Strategy No. 5: Stand out for your online experience.

When confidence plummeted along with the value of their investments, people started to track their savings more closely to preserve what they had left. Mostly, they did this online, for two reasons – cost and convenience.

The increase in online banking intensity presents banks with an opportunity to improve customer satisfaction. Why? Because studies have shown that customers are relatively happier with their online banking experience than overall and online banking users buy more products and transact more often.  In a market full of “me too” offerings, quality of experience is a bank’s greatest competitive differentiator – to get that right is to get ahead.

To start with, online modes must be transformed into relationship channels from transaction channels. The reason why relationship managers bring profitable business is because they use their in-depth knowledge of customers to build rapport, which finally breeds loyalty. With technology, the insight of relationship managers can be made available to the bank across all touch points, so that every interaction, regardless of channel, has the same feel of intimacy about it.

This can be extended by humanizing the online banking experience. When a bank invites customers to share their experience on Web 2.0 forums, it’s saying that it cares about how they feel. Similarly, by adding an audio-visual remote advisory service to net banking through which users can seek the help of a representative, the bank can build the confidence of the not so technically savvy.

The online experience of retail banking customers may also be enriched by providing tools for personal finance management that help them plan budgets, simulate savings portfolios, compare investment options, calculate an EMI burden etc.  Since the reason why customers are going online is so that they can monitor their savings better, the availability of such a facility will resonate with that need, and make a tangible difference to their usage experience.

The bank that does this first draws first blood.

You can also read my earlier blogs:

Competitive Advantage from Innovative Management Strategies

 Strategy 1: Incremental Innovation, big bang advantage!

Strategy No. 2: Channel innovation - your hidden weapon.

Strategy No. 3: Keep customers, beat competitors!

 Strategy No. 4: Agility for the long running bank.