Rebuilding Customer Experience for Banking and Financial Services

Rebuilding

Customer

Experience for

Banking and

Financial Services

IN THIS ISSUE:

Aegis Speak -

Customer

Experience Management in

BFS

Buzz Factor -

Updates on

the latest from Aegis and

the industry

Think Tank -

Interview

with Andrew Efstathiou,

NelsonHall

Case in point -

Bank of

Baroda-Improving CX by

automating CLM processes

Global Footprint -

About

Aegis, Awards, Recognition

and more...

Vol 10, 2013

Aegis Speak

Welcome to the tenth issue of our newsletter Insight.

This edition focuses on "Rebuilding Customer Experience for Banking and Financial Services" The global economic turmoil brought new laws and rules and regulations imposed upon the banking and financial services sector that is now leveraging value from customer service and experience. Globally, banks are seeing old loyalties challenged as customers show greater willingness to diversify their banking, demand better service, share experiences, and switch banks. Therefore, financial organizations are transforming the way they do business to stay in compliance while remaining competitive on customer service. For example, as banks encourage customers to manage their accounts online, they are also available for answers to questions and provide technical support within the same forum. Live chat or mobile banking is as important to the online customer experience as the teller is in a branch. With financial institutions being innovative in their marketing and business model in a digital environment, they are also engaging personal relationships with their customers, across every touch point. At Aegis, we believe in enabling Banking and Financial services organizations to garner all their resources to focus on delivering delightful customer experience. To re-build the customer-bank relationship, an opportunity exists for banks to align their priorities around what their customer cares about most. This would encompass moving forward with new technologies and multi-channel capability, but the key is to build out Customer

Experience Value Chain in a way that demon-strates a customer centricity.

Aegis Banking and Financial outsourcing services offering provide a perfect suite of solutions for a full spectrum of financial services companies including credit cards, insurance, mortgage, banks, loan providers, collection agencies, online brokerage companies, risk management firms and investment consultancies.

Financial institutions need to be aware of the areas that will witness increased outsourcing going forward so that they can adapt to the emerging outsourcing opportunities in an agile manner. In the Think Tank section, Andrew Efstathiou, Director of NelsonHall’s Banking Sourcing Program reiterates this idea and shares his thoughts on upcoming trends in outsourcing in the BFS sector and their implications for financial institutions and service providers.

Case in Point features, our partnership with Bank of Baroda where Aegis has demonstrated its ability to customize implementation to suit client requirements. Aegis helped the bank automate crucial Customer Lifecycle Management processes to improve customer experience and enhance value.

Also in this issue, Buzz Factor which updates you on the latest happenings at Aegis and in the industry.

We hope you enjoy reading this edition of Insight and look forward to your suggestions and feedback for the newsletter and its content.

Buzz Factor

AEGIS BUZZ

Aegis-STC joint venture bags HR outsourcing contract

Contact Center Company (CCC), the Aegis-STC joint venture, has bagged a multi-million dollar HR outsourcing contract from Saudi Telecom Company (STC). Under the contract, CCC will be responsible for providing recruitment and HR process outsourcing services for over 1000 employees of various STC business units. The scope of the contract includes recruitment, reward and core HR administration, learning services covering content sourcing and development, program planning and delivery, learning system hosting, payroll administration and management. The engagement will introduce a series of HR process improvements focused on enhancing user experience. CCC has also won six new clients across multiple verticals including media, government, BFSI, healthcare, travel and hospitality.

Aegis recognized as a Leader in the IDC MarketScape: Worldwide Customer Care BPO Services 2013 Vendor Analysis

The IDC MarketScape report on World-wide Customer Care BPO Services 2013 Vendor Analysis - Leveraging the Four Pillars to Modernize Customer Experi-ence has recognized Aegis as a leader in this space. IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of IT, telecommunications, or industry-specific suppliers in a given market. This report represents IDC's opinion on vendors currently well positioned through capabilities and which are in a favorable situation to gain market share over the next few years. IDC highlights Aegis' diversified vertical portfolio and customer experience led approach as the key strengths that position Aegis as a Leader in the IDC MarketScape study.

Aegis expands in North America

announced plans to hire 5,000 employ-ees at its US and Costa Rica centers. The company has also enhanced partnership with clients across Banking and Finance, Healthcare, and Energy verticals. The Indo-American Chamber of Commerce (IACC) recognized Aegis as the Overall Best Company and Best Company in the US in the Innovation category at the 9th Indo-American Corporate Excellence Awards ceremony held at Mumbai, India. Aegis has been acknowledged for its significant investment in Customer Experience Management.

Industry Buzz

US Banks and mortgage companies outsourcing backend processes to India

As U.S. banks struggle to maintain margins amid growing regulatory demands, regulators in the US are tightening the mortgage verification process. Banks and mortgage companies have started to outsource part of the burdensome processes involved in mortgages management and processing foreclosures to third-party vendors, so that they could focus on their core business objectives instead of the tedious task of mortgage

processing. According to research firm Horses for Sources, Indian BPM providers are expected to make a business of $316 million in 2013 which is double the revenue from such programs in 2009.

Source: Wall Street Journal

Asia Pacific to drive growth in the BPM industry

According to Frost and Sullivan, outsourcing industry in APAC (currently 39.6% of the total market size) grew at 8.4 per cent in 2012, relatively higher than in other regions. It would continue to grow at a similar rate, if not more as the Asia Pacific BPM market is still relatively underdeveloped. The growth was driven by flourishing domestic markets and strengthened by the

Source: Frost and Sullivan

NASSCOM projects $50 billion revenue from BPM sector by 2020

The National Association of Software and Services Companies (NASSCOM), a trade association of Indian IT and BPM industry has set a goal of achieving $50 billion in revenue from the BPM sector by 2020. In a step towards achieving this vision, NASSCOM recently announced the launch of the Business Process Management (BPM) Council. This council will work to re-brand the industry from BPO to BPM and also create segments that Indian companies can dominate in higher value areas such as FAO, analytics, domain and multi-channel customer service.

Sandip Sen, Global CEO of Aegis is a member of NASSCOM’s BPM council. Source: NASSCOM

Think Tank

Expert Interview with

Andy Efstathiou,

Director, NelsonHall

Banking Sourcing Program

Andrew Efstathiou is the Director of NelsonHall's Banking Sourcing program, and has extensive experience as a banking and financial services

practitioner. He has global responsibility for the development and delivery of NelsonHall’s research and advisory services into banking processes and the applications of business process outsourcing. He is a frequent guest speaker & lecturer and has appeared on many TV and radio news programs internationally, written numerous articles for, and been interviewed by, many leading publications, including Forbes Magazine.

Andrew Efstathiou holds a bachelor’s degree in economics from Harvard College and a master’s degree in business administration from Stanford.

What are some of the big trends in Banking and Financial services BPO do you expect to see in the next 5 to 10 years?

We expect to see a transformation in the type and scope of processes managed by outsourcing service providers. Specifically,

In the current economic environment characterized by stringent and complex regulations, how has the outsourcing landscape changed for banks and financial institutions?

The downturn in the global economy saw new laws, rules and regulations imposed upon the banking and financial sector across the globe. While intending to create greater trust in the marketplace, compliance with these regulations added complexity to customer facing processes and transactions. The key challenge for Banking and Financial companies is to adhere to the new rules and regulations without compromising service levels, and customer. Therefore enterprises are seeking partnership and alliances to offer an OPEX based business model

comprising pay-as-you-use options which is more economical. This will enable banking and financial institution to avoid capital expenditure associated with setting up the necessary IT infrastructure to ensure regulatory compliance. However, banking and financial organization would now be extremely meticulous in selecting an outsourcing partner due to increased banking regulatory and compliance laws.

How crucial do you think monitoring and ensuring uniform customer services across all touch points could be for an overall customer experience, especially for banking and financial services outsourcing service provider?

In a scenario wherein product lifecycles are shrinking, the end-user experience will be the only product differentiator for customer retention, brand loyalty, and increased customer lifetime value (CLTV). Therefore it is extremely critical to provide consistent customer experi-ence across multiple channels, segments and markets. Two key reasons to ensure consistent customer service would include:

Enhanced focus towards transaction based processes (e.g., payments, securities trade execution, etc.):

Capital charge for market risk has spurred financial institutions to increase transaction business and reduce risky business activities (lending, proprietary trading). The major chunk of this business would

come from transaction based process management, especially in the areas of mobile payment, and social media/multi-channel customer contact management, where banks do not have a legacy operations infrastructure.

Risk business gaining traction: In many cases, financial institutions would be reducing focus on lending based services; however, there would be traction in mortgage process management and

transaction processing. In the past 18 months, there has been a paradigm shift from cost-savings to increased focus on identifying additional avenues to variabilize cost. As a result, there would be a strong demand for complex analytics based services such as trade finance (trade Letters of Credit) process management.

Support for new market Penetration:

Global financial institutions are increasingly focusing upon expand-ing across fast growexpand-ing consumer markets such as Africa, Asia Pacific and Latin America in order to tap the increase demand for banking products and services, leverage increase consumption pattern, maturity of end customers and widen their customer base. To achieve their corporate goals, banking and financial corporations would constantly look for an efficient partnership to reduce capital investment. Going forward, outsourcing service providers will support banking in emerging markets while they have primarily supported mature markets till now. Global standardization and customer experience:

Customer experience and standard-ization in products and service delivery will increasingly become key competitive advantages for clients and a differentiator across the banking and financial services industry. Financial institutions would increasingly rely on their partners to drive global business standardization

and consistency in experience delivered to end consumers across home markets as well as

geographies where the institution has a presence.

Matching up to the global trend, clients are increasingly looking to expand their product portfolio

towards value-driven offerings which would require support to provide consistent and reliable customer service. The feedback from the end user banking customers also highlights a need for a clear, transparent banking benefit – to put the Customer First to avoid

inaccurate information and further penalization from the regulators.

Customer Lifecycle Management:

Customer Experience and Customer Retention are increasingly been leveraged as a strategic tool for improved Customer Lifetime Value, create new business niches in mature markets. This demand for proficiency in managing all customer touch points on behalf of a brand and its expertise in compliance with regulatory to improve customer resolution, retention and new acquisition.

would require support to provide consistent and reliable customer service. The feedback from the end user banking customers also highlight a need for a clear, transpar-ent banking benefit – to put the Customer First to avoid inaccurate information and further penalization from the regulators.

Customer Lifecycle Management, Customer Experience and Customer Retention are increasing been leverage as a strategic tool for improved Customer Lifetime Value, create new business niches in mature markets. This demand for proficiency in managing all customer touch points on behalf of a brand and its expertise in compliance with regulatory to improve customer resolution, retention and new acquisition.

Derivatives: The derivatives segment will see tremendous growth in emerging economies. Therefore, outsourcing service providers will expand presence in emerging markets for they support in this sub-vertical. I do not anticipate much growth for derivatives or for derivatives BPO in mature markets. Mortgage services: In the short run mortgage services management will grow faster than the overall banking and financial services BPO landscape. However in the long run, mortgage BPO will reach a

saturation point due to financial institutions focusing less on the lending side of the business and therefore record slower growth than the overall outsourcing market.

Credit management: These services will grow at a consistent rate within the banking sector. However, as corporations have so far refrained from outsourcing this process on a big scale, the demand for credit services would grow at a much higher rate than overall BPO services sector. However, most of the growth in the overall BPO sector

Of the several sub-verticals in the BFS BPO sector such as derivatives, mortgage services and credit management etc., in which

sub-verticals do you, expect to see fast growth?

There would be an exponential growth

There is a lot of focus on CX – Customer Experience, what is your advice to outsourcing service providers trying to excel at this?

Banking and financial services enter-prises were particularly immune to a one way dialog with their customers. Their interaction with customers involved limited listening, socializing and adapting to end customers’ demands. Going forward, BFS organizations are focusing on multi-channel customer experience management, R&D services, analytics and technology based services. Banks are now adapting to a two-way dialog with end customers along with an emphasis on anytime, anywhere and any-transaction. With a clear focus around customer experience and advocacy banking and financial institutions are now considering social and digital media as a method of engaging with end customers to drive business. However, there would always be an increased emphasis on providing value to customers by leveraging emerging technologies such as analytics, social and digital media, automation, and self-service through multiple channels.

Case in Point

Aegis and Bank of Baroda:

Heralding enhanced customer

experience

The Client

Bank of Baroda was established in 1908 and has been operating for more than a century across 25 countries. It is a leading public sector bank and the second largest bank after the State Bank of India. Their branches span geographi-cal and cultural boundaries as well as rural-urban divides, with customers from a wide spectrum of segments, industries and backgrounds. Bank of Baroda serves over 45 million customers across a wide range of consumer and business-banking products and services.

The Business Challenge

New compliance regulations required that all banking organizations establish a customer contact center to manage and improve their end user customer experience and provide crucial informa-tion promptly and accurately. In addiinforma-tion, majority of the BFSI organizations were investing in greater automation, technol-ogy and customer records based platforms to facilitate a holistic customer records and service. By virtue of its size and scope, an automated operations system for Bank of Baroda would require significant investment in terms of both technology and manpower.

The client had a vast customer base across the country, making it a challenge to maintain customer processes and records from an internal centralized unit. Another issue was that Bank of Baroda had amassed reams of data and created multiple versions of several products. This made the creation of a single database a top priority and the client was looking at conducting this engage-ment in phases to impleengage-ment and integrate technology and customer support operations effectively. The Bank of Baroda required a capable partner with the domain expertise and the technical know-how to create a more consolidated product and service database for expansion and penetrating new rural markets.

Looking to address this, Bank of Baroda therefore entered into a 3 year strategic agreement with Aegis for assistance to set up a contact center and to streamline and integrate its various processes and systems, providing automation as necessary.

Aegis’ Solution

Aegis carried out the overall engagement with Bank of Baroda in three phases across 2 locations in India – Lucknow and Baroda. During phase 1, Aegis monitored end user-ability experience patterns through understanding the existing customer support or enquiry value-chain on the Bank’s website and in the branches. The idea was to gauge the customer experience landscape and identify the most commonly used processes, depending on technical feasibility. Aegis in collaboration with the Bank identified customer contact channels and processes that would most benefit from automation – such

consumer mobile banking, customer management outsourcing, credit card services, loan and mortgage queries, etc. Post this stage, Aegis set up a team of around 35 contact center professionals within client’s premises to synchronized internal customer management

processes, understand brand values and align with the banks Customer experi-ence management mandate.

This helped automate crucial processes and impacted various consumer banking touch points.

Customer Lifecycle Management services offered under this included: Consumer and Retail Banking - Account and enquiry management Card and Credit Services

Educating end user on clients products and services Loans and Mortgage services Branch Banking assistance

Given the focus on customer centricity from the client and consumer norms in India, Aegis brought to the table rigorous risk, compliance, best practices and security audit processes, in order to adhere to compliance standards for customer information security. The scope has also expanded to over 200 experts to provide a unified customer experience across segments.

The entire engagement was envisaged as a three-year project and was further scaled to include collections and other multichannel customer management outsourcing engagement. Eventually, Aegis began handling a bigger chunk of the Bank’s operations such as NRI Relationship Management, Lead Management, Close Looping activities and Inbound NRI services. This impres-sive and rapid scaling up of operations further raised the project count to include 400 employees. Aegis’ partner-ship and ownerpartner-ship of critical banking activities was crucial for Bank of Baroda to achieve its target of becoming India’s #1 Public Sector bank.

Phase two and three of this engagement was yet to come to fruition and Aegis had outlined a plan to set up web chatting, recovery, soft reminder, welcome calling, and E-mail support among other initiatives.

Benefits

The client is a large Public Sector Bank across India and Aegis had to be fleet footed to ensure quick and sustainable service delivery. The Bank’s engagement with Aegis also provided several other benefits listed below.

Customer response has swelled from 200 contacts a day to 25,000 contacts while defects per Contact is at an average of 0.02% against the target of 0.25%

Comparison of call volumes for the first quarters of 2012 and 2013 show a definite upward trend (3.2 vs. 13.04 lakhs respectively)

More holistic view of each customer, allowing targeted cross- and up-selling opportunities, better leads for loans, and launch of netbanking services due to the integration of various legacy systems.

Compliance with stringent customer security and audit requirements, as mandated by the RBI.

Reduction in the turnaround time (TAT) for various processes by arriving at an approximate time for performing each process.

Integration of services that helped in the launch of the Bank’s net banking services, which was one of the most popular customer offerings

Global Footprint

Awards Section

Indo – American Chamber of Commerce acknowledge Aegis as the Best Company in USA 2013 and Best Indian Company in USA under Innovation category

Aegis’ Engagement with British Gas Recognized at UK’s NOA Outsourcing Professional Awards 2013

Aegis Receives Frost & Sullivan’s Product Differentiation Award for Unique Social Media Engagement Solution - Aegis LISA Aegis Ranked Amongst the Top 12 on IAOP’s 2013 Global Outsourcing 100 List

About Aegis

Aegis is a global outsourcing and technology company committed to impacting clients’ business outcomes by focusing on enhancing customer experience across all touch points and channels. Aegis was founded 30 years ago in the US and now has operations in 56 locations across 13 countries with more than 55,000 employees. Aegis services over 300 clients from verticals such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel & Hospitality, Consumer Goods, Retail, and Energy & Utilities. The company is wholly owned by Essar, a USD 39 billion conglomerate.

For more information, write to us at info@aegisglobal.com or visit www.aegisglobal.com.