Back in the sixties when I grew up in a small town in India, the branch manager of the neighbourhood bank was an iconic figure. He knew everything about every family in town, and took lending decisions after a subjective assessment of factors, both financial and social. When my father wanted an education loan to send my elder brother to university, the bank manager sat him down to discuss my brother’s choice of subjects, lament the state of education in the country, and after multiple cups of milky tea, signed off on the loan with a handshake and a hug.
Today, a loan can still happen over a cup of tea, or dinner. But the difference is that you can do it from the comfort of your office or home, without even knowing the name of your bank manager. You go online, chat with an adviser — perhaps even a robot adviser, complete a digital form, upload a couple of documents, and the loan is credited by the time you finish your cuppa. It is digital banking with a human touch, albeit without the hug.
Historically, the evolution of banking services has brought banks closer to customers. It was less than a hundred years ago that banking via branches was introduced in the United States, so that a customer didn’t have to travel half a day to reach the bank’s head office. And until the 1990s, regulations didn’t allow banks to open an unlimited number of branches.
When ATMs were first widely introduced in the 1970s, the concept caught the imagination of customers who often expanded the acronym as ‘Any Time Money’ rather than ‘Automated Teller Machine’. Imagine not having to wait until service hours to get your money from a bank! So revolutionary was 24/7 banking that Citibank launched their iconic tagline ‘The Citi Never Sleeps’ to attract customers.
Call centres (the term was already accepted in the Oxford English Dictionary in 1983) were the logical next step, allowing customers to transact and get advice beyond traditional banking hours from the comfort of their homes. Then came online banking. With the popularity of the internet, and the expanding customer bases of banks post the M&A spree of the late nineties, banks discovered the online channel to be the most cost-effective among all self-service channels. This was followed, around the turn of the century, by SMS banking via mobile phones.
Today, with over 5 billion mobile phone users in the world, most banks offer native mobile banking applications on Android and Apple iOS devices. As evolution goes, this current decade is replete with banking innovation — technology is being harnessed to include everything ranging from artificial intelligence to virtual reality to robots into banking. Some experts believe that, by 2020, about $2 trillion (Dh7.34 trillion) worth of assets in the US will be managed by robo-advisers.
Making it personal
Today’s innovators remain in step with the times by redefining what it means to be a ‘friendly’ neighbourhood bank. When the bank is your friend on social media, it can scan what restaurants and brands you ‘like’, and offer you meaningful promotions.
Munich-based Fidor, for instance, works only online, by tapping into social networks to create what it calls “banking with friends”. ICICI Bank in India allows customers to transfer money via Twitter. In the UAE, customer touch-points have multiplied to include artificial intelligence and augmented reality, with walls that talk to you and chatbots that remind you to pay your bills.
A 2016 McKinsey study says that nine out of ten consumers in the UAE use digital banking channels, both mobile and online.
In its latest avatar, an online banking channel is personalised to your profile, so you get spending analysis, saving and investing widgets and relevant insights. You can buy a banking product just as you shop for everything else, with a click. On a personal wall, you can post to customer care, chat with your adviser or schedule an appointment with your relationship manager while you pay a utility bill.
Just as technology makes it possible to talk face-to-face with your parents in another country, it can add the same dimension to your banking experience. Instead of interacting with a machine, a human banker is online, face to face, for your every need. Banks like Emirates NBD now use instant video and live chat in a secure environment to share documents, explain product details and even deliver personal loans.
We call it FaceBanking because the future of banking is not just high-tech, it is also high-touch.
Suvo Sarkar is the senior executive vice-president & group head of Retail Banking & Wealth Management at Emirates NBD.