Shalini Warrier- ED, Federal Bank, in conversation with Adrian Johnston, SVP-Applications, Oracle JAPAC.
Q: Federal Bank has done some remarkable transformation on the customer experience front, can you just share a little bit about banking industry environment, and the involvement of the CEO and the top management in a project, as big as this?
Ans: This is really about a business case. this is about making sure we are delivering value to our stakeholders, whether they are customers, whether they are employees, whether they are investors, shareholders, regulators, the all the entire spectrum of banking context. While most of the readers would be aware about banking in India, but I am just kind of highlighting some of the key tenets that are driving the banking experience. first of all, banking is become fairly commoditized. actually, there is very little in terms of product differentiation, and what's really making a difference, therefore, from a customer standpoint is the user experience or CX. CX is really what's driving the preference that customers make towards their banking partner. That's one aspect Customers are becoming absolutely more demanding. They expect the ease and convenience of a Swiggy or an Uber or an amazon with their financial partner providing them banking services. but at the end of it, they also do want the safety and security of a bank. So it's a little bit of a dichotomy, as a customer I want convenience of being able to buy a financial product in the same way as I buy things on Amazon, but I also want the backing of a bank, so that's the second uh kind of aspect. Fintechs are becoming a very large part of the ecosystem in India, as well as worldwide i mean, Fintechs in lending, deposits, and payments, etc. We know very well that it's google pay and phone pay that has the largest market share on payments in India. so our traditional competitors are no longer the competitors. we've got the Fintech too coming into the ecosystem, and there is overarching fact that margins are declining. the, you know, the straits between lending, and the positive thing is that going to be able to uh background have to find ways and means to make sure that we optimize costs, so that's really where banking is. From the perspective of Federal Bank, well, it’s a leading private sector bank in India. The last few years we've been growing very rapidly. we are one amongst the top few private sector banks. Now in India, we were competing extensively with the other private sector banks in India a couple of years back, they identified a key gap in our capabilities while we had branches, we had the mobile banking, the internet banking etc, we just recognized the fact that there is a gap in our ability to deliver a holistic experience to the customer, in our ability to tie all of this together to come as a unified face. so we commenced an exercise to review what exactly would help bridge that gap as we grow bigger, expand into more social media and digital marketing, et cetera. and after an extensive exercise with we chose Oracle as our partner for next gen CRM solution, and we call is Cx CoE, customer experience centre of excellence. This is a huge part of our strategic commitment to bring sales service, marketing, all of them together. so that when we go back to the customer and whether it is in the form of our branches interacting with the customer, whether it's the form of our mobile banking platform or internet banking platform, or our presence on social media at the end of the day, we are here to provide a highly personalized experience We do believe that with the Cx CoE, we will be able to get this across not just once, but multiple times, not just from one platform. There are illions of interactions on social media, how do we get that personalized experience? so that's really the background to why CX CoE is important, and why it is something that is driven literally from the top, not just the MD & CEO, but the board of directors have been involved.
Q. What sort of advice would you give to people if they were thinking about this kind of digital transformation, how much time it is from an executive standpoint for organizations?
Ans: That's very relevant question to ask, and it's something that we've embedded within ourselves. I think it's got to come from the top. so you know, the way we approached it very clearly is, first of all, we have a board of directors, which consists of independent directors, et cetera. We ensure that the board of directors are involved in the selection of the final solution, the rationale for it is, and why we're going for it and they are heavily invested in the decision, and actually spend once a quarter, they spend time at that level. I am the strategic sponsor for the project and that shows the organization’s commitment as a whole. It's not something that we have levels below, and that's where it's coming from. The accountable executive, which was picked and chosen by us and is a direct report into me in the structure, so it's not like hidden within some other unit. So we've got actually a team of people headed by a very senior person who's the accountable executive, who's devoted full time to the implementation. and the reason we've kind of invested in this is that our experience tells us, that we run a risk of this becoming a technology project. This is a people driven project, it is about people management. it is about making sure my twelve thousand employees understand what this is about, know how to use it, know what value to derive from it. It's about my three hundred contact centre agents being able to use this effectively. It's about my marketing colleagues. So for us, this is really about change management. this is about people, whether it's cloud, whether it's on premise, whether it's data structure this way that we will fall into place, we have no doubt about that with experts around. That's the reason why it comes to all the directors and to myself to say this is about change management and this is not a technology suggestion.
Q: True, a lot of people see some of these projects, just as a technology project, that you need to put a new system which underestimates what all an organization has to go through for such transformations. What are your thoughts on this?
Ans: I think, I'll probably put it in a way which says, what are the kind of pillars that we have taken up to embed CX at the heart of our strategy. So while I may have alluded to some of earlier too, the way we see it in the organization, there are three key pillars for us to embed CX at the heart of organization. You read our vision, which is to be the most digitally enabled banking, etc. having said that, I think it's digital at the fore and human at the core, what we really mean is, we are here to provide digital capabilities to the customers. We will ensure customers have the entire range of digital services. so you know whether it's mobile banking for retail, for a small, medium enterprise, or for a very large enterprise, we have capabilities that we recognize that federal bank is known for its relationship management is known for the warmth of human relationships with customers value; and therefore, as an example, what we've done is, we actually have a position called digital banking ambassador across the length and breadth of country and in each branch, we have somebody called the digital angel. Their role really is to handle the customer in the process. Let's not assume the customer knows how to use mobile banking or knows how to use internet banking. you need to help people to understand it. Some customers take to it intuitively, some customers take to it instinctively, but there are others who need handholding. so our philosophy that says digital at the fore, human at the core is kind of one tenet of CX. and you know, the whole solution around it, the second is what we call as branch tight- distribution heavy. If you go back in time for federal bank, we expanded our branch presence massively in these years. We grew from six hundred branches to about twelve hundred branches, and there was a good rationale for it. We were under represented in a lot of geographies, and India is a vast country, and therefore we were underrepresented, and therefore we made that investment in terms of branches. But having done the branch presence over the last five years, we've honestly got scared, not built. We've got very, very few branches in the last five years. we opened about eighty branches. and the reason we've done that is because we've turned it around to say, now we've got the branches. so let's go distribution heavy. so we invested in relationship managers. I'll give you the most recent example of what federal bank has done. We are the only bank, which has tied up with 2 neo banks, epify that has an app Fi and the other is Jupiter. The tie up is such that they provide front end customer experience and but we provide the entire range of banking services, whether it's opening a deposit when making a transfer, et cetera. and today our relationship with these two Fintech partners is a good example of how we've been branched lights and the distribution heavy. because these two partners together are getting us about three thousand accounts per day and our branches work uh an equal number. So you know, you just multiply the two x times to these partnerships. And that brings the second tenant of CX. And last but not the least, the data and I think we run one of the things most people end up with on data is this whole, um, you know, analysis, paralysis situation. so we are trying to guard ourselves against that. Its not just the effective use of data, it is converting the data to information and through that in insights. To give you an example, we recently launched our credit card proposition, and we started off by saying we could have base of customers who we think are eligible for a credit card. let's mine that data and use that data first before we go to new to bank source. so we designed the program, we did a lot of analytics to identify the right set of customers and then triggered off sms and emails to post customers with a digital experience of just three clicks. So if someone gets an outstanding offer, all they have to do is three clicks to not only get their card application approved but they also get virtual card delivered on their fed mobile app that can be used for buying things from amazon right away. So that’s the third tenet of data and how it’s used together with customer experience to deliver an effective solution to the customers. so in summary, if you look at it between digital and the fore, human at the core, branch light, distribution heavy and data converted into information, into insights, if these three tenants are taken into account and embedded, and CX is kind of overarching across offices, the whole work we're doing with oracle on sales, service, marketing, et cetera, is around these three tenants.
Q: So from traditional banking to fintech to innovation with data, it’s an overall innovative experience that you provide to your customers?
Ans: I would say, that has a multiplier effect. The fintech is a very good example. it's just given us 2X to what we were doing, through a completely digital means. It's, not a substitute for what my branches do, but it's kind of double what my branches do in terms of number of accounts. so that's an example. The kids/youth of today, they want everything on mobile, so you're actually also looking at a different segment that you can bring into your customer base.
Q: Its little early for that but how do define success, or that it’s helping us? Because it's not a project, with a start of stop timelines, It’s a journey that you're on, because things will continue to evolve, especially, the customer interactions and experience. So how do you think about making progress towards an end goal?
Ans: yeah, having invested the monies, time, mind space and energy, it’s certainly driven by certain business metrics. So at an overarching level, all of us are in the bank, are guided by the fact that our deliverable is to serve our investors. We need to deliver return on assets, return on risk weighted assets and so on. So, that’s clearly an outcome that we measure and monitor very carefully. How do I translate it into something at the second level in terms of the metrics is really around things like product per customer, which is close to my heart personally? It’s the rationale for the entire CX experience, because we got ten million customers. Are we selling adequately to them? We’ve got the entire suite of products; we've got a credit card. we got investments, we got insurance. we got all of that. But how am I improving my product for customer? how am i making sure that the customer is not just a savings account customer, but is also having a credit card, having an insurance product and health insurance. So this is something we measure across the base but we also do it for HNI, the salaried customer, for millennial customers and so on.
So while return on the assets is at the overarching level, at the end of the day it’s also about the next best product sold to the customer. So its about how many conversations are converted into leads, leads were converted into products etc, and we measure these very carefully and we have a dedicated team of analysts at our CX CoE.
Oracle is a strategic partner for Federal bank, providing comprehensive integrated Customer Relationship Management (CRM) solution across marketing, sales, customer service, and social listening to strengthen Federal Bank’s operations, and to deliver connected, data-driven, and intelligent customer experiences across all touch points.
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