Standard Chartered has begun rolling out digital banking solutions to more than five million customers in nine markets across Asia, Africa and the Middle East – claiming that it is the biggest roll-out of its kind for any international bank.
The move comes as the bank begins to invest $1.5 billion in ‘digital’, following a very disruptive time for the financial sector. Standard Chartered has faced poor to mixed results in recent years and is no doubt also feeling the pressure from digital-first banking start-ups, that are challenging the status quo for traditional players.
New CEO Bill Winters, who joined the bank in June last year, announced a turnaround strategy for Standard Chartered in late 2015 – the results of which we are beginning to see now with regards to the digital initiatives.
A key part of the November strategy stated that the bank would step-up its cash investments to “reposition the Group’s retail client systems and digital capability, to reposition its private banking and wealth management businesses, to upgrade the Africa franchise and renminbi services, and to enhance controls”.
It said that these investments should increase return on equity by more than 100 basis points.
CEO Winters said at the time:
The plans we have outlined today significantly reallocate resources to change fundamentally the mix of the Group towards more profitable and less capital intensive businesses. We are assertively managing costs to create investment capacity, reallocating capital to improve returns, and improving the Group’s risk profile.
This comprehensive programme of actions will result in a lean, focused and well capitalised international bank, poised for growth across our dynamic and growing markets in Asia, Africa and the Middle East.
These sorts of investments and programmes have been increasing in recent months amongst the international banks, with programmes focused on introducing new platforms and technologies to create efficiencies, reduce headcount and improve customer experience.
However, the results are far from validated and digital first banks are growing quickly.
Today Standard Chartered announced that it its new video banking platform will launched in Bangladesh, China, Hong Kong, India, Taiwan, Kenya and the UAE by the end of 2016. With video banking, clients will be able to speak to banking consultants over a secure video connection from a location of their choice, just using their laptop.
The bank said that the new channel should allow clients to do almost anything they can do in a branch via video, from signing up for a new card to finding a mortgage.
In selected markets, priority banking clients can use the video banking to consult ‘face-to-face’ with investment advisors to explore new wealth management opportunities.
Karen Fawcett, Standard Chartered Bank’s CEO for Retail Banking, said:
Video banking is about giving our clients more choice and more convenience. Now you don’t have to come in to a branch to talk to somebody face-to-face.
We are investing in technology that makes banking secure, simple and personal for our clients.
In addition to video, the bank’s retail clients – and prospective clients – will be able to connect with banking consultants through web chat and audio links on Standard Chartered’s website.
The announcement today follows the release of Standard Chartered’s ‘banking on an iPad’ sales-and-service tool, which was rolled out to eight new markets earlier this year. The tool lets clients open an account in any location and makes key banking services paperless.
Standard Chartered has also rolled out new mobile and online banking platforms to eight markets in Africa, bringing new digital channels to 1 million clients in the region.
In a recent slide deck shown to investors (see image), the bank outlined how it would be aiming to create an ‘end-to-end’ digital experience for customers.
By 2018 it wants to see paper based on-boarding reduced from 90% to 10%, turn around times reduced from 5 days to less than an hour, online sales increase from 10% to 30% and branch transactions reduce from 80 million to 40 million.
Standard Chartered hopes that these outcomes will also allow staff productivity to increase by 25%.
The financial services sector – particularly retail divisions – are facing an incredibly challenging time. Many banks are still crippled by ageing mainframe systems, data silos and creaking infrastructure that means that not only are staff productivity levels incredibly low, but the customer experience is horrible.
You’ve only got to look at the number of banking outages and customer complaints that have been experienced in the UK and further afield to realise that banks are not taking advantage of the new digital technologies available to them – or that they just don’t know how to get from point A to point B.
This is particularly difficult when you’ve got digital starter banks making challenges from every corner and all the banks are competing for the same resources. Which is why you see many of the larger financial institutions running their own incubators, in the hope that they can capture some of that talent and resource internally.
One thing is clear though – if they don’t get wise to the digital opportunity, they will fall behind. And to do that requires significant investment. That’s one thing that Standard Chartered does seem to understand.
Image credit - Images sourced via Standard Chartered