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Electronic options key in retail banking Back  
Methods of transacting banking business which allow customers the greatest freedom continues to play a huge part in retail banking product development writes John Hickey.
The vision, creativity, and energy of an entrepreneur and the skills of a good manager have the potential to become a very powerful combination.

The benefits of a good banker are not just in providing capital, but also in bringing experience and expertise to assist the entrepreneur to grow and to avoid some of the pitfalls that might otherwise damage a fledgling business. In many incidences the bank manager substitutes for the typical experience found on the board of directors of a larger company and reflects the range of experience that good bank managers have accumulated. In my experience, successful businesses seem to enjoy a very positive relationship with their bank.

The emphasis in a successful partnership is on a close, two-way relationship. This raises the importance of ongoing and worthwhile contact between the bank manager and the customer.
To create the time for customer contact, AIB has invested in a comprehensive range of services that give greater control to the business owner to conduct transactions, to access their accounts and to make best use of surplus cash. These new services, or delivery channels, give greater options to customers on how they want to do business. Electronic services are also less costly for the bank to provide and this benefit is passed on to customers in lower prices. Typically a business will use electronic channels for routine activity, while visiting a branch for higher value or more complex activities, such as borrowing money, planning for retirement or whatever. More and more, the bank manager will visit the customer’s place of business. Clearly, getting financial support is one of the banking challenges faced by businesses on a day-to-day basis.

Research on business customer needs, conducted for AIB as part of our brand research programme, highlights that the principal attributes customers seek in a bank manager are that they be reliable, consistent and supportive of the business. This does not just extend to the availability of credit when required, but places a great emphasis on doing normal transactions in a simple reliable and customer focused way. It relates to having easy access to the bank manager and to other decision-makers. Truthfully it must be said that banks have had some ground to make up to be everything their customers would wish them to be. In AIB we have responded to this in a number of ways:

1. Over the last 2 to 3 years we have been investing heavily in the reliability of day to day banking. This has involved hiring more staff, investing much more heavily in staff training and simplifying transaction processes as far as we can.

2. We have added more options as to how customers can do business with the bank. We have introduced an internet business banking service (IBB), which gives complete control to businesses in moving money between their accounts, handling wages, or making payments domestically or abroad, in a very cost effective way.

3. We have formed an alliance with An Post which gives AIB customers access to over 1,000 Post Offices throughout Ireland, bringing the services of the bank into towns and urban areas where there has been no banking service in the past. The service does not, however, substitute for the bank branch, which was, and always will be, the main channel of choice for the customer. We are also working with some of our retailer customers to install AIB (250) ATMs in their outlets.

4. We have been placing greater emphasis on relationship banking. This means that each business customer has a nominated person within the bank to look after their needs.

Internationally, the trend is towards significantly more electronic banking and banks are encouraging customers to do transactions through electronic channels because they are less expensive. This encouragement is through cheaper pricing for electronic transactions. Government play an important part in encouraging this trend. It is regrettable that the government, through the new and increased charges for plastic cards in the last budget, are actively discouraging Irish customers from embracing the benefits of technology.

The other emerging trend internationally is the number of competitors who only provide one product, or serve only a limited section of the market. This poses challenges for all markets to ensure that this niche approach does not leave sections of the market without access to banking services.

Looking to the future in Ireland, there is no doubt that electronic and self-service options will also play a greater part for customers. Because they cost less, this benefit is passed back to customers, so everyone benefits. The emphasis, however, must always remain with the needs of the customer rather than what is technically possible. Equally, the banker must provide solutions to customer needs, rather than banking products. By offering more electronic banking methods, we are ‘freeing up’ more time for more of our people to build closer working relationships with our customers. Banking is central to the needs and prosperity of any business, but it is not the reason why our customers are in business. Banking should, therefore, be simple, unobtrusive, and supportive.

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