Digital Transformation of

Banking Services

CUSTOMERS ARE IN THE DRIVING SEAT:

KNOWLEDGE AND SERVICES AT THE POINT OF
DEMAND IS A NECESSITY
 Introduction

 In today’s digital economy, businesses increasingly

realize:
 knowledge is their ultimate sustainable edge,
 customers are their key assets, and
 customer satisfaction is a vital part of best business practices.

 If enterprises know their customers, understand what they

really want, and can provide superior services - they can have
unmatchable loyal customer base and profitability.

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► You are a customer and imagine that the provider understood:
 The products that are most relevant to you
 The price you are willing to pay
 The most effective way of communicating with you
 The level of service and support that you expect, and your preferred channels
 Their value to you and your value to them
 What it would take to increase your loyalty

► If the provider not only knew this knowledge, but also willing and
able to readily, consistently and effectively act on this knowledge?

► You would have an optimal shopping experience - every time!

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 Drivers of Business

 Are we conducting the businesses the same way as businesses

were conducted in 1950 ?

 Drivers of business gradually changed over the years

Driving force: rapid technological change and informed

customer base

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Emergence of different business Drivers

Time (Decades) Emergent Forces

1960s New products

1970s Low-cost manufacturing

1980s Total quality management

1990s Customer relationships and

one-to-one marketing

2000s Knowledge-supported
relationship management and
e-business

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A Few Trends that are transforming face of businesses
and putting customers in driving seat

 Knowledge Centricity
 Accelerated Clock-speed
 Information Symmetry, & Knowledge Asymmetry
 Low Switching Costs, Lock-ins, and price Discovery
 Products as Experiences

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 Knowledge Centricity

 In digital economy, almost everything is knowledge

based

Nonphysical goods (news, software) and services (entertainment,

consulting, design, distribution) depend on knowledge for their production
and distribution.

Physical goods (medicine, computers, airplanes) have knowledge

embedded in their design, production, and delivery.

Knowledge and relationship assets of e-businesses such as Amazon.com

and eBay have led to their higher market valuations.

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 Accelerated Clock-speed

 Managers can not afford to pace themselves any

slower than Internet time.

 Businesses must have real-time access mechanisms

to apply knowledge across the value chain and
integrate it to interpret and respond to business
changes - technological, environmental, regulatory,
or customer related

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 Information Symmetry, & Knowledge Asymmetry

 Customers have access to information (through web and other media)

 As information asymmetries gradually disappear (on-line booking, for example)

– information by itself does not provide business advantage

 Knowledge management asymmetries – differences in how the

businesses assimilate knowledge and actually mobilize it – then
differentiate the firms

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Low Switching Costs, Lock-ins, and Price Discovery

 Low switching costs

Reasons: perfect information availability and
commoditization of products (become undifferentiated,
substitutable)

 Relationship and intimate customer knowledge

creates customer lock-ins
Relationship counteract commoditization by differentiating it from other similar
products/services

 Creating such lock-ins requires thorough

knowledge of a business’s customer base and of
the independent processes that serve them

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 Products as Experiences

 Products and services are increasingly being defined

as experiences rather than their tangible selves.
Associated services have become more important
determinants of value than the product itself

 Businesses are increasingly codeveloping products

with their customers: Del, Levis for example

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 Imperatives to the changed face of business

 Challenge begins once customers are onboard: retaining

them, expanding their business, and keeping them coming back for
more.

 Competitive strength comes from

Integrating and turning customer and channel knowledge

in action

Forging strong relationship with customers and channel

partners

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 Benefits of Superior survice

 Superior service leads to satisfied customers

 Satisfied customers lead to referrals, and
 Referrals are the most effective way to build an unmatchable
customer base

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Costs of Bad customer service to business

 Churn of Current customers

 Loss in the number of potential customers
 Loss in the number of future customers
 Bad reputation
 High rate of employee attrition

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 Conclusion

 Relationships and knowledge are the key assets of the

digital economy,

 Rewards are reserved not for those who have the most
knowledge but for those who actually use that
knowledge to rethink, recast, and even cannibalize their
own businesses.

 Loyal relationships are built by integrating, managing,

and applying deep knowledge of customers, markets
and business partner
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Thank you

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