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How Can Banks Rise to The Omnichannel challenge?

Banks should follow in the footsteps of other innovative consumer-focused industries to deliver an omnichannel banking experience that is relationship-focused, interactive, relevant and personal.

Never has technology accelerated changes in consumer behavior so quickly that whatever is cutting-edge today becomes tomorrow’s status quo. And, consumers’ expectations of digital services and platforms change even more rapidly.

For example, consumers are no longer completely satisfied with having content available digitally and on demand; they want personalized suggestions specifically tailored for them. And why shouldn’t they? They expect the same from their social media platforms, where personalized ads are as familiar now as they were once disconcerting.

In fact, today’s mobile-first society enables conversationalist on a scale never seen before, which has transformed consumer habits – from how they spend their free time to how they plan vacations, where and when they shop, and even how they manage their homes.

New age banking

Banking customers are no different when it comes to managing their money. They expect to access their information, and perform an ever-expanding list of banking actions anywhere, anytime and on any device. They expect their bank to meet their individual needs and preferences in the same way that their media streaming service or favorite big tech company does. With these expectations, they’re challenging what banks do, why they do it and how it’s done.

Large-scale changes in the banking landscape mean that consumers are spoil for choice, and recent studies indicate that many would even consider going over to the competition – including to non-traditional players – if their current providers fell behind in service delivery and no longer met their expectations.

Meeting customers’ expectations no longer hinges on a omnichannel strategy per se. Although multichannel banking has been around for years, it is no longer ground-breaking and certainly does not provide a competitive advantage. What can give banks the edge, however, is taking stock of their various channels and strategically considering how their customers use them, and what this reveals about their preferences.

Taking lessons from retail

Traditionally, banks spend much of their time and effort ensuring accurate transaction processing, but they’re starting to recognize that there are valuable lessons to be learnt from industries, like retail, that place a strong emphasis on customer experience. Some of the world’s top-rated banks understood this years ago when they were still considered challenger banks. They succeeded in turning customer experience into a competitive advantage that resulted in increased market share and remarkable customer satisfaction rates.

For the retailers known for their customer-first perspective, it is their store of data that gives them the edge over their competitors. They know that every time a customer searches online from their computer or mobile device, or calls the customer service department, that customer leaves a digital trail. This data-rich trail leads to a more intimate understanding of that customer and therefore what it takes to provide them with more relevant services and offerings – the essence of contextual commerce.

Smart organizations recognize the possibilities that using data in this way opens up. Instead of having a handful of interactions with their consumers each month, they can establish meaningful, ongoing and highly personalized interactions every day.

Mobile-centric

Ensuring that these exchanges are truly valuable to customers is not always easy, especially when a bank must simultaneously balance factors like cost, legacy systems and competition. For many banks, a digital-first, or even a digital-only strategy, seemed like the answer. After all, digital channels have great potential in terms of cost savings and keeping up with the competition. However, research indicates that satisfaction levels among digital-only banking customers is significantly lower than among digital-centric customers, i.e., those that occasionally also use branches. So, while leveraging digital channels is a must for any bank, losing sight of the importance of branches, and the opportunity they provide to personally interact with customers, can be detrimental.

So, how can banks provide the level of service consumers demand, through the channels they prefer, while managing to offer a consistent experience across them all? Leveraging the mobile device, a universal tool that consumers always have with them, could provide the answer.

If the mobile device could be leveraged to securely identify a customer to their bank, it could become the ideal way to build confidence in sophisticated technologies. And even though the mobile device is a digital tool, it could also enhance the customer’s in-branch experience. For example, customers could use it to check in at a specific branch, authenticate interactions and digitally sign documents. A phone also delivers contextual information about a consumer, such as their location, which can initiate highly relevant and interactive dialogues at key moments. In this way, the mobile device can become the portal to the other channels – a trusted and familiar key to an omnichannel banking relationship.

True multichannel means more than just many ways

Today, banks are starting to realize that a true omnichannel approach to banking means more than just providing multiple ways for customers to transact. It’s about a thoughtfully designed, seamless and consistent interaction between customers and their financial institutions across multiple channels, with each channel complementing the others.

In the financial services industry, we’re still in the early stages of digital transformation. As Millennial and Gen Z consumers start to make up larger portions of the workforce, there will be countless changes in the ways they will want to interact with service providers like banks. To meet all these changing demands, banks will need to think about their multichannel capabilities, as well as the insights they can gain from their multiple consumer touch points, as a competitive advantage. In doing so, they can offer their customers the personalized experiences they have come to expect – no matter the channel.


About the Author

Frans Labuschagne, UK & Ireland Country Manager, Entersekt. Business Leadership and Management: Comprehensive international general management, sales and marketing management experience. Broad knowledge of the technology industry, especially financial services, enterprise software, and broad base of partnership management, with a focus on highly integrated solutions of management consulting, technology integration and application development.

Featured image: ©REDPIXEL

Source: How can banks rise to the Omnichannel challenge?

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The retail and supply chain industries are buzzing with strategies for succeeding in a multichannel marketplace: How do you give customers the choices they want on the channels they want, while fulfilling the order in a way that’s convenient for the customer as well as efficient and profitable for the retailer? Circling around this question, though, is yet a larger one –to protect your brand and reputation, how do you ensure a consistent customer experience across all channels? Executing your omni-channel strategy is easier said than done. In this video series, we invite retailers and grocers to think outside of the warehouse box about how to incorporate brick-and-mortar stores into the order fulfillment process. Watch to discover how businesses are implementing these techniques today to offer a seamless customer experience, reduce costs, and increase e-commerce profitability! Watch the full video series here: http://www.highjump.com/video-series-…

U.S. Bank Regulatory Easing Is Negative For Investors And Taxpayers

Storm clouds behind the exterior of the Federal Reserve building in Washington, DC

Storm clouds behind the exterior of the Federal Reserve building in Washington, DC

In a disappointing decision, the Federal Reserve Board announced yesterday that effective this year, it will limit its use of the “qualitative objection” in Dodd-Frank’s Comprehensive Capital Analysis and Review (CCAR). Under Dodd-Frank’s Title I, banks that are designated as systemically important are required banks to design a model using stress scenarios from the Federal Reserve. In order to pass the stress test, banks need to demonstrate that they would be able to meet Basel III capital and leverage requirements even in a period of stress.  It is in the qualitative portion of CCAR, that the Federal Reserve can identify and communicate to the market if a bank is having problems with its internal controls, model risk management, information technology, risk data aggregation, and whether a bank has the ability to identify, measure, control, and monitor credit, market, liquidity and operational risks even during periods of stress.  Easing this requirement, in combination with all the changes to Dodd-Frank that have been taking place since last year, is dangerous to investors, not to mention taxpayers, especially so late in the credit cycle.

Parts of the test that each firm is subject to this year in addition to the hypothetical scenario.

Parts of the test that each firm is subject to this year in addition to the hypothetical scenario.

*All firms subject to the qualitative objection, except TD Group, will have their fourth year in the 2020 cycle. TD Group’s fourth year will be the 2019 cycle.

According to the Federal Reserve’s press release “The changes eliminate the qualitative objection for most firms due to the improvements in capital planning made by the largest firms.”  Yes, there have been improvements in capital planning precisely, because there were consequences to banks which failed the qualitative portion of CCAR. Banks were prohibited from making capital distributions until they could rectify the problems the Federal Reserve found in the CCAR exercise.  This decision essentially defangs the CCAR qualitative review of banks’ capital planning process.

Nomi Prins

Nomi Prins

Dean Zatkowsky

“It is absolutely reckless of the Fed to relinquish its regulatory authority in such a manner, rather than retain the option of qualitative oversight, which has turned up red flags in the past,” said Nomi Prins former international investment banker. “We are after all, talking about what the banks deem a reporting burden versus necessary oversight that could detect signs of a coming credit or other form of banking related crisis from a capital or internal risk management perspective. Why take that risk on behalf of the rest of our country or the world?”

In writing about the Federal Reserve’s decision, the Wall Street Journal wrote that “Regulators dialed back a practice of publicly shaming the nation’s biggest banks through “stress test” exams, taking one of the biggest steps yet to ease scrutiny put in place after the 2008 crisis.” It is not public shaming. It is called regulators doing their job, that is, providing transparency to markets about what challenges banks may be having. Without transparency, the bank share and bond investors cannot discipline banks.

Just last month, the Federal Reserve Board announced that it would be “providing relief to less-complex firms from stress testing requirements and CCAR by effectively moving the firms to an extended stress test cycle for this year. The relief applies to firms generally with total consolidated assets between $100 billion and $250 billion.”

Christopher Wolfe

Christopher Wolfe

Fitch Ratings

Investors in bank bonds, especially, should be concerned about recent easing of bank regulations. Immediately after the Federal Reserve decision was announced yesterday, Christopher Wolfe, Head of North American Banks and Managing Director at Fitch Ratings stated that “Taken together, these regulatory announcements raising the bar for systemic risk designation and relaxed standard for qualitative objection on the CCAR stress test reinforce our view that the regulatory environment is easing, which is a negative for bank creditors.”  Fitch Rating analysts have written several reports about the easing bank regulatory environment being credit negative for investors in bank bonds and to  counterparties of banks in a wide array of financial transactions.

Dennis Kelleher

Dennis Kelleher

Better Markets

Also, a month ago, the Federal Reserve announced that it will give more information to banks about how it uses banks’ data in its model to determine whether banks are adequately capitalized in a period of stress.  In commenting on the Federal Recent decisions, Better Markets President and CEO Dennis Kelleher stated that “Stress tests and their fulsome disclosure have been one of the key mechanisms used to restore trust in those banks and regulators.  By providing more transparency to the banks in response to their complaints while reducing the transparency to the public risks snatching defeat from the jaws of victory in the Fed’s stress test regime.”

Gregg Gelzinis

Gregg Gelzinis

Center for American Progress

Gregg Gelznis, Policy Analyst at the Center for American Progress also expressed his concern about the Federal Reserve’s recent changes to the CCAR stress tests.  “While Federal Reserve Chairman Jay Powell and Vice Chairman for Supervision Randal Quarles have spoken at length about the need for increased stress testing transparency, this transparency only cuts in one direction.” He elaborated that the Federal Reserve’s decision “benefits Wall Street at the expense of the public. The Fed has advanced rules that would provide banks with more information on the stress testing scenarios and models. At the same time, they have now made the stress testing regime less transparent for the public by removing the qualitative objection—instead evaluating capital planning controls and risk management privately in the supervisory process.”

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I have been dedicated to providing clients high quality financial consulting, research, and training services on Basel III, risk management, risk-based supervision

Source: U.S. Bank Regulatory Easing Is Negative For Investors And Taxpayers

Avoid These 10 Public Service Loan Forgiveness Mistakes – Zack Friedman

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It’s no secret that student loan forgiveness is a hot topic. When it comes to Public Service Loan Forgiveness, in particular, the requirements can be tricky.

That’s why it’s critical to ensure you know the details and are not headed down the wrong path.

Here are the 10 most common public service loan forgiveness mistakes to avoid at all costs.

1. Thinking Public Service Loan Forgiveness is automatic

Nope. Thinking that you work in “public service” and are performing a “public service” job won’t cut it.

The Public Service Loan Forgiveness Program is a federal program that forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible federal, state or local public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments.

Those “eligibility” requirements bring us to our second common mistake.

2. Not completing the Employment Certification Form

 The number one thing you can do to ensure you’re on track for public service loan forgiveness is to complete the Employment Certification Form.

The next question is: how often should I submit the employment certification form for public service loan forgiveness?

You should submit this form:

  • when you begin a job in public service
  • when you switch employers
  • annually

It’s important to submit this form annually to keep the U.S. Department of Education aware of your employment to ensure you’re on the right track.

3. Submitting an Employment Certification Form with errors

This sounds like a no-brainer, but your employment certification form could be rejected if there are errors.

Here are a few common mistakes:

  • information on one form that does not match previous forms
  • missing information such as an employer address
  • not completing all the required fields
  • correcting errors on the form, and then failing to place your initials next to the corrected errors

This all may sound bureaucratic, but better safe than sorry.

4. Not having your employment certification form signed by your employer

Your employment certification form must be signed by an authorized official at your employer.

Make sure it is that person who signs the form, not the person who sits next to you at work.

5. Not enrolling in an income-driven federal student loan repayment plan

To be eligible for public service loan forgiveness, you must be enrolled in an income-driven federal student loan repayment plan.

Remember, only federal student loans (not private student loans) are eligible for public service loan forgiveness). You also must make a majority of the 120 required payments while enrolled in a federal student loan repayment plan.

While the 10 Year Standard Repayment Plan qualifies for public service loan forgiveness, your federal student loans would be paid off after 10 years so there would be no more student loans to forgive.

How do you know which income-driven student loan repayment plan is best for you? Well, it depends on your specific financial situation.

This public service loan forgiveness calculator shows you which income-driven student loan repayment plan will maximize your student loan forgiveness.

6. Forgetting to consolidate your student loans, if necessary

Remember, only Direct student loans qualify for public service loan forgiveness.

So, if you have Perkins Loans, FFEL Loans or you borrowed student loans before 2011, you may need to consolidate these federal student loans into a Direct Consolidation Loan.

How do you know if you have Direct student loans?

You can check at Federal Student Aid. If you don’t see the word “Direct” next to your student loans, then you may need to consolidate those student loans.

How do you consolidate those student loans?

If you decide to consolidate those student loans, you can do so through StudentLoans.gov.

7. Not taking advantage of Temporary Expanded Public Service Loan Forgiveness

Were you denied public service loan forgiveness because you were enrolled in the wrong student loan repayment plan?

Congress has set aside an extra $350 million of public service loan forgiveness for this exact situation.

8. Failing to re-certify your income each year

As the name suggests, your income-driven student loan repayment plan is based on your income.

As your income may change each year, the federal government wants to ensure that you are still eligible for that income-driven student loan repayment plan.

Therefore, make sure to re-certify your income each year at studentloans.gov. At the same time, you can submit your annual Employer Certification Form.

9. Skipping student loan payments

While your 120 student loan payments under public service loan forgiveness do not have to be consecutive, you need to submit each payment within 15 days of the due date for that payment to count.

10. Thinking your job is what qualifies you for public service loan forgiveness, when it’s your employer that matters

Remember, it’s your employer that matters, not your role.

If you work with a non-profit, but are employed by a private company, this would not qualify for public service loan forgiveness.

Now that you’re in the know, hopefully the path toward public service loan forgiveness will be smoother.

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