Complex Imperatives

The Indian Banking Customer Experience

May 2010

Accenture Research
2
Introduction
Emerging customer behaviours, changing demographics,
and increasing technology options are driving banks
in India toward new challenges and opportunities.
Banks today are serving a more complex customer
base: more diverse geographically, more varied
demographically, and dotted with entirely new buyer
segments. These “complex imperatives” have brought
with it an increasing debate about customer acquisition
and retention. One of the major challenges faced by
banks is the ever rising customer expectation. Customer
expectations are rising while their sense of loyalty is
falling. The rapid advance of communication technology
and electronic commerce has eroded customer loyalty
by creating more convenient access to product
information, purchase options and services.

3
To help banks navigate the challenges and opportunities of this
complex landscape, Accenture has developed The Indian Banking
Customer Experience, an extensive survey aimed at gaining
a deeper understanding of the Indian customer’s behaviour,
expectation and satisfaction of banking services, with a special
focus on distribution touch points.
The findings provide fascinating insights into the customer’s
changing imperatives, perceptions and priorities within the
banking space. Overall, the research yields four key findings,
each of which brings significant implications for the future
strategies of banks. These key findings are:
• Traditional channels continue to drive usage
• Alternate channels are yet to gain customer acceptance
• Customer satisfaction is a function of expectation
• Customer experience is driving the ‘bank of choice’

4
Methodology and sample
This quantitative research is based questions to every channel they used.
on a 30-minute interview conducted Further, respondents who used several
face-to-face with 3,459 banking channels may not have answered
customers between September and the questions to all channels.
November 2009. The sample was Data collection was completed for
spread across gender, age and location Accenture by IMRB.
in India, covering retail customers of
eleven banks from both public and
private sectors. Respondents were
active banking customers, implying
those who had a bank account for at
least three months with the primary
bank and had done business with the
primary bank in the past year at the
time of survey. Core sections were
answered by all respondents, however
not all respondents answered the

Customer profile/channels included in the survey,

with numbers of participants
Figure 1.
Respondents by Banking Channels Respondents by Age
Bank branch 1,396 18-26 yrs 802
ATM 712 27-35 yrs 1,359
Internet 555 36-45 yrs 881
Call centre/ Phone Banking 483 46-60 yrs 417
Mobile Banking 313 Total 3,459
Total 3,459 Respondents by Location
Respondents by Gender Urban
Male 2,781 Delhi 507
Female 678 Kolkata 462
Respondents by Primary Bank Mumbai 522
Public sector banks (3) 955 Chennai 543
Private sector banks (6) 1,892 Semi-Urban
Foreign banks (2) 612 Lucknow 276
Total (11) 3,459 Bhubaneshwar 415
Baroda 382
Kochi 352
Total 3,459

5
Key finding
No. 1

6
Traditional channels continue to
drive usage
Customers’ preference for traditional
banking channels i.e. Branch and ATM
comes across prominently in our study.
There are over 65,000 branches and
nearly 44,000 ATMs of commercial
banks across India. These two channels
continue to dominate customer
preference. Over 78% respondents
mentioned the Branch and ATM as the
preferred channel for priorities such
as accessibility, quality of service and
speed of problem resolution.
Although traditional channels continue
to engage customers, there are unique
demands and expectations for the
alternate channels such as mobile
and internet. Contrary to common
perception, alternate channel banking
is not necessarily impersonal. The
survey indicates market segmentation
of customer needs about who and/
or when to transact at each delivery
channel. The preference for alternate
channels is influenced by the type of
banking activity. The preference is
higher among men, reduces with age
and increases with educational level of
the Indian customer.
The differences among customer
segments provide unique insights
for banks particularly in light of the
country’s changing demographics.
Early adopters of mobile banking for
instance, are predominantly young,
male, and more affluent even in
mature markets of United States and
Canada. However these factors gain
higher prominence for India which
is seeing its demographics shift
increasingly toward the young and
working population. Since majority
of the working population in the
25–40 age group has a high disposable
income and are banked and tech-
savvy customers, banks typically
consider this age group their target
audience. The 20–40 age group is
expected to have 450 million people
in India by 2030, potentially creating
a huge population for the delivery of
banking services through alternate
channels. Mobile banking will be the
next revolution in the way financial
services are marketed, bought and
delivered in the coming years by this
young population. Mobile banking will
also be a critical driver of financial
inclusion as it is nearly impossible for
banks to build a brick-and-mortar
infrastructure for retail banking in
rural India. Despite the large number
of branches across India, their
coverage of population is abysmally
low compared to mature countries.
The average coverage is about 18,000
people per branch in India, against
3,600 in the U.S. and 4,800 in the U.K.
This national figure does not highlight
the regional differences in density
which is far lower in rural India.
The need to promote alternate
channels is undoubtedly high. However
our survey indicates that customers
are currently using mobile banking
for very basic activities like checking
account balances and statements.
Generating greater growth of mobile
banking services will require banks to
expand the offering and focus more
heavily on messaging that addresses
the target customer segment. There is
a need to segregate between young
affluent versus rural or semi urban
customers. E.g. affluent customers
with high end phones look for complex
functionalities. In countries like Japan,
phones with finger print encryption
are almost becoming a necessity due
to the wide usage of mobile wallet.
Rural customers seek sms (short
message service) based authentication,
simple features and very low or almost
nil charges. Likewise, generating
greater growth of the online channel
will require banks to appropriately
design the website and messaging to
suit the specific needs and banking
patterns of the young versus aging
population, urban versus rural etc.
7
Finding No. 1: Traditional Figure 2. Profile in terms of preference of channels and which one do you prefer
using for transacting business?
Channels drive usage
ATMs continue to dominate since ATM 47%
it offers the most efficient and
easy accessible means for cash Bank Branch 31%
withdrawals for a large segment
of retail customers. Preference for
Internet 12%
the Branch is stronger among the
customers of public sector banks.
Call Centre/ 6%
A high percentage of retail account Phone Banking
holders have three types of banking
relationships with their bank – savings Mobile Banking 4%
account, fixed deposit, and debit card.
Their basic needs with regards to the *Base only includes respondents who currently use channel Base=3459
primary products are well met through
Source: Indian Banking Experience Survey December
traditional channels. The accessibility
of these channels is the key factor for
account holders in short-listing a bank.

The preferred channel to transact

banking differs by age, gender and
location:

• Urban respondents have a greater

number of users for non-branch
channels such as ATM (higher by 9%)

• The proportion of ATM users

decreases with age in favor of the
Branch
Figure 3. Preference for usage of channels
• Respondents from the older age
You mentioned you prefer using ___________(specific channel) Why do you feel this way.
group value problem resolutions more
than the younger generation, while Summary
working hours and accessibility are
Accessibility of channel-Anywhere 66%
important to the younger generation
Quality of service through channel (No errors made) 63%
• Women have a greater preference
for the Branch channel Speed of service through channel (Less or No waiting time) 60%

• The use of Internet and Phone Security of the channel 55%

Banking increases with educational Working hours for the channel 51%
level – over 35% graduate & higher
educated sample had a preference for Cost of availing the service through channel 42%
Internet and Mobile versus 9% in the
Problem resolution capabilities of the channel 42%
less educated segment
Human contact/ Interaction provided by channel 21%

*Base only includes respondents who are using the channels

Source: Indian Banking Experience Survey December

8
The preferred channel to transact
banking differs by type of activity:

• ATMs are most often used for

checking balances and withdrawing
cash

• Internet banking is most often

used for account statements, money
transfers and payment of bills

• Call Centre/Phone banking is mostly

used for administrative purposes such
as requesting debit/credit cards or
cheque books, stop payments and
complaints

• Mobile banking is most often used

for checking balances and account
statements

Figure 4. For each activity which channels would you use?

Bank Branch ATM Internet Call Centre/ Mobile

Phone Banking Banking

Issue demand draft 85% 0% 16% 10% 0%

Obtaining documents/ 82% 0% 22% 14% 0%

Forms for banking needs

Making a Fixed Deposit 81% 2% 7% 4% 2%

Request for Debit/ Credit card 76% 0% 21% 26% 0%

Application for loans 74% 0% 19% 18% 7%

Transfer Money 71% 10% 37% 6% 9%

Request for cheque book 68% 4% 29% 35% 19%

Stop cheque payment 68% 0% 24% 31% 24%

Payment of bills 67% 6% 32% 6% 5%

Change of ATM/ 46% 27% 34% 13% 13%

Internet banking password

Account statements 41% 31% 43% 22% 26%

Checking your balance 18% 57% 32% 21% 30%

Withdrawing cash 15% 90% 0% 0% 0%

Source: Indian Banking Experience Survey December Base=2996

9
Key finding
No. 2

10
Alternate channels are yet to
gain customer acceptance
Alternate channels usage though
consistently on the rise, is still
struggling with customer acceptance.
Low awareness levels are driving the
‘lack of need’ and hence poor usage.
The greatest barrier for respondents
in using multiple channels is that they
do not feel the need to use a different
channel as well as the low awareness
for internet, phone and mobile
banking.
From banks’ point of view, the cost
per transaction at a Branch is almost
three times the cost at an ATM.
Electronic channels namely, internet
and mobile banking are even more cost
effective. Celent estimates the cost
per transaction in India to be US$1.14
for Branch banking, US$0.46 for ATM,
US$0.23 for Internet and US$0.09 for
Mobile banking. There is tremendous
potential for banks to cut down the
costs by encouraging customers to use
alternate channels – though customer
acceptance alone can drive this shift.
Despite the high penetration of mobile
phones in India, mobile banking is
not widely adopted owing to the
accessibility of traditional channels but
also owing to limited efforts by banks
to onboard customers. Understanding
the customer experience of alternate
delivery channels will enable banks
to transcend the barriers in the mind
of customers by suitably designing
the channel offering and marketing
message to foster channel adoption.
Interestingly, a promising finding
of our survey is that customers are
open to the idea of trying out new
channels. The positive trend is that
nearly 40% of respondents indicate
they are planning to use at least one
new channel in the next six months
to interact with their primary bank.
To capture this opportunity of new
users for alternate channels, banks will
first need to ensure an integrated and
consistent service experience across
the multiple channels.
11
Finding No. 2: Alternate
Channels yet to gain
acceptance
Although respondents generally do
not feel the need to use non-branch
channels, this barrier is lower in the
younger age group.

• Over 40% of the respondents in the

age group of 46 – 60 years did not feel
the need to use any non-branch/ATM
channel

• Between 28-30% of the respondents

across age groups demonstrated low
awareness of the channels or service

• Service quality, convenience &

security concerns accounted for less
than 5% of the overall responses

Figure 5. Please can you tell us what comes across as barriers to you in your usage or your
intention to use the particular channel?

Main themes* Bank ATM Internet Call Centre/ Mobile

Branch Phone Banking
Accessibility is a problem/ 17% 14% n/a 2% 1%
No facility

Lower awareness about service/ n/a 7% 31% 28% 29%

channel

Do not feel the need to use/the 9% 39% 37% 41% 38%

channel satisfies my needs

Additional charges n/a n/a 2% n/a 2%

Do not know about the security n/a 3% 3% 1% 1%

of the channel

Channel convenience 41% 11% 2% 4% 3%

Service is not prompt 21% n/a n/a 3% 16%

No knowledge on using the internet n/a n/a 8% n/a n/a

Additional other barriers not 12% 37% 11% 16%

applicable to the above

*Only top mentioned responses noted Base=3459

Source: Indian Banking Experience Survey December 2009

12
Customers constantly evaluate ways to
transact more efficiently, and possibly
consider using at least one new
channel, even if on an experimental
mode.

• Customers who indicated that they

will be trying out new channels are
primarily satisfied with their current
channels too

• The average importance of alternate

channels continues to be low:
Branch – 38%; ATMs – 39%, Internet
Banking – 10%, Call Center – 7% and
Mobile - 6%

• Accessibility of the channel, quality

of service and speed account for the
top 3 reasons (accounting for 50% of
the reasons shortlisted) in selecting
a banking channel. Though these
features are well available alternate
delivery channels for most common
transactions low customer awareness
drives perceptions

Figure 6. Intent to use. Please think of the channels not used by you currently.
Which of the channels you intend to start using in the next 6 months?

Mobile Banking 17%

The channels that

Call Centre/ Phone Banking 16% respondents are most
38% likely to start using are
mobile banking and call
Internet 15% centre/phone banking.

ATM 3%

*Base only includes respondents who are currently using channels Base=3459

Source: Indian Banking Experience Survey December

13
Key finding
No. 3

14
Customer satisfaction is a
function of expectation
Customers not only prefer to use
traditional banking channels but they
are also more satisfied with traditional
channels they use. Preference for
traditional channels is driven by
customer perceptions of accessibility
and quality of service. ATM as a
channel has the highest satisfaction
among the user base, even higher
than the Branch. Almost 50% of
the respondents prefer transacting
business with the ATM. This finding
however should be interpreted in
light of the type of activity for which
the channel is used, as well as the
customers’ expectations from their
primary bank.
The complexity of customer
expectation is magnified by
differences in age, education level
and location. Those banks catering
to a more affluent customer segment
generally had lower satisfaction
ratings in our study. Younger,
educated customers and those based
in semi-urban areas have higher
expectations from their bank in terms
of accessibility of channels, quality of
service, speed of problem resolution,
as well as lower service charges
and competitive rates of interest.
Respondents in semi-urban areas are
generally more dissatisfied with the
cost of service charges. Our follow-up
analysis to this response reveals that
service charges levied by public sector
banks typically tend to be lower than
those levied by private and foreign
banks. The customer is either unaware
of their primary banks’ published
schedule of charges or oblivious
to the value-add in accompanying
services. Better communication and
transparency can go a long way in
managing customers’ expectation on
service charges, and consequently,
their satisfaction ratings.
The broader challenge however is that
customer expectations for service
have been continuously increasing and
banks seem to be falling short, despite
the improved perception of service
quality. The annual banking system
survey released in February 2010 by
the Federation of Indian Chambers of
Commerce and Industry reinforces our
finding from the standpoint of banks.
According to the FICCI survey, banks in
India rate their number one challenge
(on a mode scale of 1 to 7 with 1 being
the biggest challenge) today to be the
"ever rising customer expectation".
Banks rated ever rising customer
expectation ahead of their next big
challenges namely, risk management
and maintaining the growth rate.
Transition from class banking to mass
banking and increased customer focus
is drastically changing the landscape
of Indian banking. Erosion of price
and feature advantages across banks,
and price sensitivity is leading to an
increased propensity for customers
to switch. Emerging collaboration
technologies have the potential
to dramatically improve the speed
and quality of service interactions.
However, these need to be better
aligned to customer behaviours –
differences in customer segments,
geographies, and demographics have
to be considered while defining the
target experience across channels.
Banks need to design a model that is
closely aligned to the distinct needs
and preferences of their most valuable
and profitable customers.
15
Finding No. 3: Customer For instance, in the age group of 27-35
satisfaction levels with ATM were 63%
Satisfaction is… vs. 51% for Branch.
ATM as a channel has the highest Internet & Mobile Banking
satisfaction among the user base. Private Sector and foreign banks had
However one needs to read this in higher ratings vis-à-vis public sector
light of the activities for which each players. Even though the younger &
channel is normally used. educated segment preferred these
channels, their satisfaction was
Bank Branch lower. There is a gap between user
Customers of public sector banks expectation vis-à-vis service delivery
had a higher satisfaction percentage through these channels.
vis-à-vis private & foreign banks.
This is influenced by the customer Call Center
expectation from these channels There were similar trends across banks
which in turn is influenced by the with 3 exceptions.
customer profile (education, age etc).
Banks catering to a more affluent
customer segment generally had lower
satisfaction ratings.
ATM
Overall satisfaction levels were
similar across banks except for three
private sector banks. Our study clearly
indicates that the satisfaction with
Branch increases whereas satisfaction
with ATM decreases with age.

Figure 7. Satisfaction with Channels

We would like you to understand how satisfied you are with the channels you have used?

Summary of All Channels Used

38% 43%
Extremely Satisf ied 51% 48%
60% 68%
(76:100) 69%
78% 85% 75%
31% 25%
Somewhat Satisf ied 27%
(51:75) 27%
25%
Somewhat Dissatisf ied 27% 26%
19% 20%
(26:50) 13%
3% 2% 4% 5% 6%
Extremely Dissatisf ied
Bank ATM Internet Call Centre/ Mobile
(1:25)
Branch Phone Banking Banking

*Base only includes respondents who currently use channels Base=3459

16
Figure 8. How satisfied you are with your primary bank for the following factors?
(Satisfaction rated on a scale from 1 – 100 with 1 being very dissatisfied and 100 being very satisfied)

Bank Branch ATM Internet Call Centre/ Mobile Banking

Phone Banking

Security of the channel

53% 48% 54% 48% 56%

Quality of service through channel

48% 48% 53% 49% 52%

Speed of service through channel

44% 53% 55% 50% 52%

Problem resolution capabilities of

the channel 44% 40% 49% 43% 50%

Working hours for the channel

42% 49% 52% 47% 49%

Accessibility of channel
41% 45% 51% 51% 53%

Human contact/ Interaction provided

39% 33% 36% 41% 42%
by channel

Cost of availing the service

38% 42% 44% 46% 38%
through channel

*Note that only the ‘Extremely Satisfied‘ scores have been mapped here
Highest Lowest Top Two satisfaction factors

17
… a function of Customer Figure 9. Thinking about your relationship and interaction with your bank, what are the key
expectations you have from your bank?
Expectation
Speed of problem resolution 78%
The expectation of customers from 60%
their primary bank differs by location
and age profile: Better ATM coverage 59%
55%
• Respondents from semi-urban areas
in their relationship and interaction Better branch coverage 55%
with their banks have greater 53%
expectations than urban respondents
Lower user charges 54%
- Respondents in semi-urban areas are 48%
keener than their urban counterparts
that their bank offer competitive The bank should be more secure and reliable 48%
interest rates and lower user charges. 44%

- Respondents in semi-urban areas Shorter queues at branch 42%

are more demanding on the quality 43%
of service and expect their bank to
be more effective in communicating Transparency in levy of charges 46%
42%
products and services.
• Younger customers in their Courteous service at branches 46%
40%
relationship and interaction with their
banks have greater expectations than
Longer branch banking hours 42%
older customers aged over mid-40s 40%
- Respondents in the 46-60 years
Quality of Service (No errors made) 52%
group have lower expectations with 40%
regards to ATM/Branch coverage than
the 27-35 years group. Customer service should be more helpful 43%
39%
- Respondents in 36-45 years age
group are more particular about their Knowledgeable and responsive phone 32%
bank’s quality of service compared to banking support 33%
other age groups.
- Speed of problem resolution is Should offer competitive interest rates/ 40%
loan rates to cus 33%
slightly more important to the under
35 years than above. 44%
Offer Personalized services
31%

Better online banking platform 28%

29%

Give variety of products/services available 33%

28%

Should be technologically advanced 32%

26%

Should offer me good investment 30%

opportunities 25%

Effectiveness in communicating 35%

on its activities, product 24%

Should offer accessibility through 30%

multiple channels 24%

Should improve its Brand Equity 11%

12%

Urban Semi-Urban

Source: Indian Banking Experience Survey 2009 Base size = total sample Base=3459

18
Figure 10. Thinking about your relationship and interaction with your bank, what are the key
expectations you have from your bank?

69 18-26 yrs
70
27-35 yrs
36-45 yrs
65 46-60 yrs
65

60
60
57
56
55 54
51
50 53
50 49 49
51 48

45 44
42

40
Speed of problem Better ATM Better branch Lower user Quality of Service
resolution coverage coverage charges (No errors made)

Source: Indian Banking Experience Survey December Base=3459

19
Knowing the customer: managing loyalty
As brands become increasingly
commoditized and competition grows
more intense, customer loyalty has
all but vanished. In this environment,
understanding the factors that drive
loyalty, and managing these factors
successfully, is critical to staying
relevant, competitive and profitable.
The key is to take a scientific and
end-to-end approach to loyalty
management, that takes into account
every form of loyalty and which
encompasses the entire relationship
lifecycle.
20
What every organization should know about customer loyalty
Know where loyalty begins
The factors that create and influence customer loyalty begin to take effect even
before a customer becomes a customer. The relationship a customer develops with
the brand during the acquisition stage strongly influences customer value and
retention.
Know what to look for
Most companies know a lot about their customers, and comparatively little about
the factors influencing acquisition and retention. Achieving high performance
in customer retention means aligning activities throughout the relationship
lifecycle—including acquisition—and using econometric and return-on-investment
analytics to study and maximize conversion rates and other customer behaviors
across channels and throughout the lifecycle.
Know every kind of loyalty
Loyalty is not necessarily an emotional connection to the brand. True brand
evangelists—or even potential evangelists—are at best rare and possibly non-
existent. Companies need to recognize, develop and manage more than one kind
of customer loyalty: conditional, emotional and passive—using more than one kind
of strategy.
Know what to measure
Companies often measure the wrong things when trying to measure customer
profitability and loyalty—loyalty indicators are far more involved than customer
satisfaction scores. Establishing and managing cross-functional key performance
indicators throughout the customer lifecycle helps prevent the loss of current and
potential customer value.
Know how the value chain affects loyalty
Third-party channels and routes to market also affect customer loyalty—and can
destroy unless they are managed effectively. Analysis and decisions concerning
such factors as offers, sales incentives, pricing, service delivery—all dimensions of
the customer experience—should include all the trading partners who contribute
to the customer experience.
Know how to manage complexity
Products, service bundles, channels—these and many other factors have grown
exponentially more complex in recent years, making customer loyalty more
complex to manage well. Providers must retain the ability to react quickly to
changing customer needs and market conditions.
21
Key finding
No. 4

22
Customer experience is driving
the ‘Bank of Choice’
Our findings clearly indicate that Figure 11. Please tell us why you mentioned the following bank as ‘the only bank I would
customer service delivered via consider’ to transact business with?
multiple channels is driving the ‘Bank
of Choice’. Indians are most likely to Main reasons Multiple responses
consider good customer service as Satisfied/received good customer service 53%
the main factor for choosing a bank, Prompt/quick service 13%
cited by over 66% percent of the
Is trustworthy/secure 13%
respondents. While customers have
a variety of expectations for good Better branch coverage 12%
service, they care most about how Polite/good/proactive staff 10%
well informed and personable their Provides good facilities/schemes 9%
customer service representative is,
Better ATM coverage 8%
how fast and efficiently they receive
service and how long it takes for their Due to salary account 5%
issues to be resolved. Public sector bank
5%
Proximity to bank/ATM
Customer service is the key factor 4%
for continued relationship with Long term relationship with bank/
been there for long 3%
the primary bank. The level of
recommendation is high but varies Transparent in dealings 2%
substantially by bank. For one bank, Can keep minimum balance/low deposit 2%
80% of respondents were very likely
Serves all my needs/customer centric 2%
to recommend their primary bank to
a relative/friend/colleague. In another Good reputation 2%
case, only 35% of respondents were Has a global presence 2%
very confident of recommending their 2%
Lower/fair user charges
primary bank.
Good interest/loan rates 2%
Better customer service standard is Convenient working hours/services 2%
also the key reason for a customer
Communicates well/gives information 1%
to switch to another bank. Banks will
need to focus on customer retention Private sector bank 1%
as gaining new customers is subject Resolves problems/query resolution 1%
to fierce competition and pricing
Latest technology 1%
pressures, adding to the cost of
acquisition. There is little difference Base size = total sample
between basic products and services
being offered by banks today. In this
highly commoditized market, customer
experience will be the key source of
differentiation.

23
Delivering the customer experience:
satisfaction and profitability
Investing equally in every customer—
whether to gain or retain their
business—is seldom effective or
even necessary. High-performance
businesses know what it costs to
serve the customers they have, what
it will cost to acquire those they
desire, and the lifetime value of these
relationships.

Determine service levels across the

channel portfolio according to the
customer needs and profitability
defined by the new strategy. Typically,
this will involve handling most service
transactions through self-service
or guided-service channels, while
reserving costlier support options
for the more valuable customers
and transaction types. Remember
that emphasizing self-service still
means emphasizing good service:
personalized, efficient and consistent.

24
Implications
Banks must focus on the
following to drive channel
usage and enhance customer
experience:

• Right channel and

customer mix

• Well defined customer

messages

• Structured feedback gathering

and subsequent improvement
driving process

• Consistent experience across

channels – segment, information,
service level agreements

• Digitalization and innovation

to enable banks to retain and
acquire customers

Implications for each of the

interface channels are different,
varying in terms of priorities
for both the customers and
the banks.

25
Implications for
Branch Banking
Provide a Consistent But
Customised Experience at
the Branch
At each step of a customer’s branch
journey, there is an opportunity to
transform the customer’s perceptions
of the bank.
Currently, banks have set up special
branches for key segments or have
separately designated areas to offer
differentiated customer experience.
But on a larger scale, branch level
efforts are limited to providing
consistent look (colour schemes and
branding). The ability to provide a
consistent experience across branches
(some parts differentiated for
segments) will drive overall business
performance. This requires following
key elements to be addressed:
26
Figure 12. Branch Customer Journey Model
Showing the 6 key customer steps during a branch interaction
Attract & Welcome: Every customer is
greeted and offered help as they enter the
1. Attract branch
& Welcome Navigate & Browse: Visually distinct,
6. Follow Up
modular areas provide customers with clear
direction on where to go to conduct
2. Navigate transactions
& Browse Select & Wait: Customers are able to relax in
comfort whilst waiting to see an adviser
5. Wrap Up
& Leave Interact & Transact: Customers undergo
financial ‘health-checks’ to ensure they are
offered solutions based on needs
3. Select
4. Interact & Wait Wrap Up & Leave: Ability to route the
& Transact customer to the most appropriate adviser
based on their needs / profile
Follow Up: Customers can view and confirm
information before transactions are
completed
1. Change front line behaviours: Front
line staff behavior has to ensure
excellence at every “moment of truth”
during the relationship with the
Customer
a. Focus on managing initial
experience – First few months of
customer interactions will shape the
opinion and loyalty significantly.
Hence the staff should proactively
confirm experience, assist and take
feedback
b. Do need-based selling rather
than aggressive / campaign based
sales which often leads to negative
moments of truth
c. Offer financial advice and ensure
effective follow-up to inbound.
d. Ensure problem status transparency
and active follow-up maintaining
high “Emotional connect” with the
customer
Culture must be very clear and very
pervasive: buy in or opt out. Banks
must select right internal “champions”
to communicate expected behaviors.
2. Deliver differentiated customer 3. Refine accountability and metrics
experience with a robust and highly
simplified process and technology a. Build customer centric key
performance indicators (KPIs) mapping
a. Focus on execution excellence: satisfaction to operational & sales
Decouple “distribution” and metrics, customer lifetime value etc.
“production” with emphasis on
b. International best practice is
the “industrialization” approach
to formalize operational KPIs in a
(workflow-based and process-driven
“charter of services”: a real service
applications, reduced paper loads
level agreement with customers
though a paperless approach etc.).
Ensure optimized processing in order Last but not the least this has to be
to reduce the customer’s “time to yes” backed by a front office architecture
and the Bank’s “time to issue” that ensures customer centricity
(single view of customer), user
b. Needs-based Selling & Servicing:
friendliness for staff and efficiency
Compelling, simple, and clear
through straight through processing
propositions in terms of products
etc.
and pricing clearly matched against
customer needs
c. Fully integrated channels to deliver
a consistent experience to customers
(pre-selling, selling, and post-selling
processes designed to span through
multiple channels)

Figure 13. 7 key principles of Branch of the Future

Generating and Taking advantage of the traffic

Flexibility throughout the day

• Advertising according traffic in the branch
• Work environment changing for sales manager

Adaptation to Sell & Service oriented Entertaining &

Client’s values • No cash no teller Attractive
• Self directed • Meet & greet sales force • Modern design
• Relationship • Mobile workforces accommodation • Innovative
• Close link with CRM tools Technologies

Modular space according

• Localized marketing and segmentation
• Skills of the workforces

Focused on customer experience

27
Implications for ATM

Ensure Ease in
Accessibility and Use of
the ATM
ATMs over the last few years have
extended various facilities beyond
basic banking (cash withdrawal
balance check, mini statement, deposit
cash/cheque, funds transfer etc.)
like bill payments, airtime recharges,
ticketing etc. However, cash disbursal
continues to be the most popular
facility. In addition to providing
customer service, banks have used
ATMs to enhance branding and display
marketing material.

We believe in the future growth of

mobile banking with it’s mobile wallet
leading to reduced importance of
ATMs. Kiosks focused on customer
acquisition spread across retail outlets
will emerge which will be sales focused
and enable the customer to go beyond
basic banking transactions like detailed
statement print, apply for products &
services, use interactive digital frames
for planning and reviewing bank’s
services across product line.

28
29
Implications for Call Center
Personalize @ Call
Centers – the only non-
branch human interface
channel
Banks continuously make investments
into their contact centers but often
without a clear business value. This is
largely driven by the need to introduce
services to meet the channel offerings
in the market.
Banks cannot afford to “misallocate”
considering the impact to their
customer experience, brand, employees
and bottom line. Facing these
challenges, banks need to align their
contact center’s priorities around:
30
Differentiation of the customer to
enhance satisfaction: impacting
retention & revenue
Differentiation pre supposes deep
customer insight i.e. a systematic
handling of every customer interaction
based on deep understanding of
customer behaviors, preferences and
economic value
• Defining the Customer Experience
across channels and Lines of Business
to make contacts more customer
relevant - Today there is limited
visibility of compliant / request status
across channels. These functional silos
result in a poor customer experience –
from a customer’s perspective, it is the
bank at fault and not the channel.
• Increasing Self Service Utilization
– Banks have been trying to simplify
the automated systems to enhance
customer ease of operations for self
service. However, often these efforts
are more driven from contact center
optimization (costs, waiting time etc.)
rather than customer experience.
Leading technologies like voice
recognition to navigate menu items
& authenticate, personalization of
the menu based on frequently used
options will drive traffic towards self
service which needs to be backed by
robust straight through processing.
Give customer the control to enhance
usage and experience.
• Extend Sales to Servicing to expand
share of wallet and improve customer
retention – This has been a tough
journey for banks trying to develop
sales competencies and then ensure a
good balance between sales & service.
Lack of targeted campaigns (repetitive
sales messages every time customer
calls, untargeted message for the
customer / segment, too many sales
messages i.e.no control on call tree),
inadequate sales training and product
knowledge with call representatives
and poor follow through for closure
across lines of businesses has resulted
in sub optimal results on sales efforts
and declining customer satisfaction.
Banks need to drive marketing & sales
effort based on indepth customer
knowledge to ensure better conversion
and satisfaction.
Figure 14. Increase Operational Effectiveness
Achieving an optimal balance of cost, efficiency and customer satisfaction

Increase Self-Service Utilization Improve Work Flow Management

Aligning self-service capabilities with Focusing on integration and automation of
the customer most likely to use them events and internal & external processes

Infuse Customer Insight

Extend Sales to Servicing
Integrating sales insight and
changing agent behaviours
Systematic handling of every
customer interaction base on
deep understanding of
consumer
Enhance Desktop Tools and
Capabilities
Infusing the desktop with
customer insight without
increasing complexity

Improve Agent Effectiveness and Learning

Recruiting top talent, reducing time-to-competence,
continuous training

Industrialization to drive efficiencies

• Focus on the integration and

automation of events and internal &
external processes

• Enhance Desktop Tools and

Capabilities to increase sales agent’s
effectiveness

• Improve Agent Effectiveness &

Learning through continuous training
programs

• Centralize Infrastructure (Technology

& Support Services)

31
Implications for Internet
Banking
Maximize the User
Experience and Usage of
Internet Banking
Most of the internet banking users
are high net worth, affluent or young
urban customers. Few banks offer an
Internet Banking service for all product
groups plus additional, innovative
services which reach beyond standard
banking products. Some of the leading
practices in India are:
• Ability to allow the customer to see
account balances and transactions
from other banks within his primary
bank log in
• Assist the customer to better
understand his spending and
investment patterns e.g. ability to see
all debit / credit card payments split
across categories like entertainment,
household, personal products etc.
• Provision of financial planning tools
for customers
32
The potential of internet banking is
underutilized with basic transactional
services and untargeted generic
campaigns. Banks need to focus on:
1. Enhancing the sales capability of
internet banking focusing on – need
based offering, online advisory for any
queries, simple handling process and
straight through processing
2. Parallel to offering the functional
capability for sales services, running
customer on-boarding programs to
drive high usage frequency
3. Providing customer’s control to
personalize the site
4. Develop an integrated user
experience taking into account the
following 8 categories
Figure 15. Changing the mindset of customers, and aligning self-service capabilities with
the customers most likely to use them

Strategy
Group 1
High

Focus on reducing the margin of error through ongoing

improvements
Able/Not Willing Able/Willing
Group 2
Align solution needs with customer needs

Group 3
Ability to Use

Group 3 Group 1
Modify the behavior

Group 4
Ensure capability alignment to solve for “can’t”, provide incentives
for “won’t”

Not Able/Not Willing Not Able/Willing

Group 4 Group 2
Low

Low Willingness to Use High

Figure 16. improve customer experience 8 categories need be to considered while designing
the internet banking experience

User Experience

Usability Functionality

Information Product
Page Design Performance Personalization Sales Advisory
Structure Fulfillment

Security

33
Implications for Mobile
Banking
Optimise Mobile Banking
– The Channel of The
Future
Mobile Banking will be the game
changer as it enables rich, interactive
experience to mass affluent
customers and provides low cost
secure banking channel to a large
part of country’s poorly banked and
unbanked population. 80% of the
world population has access to mobile
phones.
Mobile banking has picked up in
India after the RBI issued operating
guidelines for mobile banking
in India in September 2008. RBI
recently revised guidelines for mobile
banking allow a larger ticket size for
transactions.
M-Banking services help banks to
“push” the relation with the existing
clients, to acquire new clients and to
increase overall profitability.
34
The rural segment is a gold mine of
opportunity – regulatory approval of
business correspondents (BCs) and
relaxed “know your customer” (KYC)
norms coupled with active players in
the BC segment means mobile banking
in the rural segment has potentially a
bigger customer base.
Banks acknowledge the importance
of the mobile channel but its slow
uptake has challenged their efforts
and investments in leveraging it as a
competitive advantage. Banks need
to create a robust platform to enable
a wide range of money management
capabilities directly through multiple
kinds of mobile devices. Younger
consumers in particular have high
expectations for what they should
be able to accomplish through their
mobile devices—their phones are
now simply enablers for their daily
activities, from communicating to
shopping to banking. Their banking
loyalties will be solidifying soon, so
banks must act quickly to provide
compelling and differentiating
services. Banks need to ensure that
their mobile money management
offering is:
• Beyond just text alerts as a
standalone feature - interactivity and
engagement are key mobile features
• Deploys full feature real time mobile
bank front ends for payment and
viewing, under bank brand control
• Leverages brand for trust and
security on mobile
• Includes mobile marketing to mobile
money service to maintain contact
• Provides additional services through
mobile payment ecosystem (ticketing,
vouchers, loyalty)
Figure 17. Banks can use the mobile channel to achieve significant differentiation cost
reduction and revenue expansion

Next Generation Value Proposition Customer Focus

Mobile Banking

SmartClient technology Customer Advocacy • “Put your brand into your customers pocket” Useful
makes mBanking fast and Differentiation • Market position as leading Innovator • Targeted services, information and
and cheap for the user • Offer convenience and simplicity transactions that a consumer will
• Greater quality and depth of relationship desire while on the move.

Latest Smartphone and Enhance • Improve convenience, ease of Interaction and security Convenient
3G technology allows Competitiveness • Serve your customer “whenever, wherever and • Allow the consumer to decide
mobile banking however they want” which phone they want to use –
features to equal that • Fewer errors and complaints not the bank.
of online banking • Extending contact points with the customer, • Do not rely on operating system,
improving retention phone or operator specific features.

Reach towards mobility Efficient marketing • Improve cross-selling ratio Secure

is growing significantly and Expansion/ • Place advertising in a place that consumers will view • High perception of security. The
in all areas of daily life protection of frequently phone should be like a wallet –
Revenues • Ability to blend channels to protect revenues when it is in the customer’s pocket
it is secure. Once lost or stolen, it is
easy to make the contents
worthless or unusable.

Contactless payment Reduced Cost • Encourage self-service for low-value transactions Simple
infrastructure, Bluetooth to Serve • Service volumes taken from higher cost channels • Simple, discoverable, rich
and WiFi expanding the • Leveraging existing online infrastructure where banks graphical interface. No Manual
network for Contactless have made significant investments required to use new features.
payments

The following factors should be

addressed in detail to ensure
successful launch:

• Value proposition

- Which customers should I target?

Already using mobile banking to
provide a wider range, not current
users but mobile savvy etc.
- What services should I offer? Online
features, additional features based
on GPS functionalities on phone (e.g.
assist in ATM location, merchant
categories etc), use of the camera
photo capability etc.
• Customer education & on-boarding
campaigns measured and tracked
continuously

• Constant innovation and service

evolution based on customer uptake
and feedback

• Rapid transition from launch to

steady-state low cost operations

• Collaboration and partnership to

share costs

35
Summary

36
Figure 18. Effectiveness of bank channels in the value chain of sales
Research Advice
(simple
products)
Branch
Internet
Mobile
Call Center
ATM
= High effective = Less effective
Source: Accenture analysis
Designing and executing the
appropriate customer experience
results in better financial performance,
reinforcement of the brand and
sustained or improved customer
loyalty. Multi channel consistent
experience will drive better customer
loyalty and results. Banks need to
clarify their channel strategy
1. Most banks do not have a clear
idea of how their channel mix should
work and which roles their different
channels are supposed to play
• Which roles are the channels
supposed to play?
• Which level of integration is
targeted?
• Which mechanisms should be used
to route customer to the appropriate
channel?
• How to overcome "people“ barriers
in integrating channels?
• Channel mix is forecasted to change
in the future
Sales Sales Post sales
(complex (transactions) purchase
products)
2. Channels will play more clear and
specified roles in the future which
leverages their specific strengths and
allows the channel mix to be more
effective
3. Banks need to implement
Multichannel integration on a process
level
4. Integrating channels on a technical
level is not sufficient
5. To reach client needs and realize
cost-savings processes needs to be
integrated between different channels
Growth means attracting new
customers and engendering loyalty to
make existing ones buy more, and in
banking the challenge is to attract,
retain and grow enough customers to
meet investors’ demands for a return
on their investments. In such an
environment, the new battleground is
the branded customer experience—the
sum total of customer interactions
that can determine whether and how
much they patronize a particular
company. A great customer experience
Re
can dramatically improve customer
loyalty, and also can serve as a
powerful draw for new customers.
The majority of financial services
organizations—whether in banking,
wealth management or insurance—are
playing catch-up in determining how
to integrate the channel, product
and customer-segment silos that
are preventing them from becoming
customer experience leaders.
Companies don’t just
sell a product – they sell
Customer Experience!
Starbucks does not sell
coffee. Harley-Davidson
does not sell motorcycles.
And Guinness does not
sell beer. Think about it.
37
Where does your organization stand?
Organizations respond to new risks Retention and cost management
and opportunities with different
methods and at different speeds—from Containing and managing customer costs
tactical projects within business units
to cross-enterprise transformation. • What are the incentives to reduce front-office costs impacting your front office
Making good decisions about where to activities? How would these reductions affect the customer experience?
head, how to get there and how fast
to move rests on knowing where you • Who is responsible for the acquisition and retention budget at your
stand today, based on your historical organization? How are investments in both areas coordinated?
performance, unique circumstances
• What statistics do you have linking “customer performance” to financial
and global position. Companies must
performance? How do you use these metrics to manage your business?
quickly and clearly judge their position
from these perspectives and then act • What information would help you better analyze and manage customer costs
accordingly. How customer centric is and return on investment?
your organization?
• What constrains you from obtaining or using this information?

Retaining current customers

• Who are your most profitable customers, and how are you managing these
relationships?

• What new needs do these customers have? How are they likely to change their
buying behavior?

• Do you know what drives loyalty within these segments?

• What will the impact be if these customers decline in value or leave?

• Are you willing to invest in these relationships today at lower profit, to keep
them in the long run?

Acquisition and growth

Expanding business with current customers
• What evidence do you see of changes in customer attitudes and behaviors?

• How are your customers’ requirements for service and support changing?

• How quickly can you change products, services, and pricing to meet their needs?

• How do your customers participate in the innovation process?

• What do you know about how customers perceive the value of your offering?

Expanding into new markets and customer segments

• Have you taken a fresh look at your growth strategy? How will it change going
forward?

• Have you analyzed markets and segments for new growth potential?

• How do these opportunities relate to any loss of revenue or profit you may
experience due to economic conditions?

• Do you analyze customers who leave and use this analysis when targeting new
customers?

• What are the key challenges to spurring growth in your more mature markets?

38
Accenture Assets & Offerings
1. Accenture Customer
Experience Transformation
Methodology

2. Accenture Next Generation

Branch

3. A
 ccenture Mobility Operated
Services (AMOS)

39
Figure 19. Central decision-making and execution agility

By sharpening actionable research, segmentation and analytics, banks can

deliver a consistent customer experience that meets new and evolving needs
and expectations and reduces churn
• Adapt product, proposition, pricing and
service strategies to meet changing needs
of target customer segments
Rules
Brand Call center • Prioritize marketing investments/
management
treatments on the most profitable customers
(and consider future potential)
Web
Centralized customer ownership
Market & customer intelligence

Customer • Create reasons for customers to stay and

Proposition experience spend by focusing on exceeding their
optimizer PoS expectations at those touchpoints that really
Strategy

matter to a customer and meeting their

Decision expectations at the rest
Production eMail
Marketing management
application
application
SMS

Customer Analytic
service DM
modeling

Customer
data

Source: Accenture

Figure 20. The big picture:

Accenture’s end-to-end view of retention and acquisition strategies and tactics

Insight Strategy
the right analytics the right levers
Customer Customer Customer
Compelling value proposition

satisfaction loyalty advocacy

Branded customer experience

Enablers
the right Brand Customer
operating model engagement relevance

Employee Employee Employee

Measurement Execution satisfaction engagement advocacy
the right metrics the right delivery

Source: Accenture

40
Accenture Mobility Operated Services (AMOS)

Accenture can also enable new

revenue services delivered through
mobile channels via its business unit
Accenture Mobility Operated Services
(AMOS)

Figure 21. Accenture can also enable new revenue services delivered through mobile
channels via its business unit Accenture Mobility Operated Services (AMOS) which offers
the mobility platform and vertical applications on top of the proven enabling platform

Managed Service
Reduce time to market SDP
• Simplified infrastructure • Winner of the 2006 CTIA
• Standardized interfaces
• Support for service level
Emerging Technology Award for
Mobile Infomobility Best Enterprise ROI
Voucher agreement-based developments
• SOA for service orchestration • 15+ million subscribers
• Component-based model
Mobile • 20+ service delivery projects in
Loyalty & Telematics
Rewarding North America, Europe and Asia
Mobility Platform Simple, cost-efficient, third-party • Accenture is among the
(Service Delivery integration
Mobile Platform with Mobile world’s largest implementers
Enterprise Money • Standardized design: SOA design,
Apps. Open SDP) Management modular, interface standardization for
MNO’s and business partners via API’s
Mobile Mobile • Complete solution: Streamline
Marketing Data delivery process, standard service
Services Collection components, unify subscriber database
• Open Solution: Open development
environment and free SDK, docking
station availability

Vertical Applications
Mobility Platform

41
Accenture Customer Experience Transformation
Methodology

To design and deliver a compelling

customer experience, banks must have
a 360 degree view of the market.

Figure 22. Pragmatic customer experiences that satisfy customers require an understanding
of customer expectations, the competitive landscape and operational constraints.
Accenture’s Approach to Customer Experience

Understanding current position: Customer Experience Blueprint

What are customer needs,
“Who”
preferences and expectations?
Identifies
What is driving satisfaction?
segments/Customers for
Driving future strategy: Voice of experience design and
“What opportunities exist the customer Segmentation/
Driving future strategy: delivery
to better differentiate Customer
“How should the
ourselves in the
customer experience be
marketplace through the
defined to deliver better
branded customer Customer customer satisfaction
experience we deliver?” Experience Execution
while being Treatments
Requirements
Design operationally effective?”
“Outside-In”
Marketplace Operational “How” “What”
landscape delivery Establishes business Defines experiences across
requirements and rules to all touchpoints throughout
Understanding current Understanding current execute defined customer customer lifecycle
position: Driving future strategy: position: experience
How are others “What customer How effective and
operating? What experience improvements efficient are our
operational trends will can be made to gain an operations and
change the competitive operational competitive interactions? Define Customer Experiences
landscape? advantage in the
marketplace?” Research Advice Sales Post Sales Re purchase

42
Accenture Next Generation Branch

Accenture’s Next Generation Branch

(NGB) is a series of prototypes and
solutions created by Accenture’s
Technology Labs to explore how
innovative technologies and branch
design can improve the banking
customer experience and sales and
service efficiency. A few snapshots:

Self service area Welcome area

Waiting area Advice area

43
References
1. Indian Banking System: Annual
Survey, FICCI, February 2010
2. Mobile Banking in India, Celent,
April 2010 and June 2009
3. Mobile Banking Creates a Bright
Spot Within the Struggling Financial
Services Industry, Yankee Group
Research, June 2009
4. Population by Age and Sex for India,
US Census, accessed on 28th April
2010
Authors
Sanjay Tugnait
Managing Partner, Financial Services,
Accenture India, Tel: +91 99201
66700, sanjay.tugnait@accenture.com
Mudeita Patrao
Lead – Banking, Financial Services,
Accenture India, Tel: +91 98 2030
5179, mudeita.patrao@accenture.com
Madhu Vazirani
Lead – Financial Services Research for
APAC, Growth & Strategy, Accenture,
Tel: +91 80 40526867,
madhu.vazirani@accenture.com

Survey Research Team

Charlotte Raut (Global Survey
Research Lead) with Carmen Uys

Copyright © 2010 Accenture Disclaimer About Accenture

All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
This Report has been published for
information and illustrative purposes
only and is not intended to serve as
advice of any nature whatsoever.
The information contained and the
references made in this Report is in
good faith, neither Accenture nor any
its directors, agents or employees
give any warranty of accuracy nor
accepts any liability as a result of
reliance upon the information, advice,
statement or opinion contained in
this Report. This Report also contains
certain information available in public
domain, created and maintained by
private and public organizations.
Accenture does not control or
guarantee the accuracy, relevance,
timelines or completeness of such
information. This Report constitutes a
view as on the date of publication and
is subject to change. Accenture does
not warrant or solicit any kind of act
or omission based on this Report.
Accenture is a global management
consulting, technology services
and outsourcing company, with
more than 190,000 people serving
clients in more than 120 countries.
Combining unparalleled experience,
comprehensive capabilities across all
industries and business functions,
and extensive research on the world’s
most successful companies, Accenture
collaborates with clients to help them
become high-performance businesses
and governments. The company
generated net revenues of US$21.58
billion for the fiscal year ended Aug.
31, 2009. Its home page is
www.accenture.com.

ACC10-1148 / 02-1569