What problems do commercial banks in the CEE region face in the field of sales and customer service?
CEE’s commercial banks – similarly to their European peers – find it increasingly difficult to differentiate from each other. Although there is still some reserve in sales, since the retail account, product, channel coverage is not complete but the difference between the profit rate of regional and European banks is continuously decreasing. Customers are less loyal to their banks even in this region compared to three to five years ago. It is hard to maintain product-based differentiation. Furthermore, technological drivers also force change: the internet generates transparency and it is revealed and spreads a lot faster if a service is not of appropriate quality. Banks operating in CEE shall also realise soon that real actions should be taken in the field of customer service and sales, and in the future the customer’s experience will determine the success of the bank.
As a consequence of the above, efficient and quality sales and service processes that bridge over bank channels shall be implemented in CEE countries with more developed bank systems as well. Thus Western European and CEE banks have to fight very similar problems in this field, since customers’ opinion about European banks is often that they are “impersonal”, there is no sufficient and appropriate information available to banks during communication with the customer, marketing campaigns do not target personal interests of clients etc.
What is the situation with branch networks in the region in comparison with other countries of the EU?
In Western Europe there is an apparent movement from the branch network towards electronic channels, although they still play a dominant role in both sales and transaction services. There are high expectations towards mobile solutions, which will predictably fulfill a serious role in communication between the bank and its customers.
On the contrary, a really significant lag must be made up in CEE countries, particularly regarding the density of branch networks. While there are 1,500 – 2,000 citizens for each bank branch in Western Europe (Spain is outstanding in this regard, there are approximately one thousand citizens for one bank branch), in CEE countries this is currently 4000-6000 persons/branch, indeed there are states where branch network coverage is even lower. It is also true that the branch network extensions currently being in process in CEE do not mean the same as earlier. Today commercial banks open diversified, more efficient branches that focus on certain products, services or customers, while a few years ago the opening of universal “large” branches was typical.
Opening branches along certain concepts is already spreading in our region as well: banks open branches that are similar to ‘shopping centres,’ ‘malls’ or ‘boutique networks’ and branch openings are preceded by serious conceptual planning and business case.
Can the alternative electronic banking sales and service channels used in CEE be compared to the solutions applied in the EU?
There is no significant lag between CEE countries and those in Western Europe in the field of alternative electronic channels, at least not regarding available banking services and solutions. Web2, mobile banking solutions and even mobile payment are gradually gaining ground. But unfortunately Internet penetration is not nearly as high in the countries of the region, as further to the West from us, but there is no measurable difference in the penetration of mobile phones, since coverage is practically 100 percent. The strengthening of sales activities is perceivable in case of all electronic channels.
What is the largest deficiency, the problem requiring a solution the most in the field of customer service and sales?
Primarily the lack of information about and to the customer hinders banks in being able to communicate with their clients in a targeted way. There are no banking front-end systems independent of channels, fully integrating processes, which could ensure that data and information characterising the customer and essential for the clerk/referee or the most attractive, customised bank offers are available at all times. There are no flexibly implemented, fully automated work processes that would increase work efficiency and could divert clerks from transaction and service activities to consulting services.
A lot of banking front-end or operative CRM-type projects have started in the region with more or less success in the past few years. Unfortunately, currently there is no application that meets all criteria: supports all bank channels in an integrated way, from traditional branches, through Internet solutions to third-party agents, and in addition, covers both traditional services (e.g. fund functions) and modern sales functions, furthermore, operates real time, in an integrated way with account management systems, background systems supporting analytical CRM functions, marketing and campaign support systems etc.
No wonder, that large application producers do not have total banking front-end applications either. I think the complexity of this problem reaches, if not exceeds, that of integrated account management systems. In addition, such systems shall have outstanding flexibility: it is currently apparent and expected in an even larger degree in the future that there is strong movement between channels, which must be generated very quickly (movements, such as the bank’s internal branch network vs. strategic cooperation with third-party partners; traditional channels vs.
electronic channels). Present SW suppliers only cover certain fields, channels or process parts with their systems, the integration of which is unfortunately not a simple task. It must be underlined that we are not only talking about IT integration here, but at least process level, or rather business level integration, also including organisational issues and motivation tools.
How can FMC-Ness Hungary assist banks in solving the above-listed challenges?
FMC is an independent technological consulting firm that may and does assist its bank clients in solving tasks in several fields. On one hand, we have a detailed picture of the multi-channel solutions currently possessed by each bank in the region and we are aware of the business/technological drivers, along which future changes are expected. We have also prepared an FMC CRM barometer, in which we evaluated the maturity of Hungary’s largest commercial banks in the field of sales and customer service based on a complex criteria system we established.
Thus we can assist our clients on a business strategic and conceptual level. The special strength of FMC-Ness Hungary (differing from specifically strategic advisors) is that we possess serious project implementation and information technology experience; therefore we always suggest practically feasible solutions to our clients. In most cases customers assign our firm with implementation, from functional and technical specification to go-live of the realised, implemented systems, also including organisational and regulative works performed in the project.
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