When it comes to banking, the term retail seems to have fallen by the wayside as technology, market segmentation and customer demand have changed the way banks do business. Personal financial services is the phrase of choice these days, with a focus on wealth management.
Counter transactions have dropped by 90 percent in the last two and a half years, replaced by internet, phone and self-service banking terminals. Bank halls, however, are no less busy. Their character has changed, moving from standard monetary transactions to personal financial planning. Mortgages, insurance, loans and investment products are sold on a daily basis.
"Personal financial planning reflects our role more these days," says Juliana Lam, senior manager regulated sales in the personal financial services area of the Hongkong and Shanghai Banking Corporation. "We are catering to customer needs by putting our wealth management strategy to work. Customers can have all their needs, from cash flow and savings to insurance and asset planning, taken care of by one financial institution."
Customer segmentation is key, Ms Lam stresses. Different customers have different needs and require different types of assistance. "Some customers don't want to talk to you. Some have no time to come in to the branch. Some like personal service. Based on customer behaviour, we can segment them and provide the personalised service they demand."
Customer segmentation is key
Technology is playing an important role in the banking industry, affecting both the customer and the financial institution. HSBC is a leader in Hong Kong when it comes to online banking, says Ms Lam. "Our Internet banking enrolment more than doubled over the past two years. We are continuously upgrading our IT systems and have put a new customer relationship management system into play."
"If a customer conducts a transaction at a branch, it is immediately reflected in the customer relationship menu at all the different branches, thereby allowing us to provide continuous service," she says. "The customer is no longer restricted to visiting one branch and can be very mobile."
Although roles and functions have changed in the banking industry, the number of personnel remains similar at HSBC branches - around 5,000 plus. The bank is losing staff through natural attrition and most new hires are now entering the sales stream. With an emphasis on sales, more training and continuing education is required. New banking regulations require staff to obtain relevant licenses. Customer communications and sales training are critical, says Ms Lam.
The front-line personnel at branches are the customer service officers. They need to analyse customer requests instantly and determine the right product or service. Since the bank floor environment tends to have limited privacy, personalised financial planning review meetings are scheduled.
Financial planning managers meet with customers, determine their financial needs, make recommendations and offer them a set of financial solutions.
Relationship managers, meanwhile, look after HSBC Premier customers with sophisticated portfolios who are seeking timely investment advice. These customers require a constant review of their portfolios, along with timely investment decisions.
Technological and staffing changes are mirrored by physical changes on the bank floor. According to Ms Lam, the branch configuration at HSBC has changed over the past seven to eight years, since the demise of the retail banking era. In the early days, a branch was designed to have a lot of space for back-room operations. The bank lobby was congested and most space was used for operations.
Shortly afterwards, customer service officers were introduced and platform service began. "We started to realise that people don't just come in to the branch for a transaction, but they also need other services," says Ms Lam.
The installation of more self-service terminals at branches has also changed the character of the banking floor. HSBC migrated operations requiring a lengthy processing time away from the branch to a central processing centre. This, in turn, made more room in the lobby for customer service. The sales area increased dramatically and now represents half the space on the bank floor.
Twenty-four-hour Day and Night Banking Centres were also opened, manned by customer service officers. These open and close later than normal branch hours in order to meet customer demand.
As bank customers become more mobile, relying on internet, phone and self-service, so has HSBC's sales team. Established over the past five years, a dedicated team visits customers at work or at home, during the week or at weekends. "Customers enjoy the personal service. Some like to visit the branch to see a financial planning manager, while others like the service to come to them," explains Ms Lam.
The HSBC sales team is armed with notebook computers loaded with financial planning tools. Customers can have their sales and investment portfolio managed in real time. In turn, the mobile sales force updates customer data and uploads it back to the main server within minutes.
Ms Lam foresees technology and mobility remaining the keys to future trends within the banking industry. Using a password and secure access, customers will be able to access everything from insurance policies, funds, prices and portfolios - further changing the constantly-evolving business of banking.