ITALY: Could analytics and social media provide a real change in banking, that boosts the economy and satisfies customers?
Banks are not the most popular institutions right now. But at the Banking Summit 2012 held in Milan, they were talking of decline and recovery, and addressing the changes afoot for banks – and the ICT companies that serve them and their customers.
Admitting that banks have a responsibility for the current situation, Victor Massiah, CEO of UBI, said that Italian institutions still face “a very tough year” and welcomed the prospect of new European regulations. The crisis appears to have two phases, said Samuel Sorato, general manager of Banca Popolare di Vicenza. In the second phase portfolios deteriorated, forcing the banks to demand greater liquidity and strengthen their capital system, a situation aggravated by the negative opinions of the ratings agencies about Italy.
If there is a solution, it is technology
These problems are not limited to Italy, of course, but readers of TechWeekEurope may wonder what this has to do with them. The answer is that these Italian bankers agreed that if there is any solution to the problem, technology must be involved, because it can help the banks to know their customers better.
“The current business models of banks are no longer sustainable: we must innovate through clear proposals, avoid the commoditisation of services while preserving the payments business,” said Piercarlo Gera, global managing director of Accenture Distribution and Marketing Services.
Customers’ priorities are changing and big data and analytics are the only way to keep track of them, he said. “The multi-channel bank must use custom analytics to optimise services for individual customers, with attention to a social CRM [customer relationship management] strategy to build relationships with customers. This is the path to the future.”
“Do you think that Italian banks know their customers well?” the 400 delegates were asked. Three quarters (75.7 percent) said no. And 70 percent thought the churn rate (the number of users switching banks) would go up in the next few years.
A lot of beliefs about banks are just myths, said Accenture , and they could debunk them with better use of analytics to optimise their services, so the multichannel bank can find ways to make customers satisfied and profit from them.
Banks are becoming more accessible, and it is technology that helps overcome the physical limitations of the banks – opening in the holidays, increasing mobile services, and making more use of financial advisers, for instance.
The reality that comes with this is that physical branches will close – in Italy around 20 percent are expected to go in the next two years, as banks work out a new integration between their physical network and their connected customers.
As we find in the UK, banks are responding to criticism that they are no longer lending to startups. Again, part of the answer will be technology, and the summit heard examples of how it will help from around the world. The Iberian Bankinter makes strategic use of analytics for customer contacts, and American Express has used social networks to promote its “Small Business Saturday” and a Facebook application for a customer experience called “Link, Like and Love.”
In short, Italian banks heard that they must redesign their models and streamline their branch networks, reshape their marketing campaigns to better understand customers, retain customers through the widespread use of analytics, and use new technologies such as cloud computing to streamline and simplify processes portfolios.
It’s a message that banks elsewhere could do well to consider.
Euro Story: each week, TechWeekEurope will publish a selected story from across NetMEdiaEurope’s network of European sites. This week’s story by Emanuela Teruzzi is from ITespresso.it. It was translated and localised by Peter Judge