How to transform customer experience into bank’s key advantage

Mykola Chumak, CEO & co-owner at idnt
Mykola Chumak - CEO & co-owner at idnt

During Caucasus SME Banking Club Conference 2017 in Tbilisi Olena Gryniuk talked to Mykola Chumak, CEO & co-owner at idnt, about customer experience and future of branches for SME customers.

One of the key advantages of any company on the market now and it is relevant to banking as well, is a customer experience. Products do not play a key role anymore. Emotions and added value, which customer gets from a company when interacting with products or services are becoming important. How to transform such interaction with a customer into bank’s key advantage? What kind of technologies and solutions can help to implement it?

Yes, today experience became a product. You know these 4P’s marketing paradigm: Product, Place, Price and Promotion and today 4P’s has transformed to 4E’s: Product became an Experience. Customer buys experience, not a product. So, we can’t divide now experience and product. A place is Everyplace. So now we can buy everywhere. And this is a big challenge for banks to control offline and online channels. Now the bank branch or retail store is only one place where the Company can control 100% of everything: all operations, quality, feedbacks, environment. You can’t do the same with the same efficiency in any other channel, you can’t control something on 100% on the internet, because customers control, not you. And that’s why branches are on the top edge of the iceberg. And the next question is how to connect all these innovative services and new approaches from new online and mobile channels with the physical channels. That’s a great challenge and big topic for these days. Now we can use a lot of technologies inside the branch which help to improve customer experience; we can target specific customers with specific products in specific zones and make the services specifically targeted at any person. I think this is a future of branches in humanizing the digital experience in offline store.


Yes, actually we can see a trend now that companies are trying to synchronize digital and offline customer experience and digitalize offline customer experience. How does it work? Are there examples in the baking industry already?

Let me describe some technologies which banks are using right now. For example, Spanish BBVA is one of the most digital banks in the world, they operate worldwide, and they have a lot of digital services connected to their branches. Banks can use some applications to appoint meetings inside the branch; they can use these applications to navigate customer inside the branch and decrease the stress while using or learning about financial topics, they can connect self-service channels with offline channels. The greatest example we can find in Singapore, in DBS – one of the most developed universal bank in the world, and OSBC as well is highly developed in multichannel models. Other examples come from America: let’s look at Capital One – former ING Direct.

Now they are developing the concept for SMEs, for startups and young entrepreneurs. They are opening kind of cafes or coworking spaces. And the next good example is Idea Bank from Poland. But what question bankers should ask is what is the particular segment they work for because to build a coworking space is not a task and not a solution, you should develop space for the specific segment which is really valuable for that segment, because now the challenge is not about entertaining customers, you should be useful to the customer, you should educate him and give him a real valuable proposition, not just to entertain him. So, free coffee and wi-fi is not a solution; it’s hygienic part of standards, but not a solution. That’s why we can see now some banks from the US, Singapore or Hong Kong they are developing their branches another way, not as coffee shops or souvenir shops.

In your opinion, what are the best cases of branch design and customer experience in SME banking in the world? And maybe some good examples in CIS or Caucasus regions?

What I see I Caucasus region and particular in Georgian market is that banks are really trying to make that evidence of their strategy oriented on SME clients. And what we see in Georgia is specific branches for SME clients. That’s great. And another great thing is how Georgian banks are implementing this strategy in a low-cost way, they don’t spend much for these branches, they build these branches in the cost-effective ways, that’s why it’s a good idea to try some good approaches, to make some pilots to try new technologies but not to invest so much money as Singaporean or American banks do.

Bank of Georgia
Bank of Georgia promotes SMEs in its new branches: at the specially defi ned corners, Bank presents customers products

What is the first step to start such a transformation?

At first, you have to answer few questions. The first one is, do you have something to say to your customer, something new? Do you have new service model? Renewed brands? New products, new services, new technologies? Because if you have nothing to say to your customers, you will not receive any result from new branch design. The second – you should understand that any transformation projects are really expensive for any bank, because typically such kind of projects provoke a lot of other projects, for example, with HR – how to train staffin another way, in technologies and IT, in marketing, in real estate, so it’s a big challenge to transform even small things inside the branch. And the last one – do you have for this time and people. The transformational project is not a simple project.


Can you give us some examples on how exactly these changes in branch design can improve branch’s profitability?

Typically, we see an increase in 20-40% in any project. What we do in idnt we start any project from developing the service model for the bank. We never start from the design, because a design is not what the customer expects from the bank. So, the first what bank should do is to design the service model, how they will be servicing their clients, how they manage traffics of different segments, how much time customer spends inside the branch, how they connect physical experience with digital, and one of the features what bank can do inside the branch is about encouraging the migration to digital channels, so banks help their customers to learn more about digital channels and this is a role of the branch of the future.

I know you travel a lot and follow the latest trends in retail design and customer experience. You visited Hongkong, USA, and Europe this year. Can you compare the trends you found there and do they differ from region to region?

Yes, let me give you an idea of one of the trends in Hong Kong, for example. Banks and Insurance companies are trying to become a kind of life coach or a business coach to SMEs. They are talking to customers not on financial topics, but about how to develop their business or how to develop different spheres of their lives. And that’s a big challenge because banks to have expertise in it. But that is exactly what customer needs because SME customer wants to develop his business and not to buy financial products. Nobody is waking up with an idea to buy a financial product from the bank or insurance company, but they are waking up with the ideas of how to develop their business. So, great ideas come from different countries, and they are about how to be closer to the customer not only in financial sphere but a business area, how to understand the customer better and to be really closer to him. idnt is specialized on retail design, customer experience and helps companies to improve the efficiency of their point of sales in retail and banking industry.


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