cross-sell effectively, businesses must monitor customer data in real-time to enable need-based targeting. CCM harnesses the power of existing Customer Relationship Management (CRM) and transaction data to ensure that the on-going communications are highly personalized and relevant.


Understanding the Basics of Customer Communication Management

With an explosion in new communication channels, businesses are faced with the challenge of ensuring clarity and consistency across all customer communications. The very definition of “customer communication” has expanded manifolds to include everything from billing to direct mail marketing to e-marketing to electronic bill presentment and so on. Banks and Financial Institutions have always been the leaders in setting high standards for customer expectations by continuously enhancing customer experience. The result is that high-touch, 24/7 service across multiple channels is no more representative of customer delight but has become a basic requirement for keeping customers happy and loyal in real time.

To survive in a competitive market place it is necessary to effectively manage all customer communications. Reduced customer acquisition costs, increased client retention and maximized lifetime value of each customer are the end objectives of every communication strategy. Customer Communication Management (CCM) refers to a convergent set of Information Technology solutions that help businesses achieve these objectives by providing a tool to advance the way they communicate with their customers. CCM takes care of every aspect of customer communication – including content creation, personalization, and multi-channel distribution and archiving using a single integrated solution. Dependency on vendors/ IT experts for performing minor changes on different systems leads to escalated costs and unnecessary wastage of time. CCM tools overcome this challenge by empowering business users to create and manage customer communications, reducing the reliance on costly IT resources.

Data-rich industries such as banks process volumes of transactional documents daily. Each such document is an opportunity for revenue realization. CCM treats these transactional documents like bank statements, statement of account, invoices etc. as marketing collaterals to promote company offerings to customers.

A properly implemented CCM solution can bring significant benefits to organizations. Let’s take a look at the advantages that a CCM or Customer Communication Management solution can bring.

  1. Better execution of multi-channel campaigns ensuring consistency and clarity across all channels
  2. Automation of the creation and delivery of well-designed, highly personalized communications
  3. Easy change management by incorporating version control mechanism
  4. The ability to focus on the specific requirements of every individual customer to deliver more relevant and meaningful communications to customers
  5. Integration of intelligent enterprise data into transactional communications enabling responsive and agile marketing for better up-selling and cross-selling
  6. Better visibility and control over your communications to help your business operate profitably
  7. Reduced dependency on IT experts for performing minor changes
  8. Regulatory compliance
  9. Better up-selling and cross selling

From Customer Churn to Customer Advocacy

Going by the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study the overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale. The research has drawn a direct correlation between customer satisfaction and customer loyalty. As the US retail banking industry struggles to adjust to the changes in the global financial and economic environment, the focus on customer loyalty to protect revenue and ensure the continuation of the most important customer relationships is of utmost importance to banks. Increased customer awareness about financial products, demand for better customer experience and growing customer attrition mean banks have much to lose if they fail to align their communication strategies with customer expectations and focus on retaining existing relationships.

The study has further identified 12 core Key Performance Indicators (KPI’s) of customer satisfaction that focus on three key objectives: managing customer expectations; effective customer communications; and providing convenient and flexible service.

Capturing customer interest on various promotions for lead generation can be a daunting task if you don’t have an efficient communication strategy in place. Effective customer communication has the potential not only to enable banks realize customer loyalty but to deliver customer advocacy by making the best use of myriad customer touch points as marketing opportunities.

With formidable competition to fulfill customer demands, banks must take radical steps to maximize the use of various communication tools. Transaction documents should be treated like personalized marketing collaterals targeting the right offer to the right customer on the basis of analysis of transaction.  For instance, a bank account statement may include details of an investment option or a credit card statement may be personalized with invitation to open a new bank account. Or if a customer uses his credit card/bank account to make utility bill payments you may introduce him to automatic utility bill payment service. When looking at managing cross channel communication between a business entity and its customers, an interactive customer communication management system is an intelligent proposition to bank on.


EMEA Banking Industry – Consumer Mistrust Calls for Enhanced Customer Experience

Regardless of the diverse risk profiles of individual banks and measures taken by regulators and governments in different countries to support their banking systems, banks across the EMEA (Europe, the Middle East and Africa) region are faced with the challenge of combating consumer mistrust, a major consequence of the economic recession and credit market crisis of 2008.

The current market scenario is extremely challenging. A recent Forrester research emphasizes on the importance of “customer advocacy” in developing deeper customer relationships among financial services consumers. The key here is the perception on part of the customers that a firm’s strategies and actions are governed by their needs and well being, not just the firm’s own selfish motives. In order to survive today’s market environment, banks in the region our under tremendous pressure to deploy advanced functionality, comply with regulatory requirements, improve security and enhance customer experience.

Banks are dissatisfied with the outcomes of their cross-selling/up-selling efforts. Other major concerns include consolidation of multiple products like account statement, credit card statement and investments and loan statement, consolidation of multiple systems like loan management system, wealth management system and CRM, distribution to multiple output channels like print, email and web presentment and dependency on vendors/ IT experts for performing minor changes on different systems.

Banks that succeed in defining and implementing solutions to offer fulfilling banking experiences to their customers will be the ones that will thrive into the future. Making the best use of customer data and segmentation is the key to high-quality interactions that attract and retain customers. An effective Customer Communication Management System would help banks leverage demographic profiling to capture customer interest, establish customer intimacy and earn customer advocacy.


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Swati Pandey
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