Emerging Trends in Retail Banking

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Emerging Trends in Retail Banking

Acknowledgement

This project was prepared with the kind assistance and support of many individuals both internal and external to the Bank who have contributed directly and indirectly in many ways to the successful completion of this exercise. Special mention has to be made to the following categories of persons.

Resource persons:

Internal

Ms. Nicole Brown - GOTD

Mr. Howard Gordon - GOTD

Mr. Kyle Lewis – GOTD

Mr. Lennox Channer – FCD

Mrs. Darcy Parkins – RBD

Mr. Garfield Palmer – RBD

Mr. Stephen Wyles - FCD

External

Mrs. Arlene Stephens – FISD, BOJ

Mr. Roderick Wisdom – IT Manager, Digicel Jamaica

Table of Content

Aim and objective

To improve top line revenue growth by identifying an additional source of fee while reducing the cost of serving the banked, under-banked and unbanked.

Emerging Trends in Retail Banking - The Global perspective

Customer
Customer demographics are shifting, making Generation Y and ethnic groups vitally important. More than 70 million strong , the Generation Y customer segment whose members have not yet reached age 30 is second in numbers only to the 80 million baby boomers. Generation Y is positioned to become the wealthiest generation to date, with a collective income that is expected to grow to $3 trillion over the next 10 years ( Brown et.al., Deloitte Center for Banking Solutions, 2008). In addition, further research conducted by the Deloitte Center for Banking Solutions and Harris interactive reveals that members of Generation Y have individual characteristics that make them a different breed of bank customers, requiring banks to employ different kinds of channel strategies to attract or retain them.

An important characteristic of Generation Y is practicality. Generation Y demands affordable, accessible banking and are not brand loyal, particularly relating to fees, convenience and online capabilities. Another characteristic of Generation Y consumers is that they view technology as a way of life, an extension of themselves. At the same time, they value direct interaction with people for some types of banking transactions such as answering questions, resolving issues, and opening an account. They also like to do their own research before making buying decisions, but they look to family and friends to support their conclusions, a tendency reinforced by their participation in social networking Web sites.

These characteristic suggest that Generation Y consumers are well-connected, multi-channel buyers who have high expectations for convenience, information, and service. To attract and retain them, banks must offer channels that are easy to navigate, that provide a consistent customer experience, and integrate seamlessly.

Indeed this evolution has occurred as a natural ongoing response to increasing complexity and sophistication of changing markets, economies, needs and expectations of customers as well as the technological revolution spurred on by the internet and globalization.   

Technology

New technology is gaining widespread adoption, allowing customer relationship management to become channel independent. Internet banking has received most coverage in the past decade; however, the adoption of new technologies may profoundly influence the distribution of retail banking services. One area of impact may be the movement toward greater mobility as mobile phone become more sophisticated and therefore, more capable of handling advanced applications and services. Banking via mobile phones appeals to consumers on multiple fronts. Customer may not know the location of their closest branch or even where their credit or debit cards are but they always have their mobile phones nearby. Mobile phone also serve as an efficient vehicle for...
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