How Omni-Channel banking fuels the rise of China’s middle class?

Banking is on the move. While the in-branch visit remains a pillar of the banking experience, more and more customers now choose to interact with their financial institutions via online and mobile banking, ATMs or phone chats with call center agents. And as they increasingly turn to these modern banking channels to check balances, transfer money or receive customer support, today’s sophisticated customer continues to expect the same level of seamless service.

For banks, integrating physical and digital channels into a streamlined system is about more than just optimizing the existing customer experience, however. By adopting a forward-thinking approach, these financial institutions also offer the advances of the modern banking industry to those who previously had no access. Nowhere is this more evident than in China, where the 150 million citizens now counted among the middle class—a number that is expected to triple over the next decade—are spread across the country’s 3.7 million square miles.

With a staggering 320 million retail and 2.7 million corporate customers, the Agricultural Bank of China set an IPO record ($22.1 billion) when it went public in 2010, yet it must continue to meet the needs of this ever-growing, upwardly mobile customer base with the kind of agility usually associated with a much smaller enterprise. And it has done so by embracing and deploying a range of advanced technologies.

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For banks such as ABC, technology helps to not only provide a high level of traditional services, but also to expand the range of services offered to customers—even those who have been unbanked in the past. In the case of ABC, a variety of Huawei solutions has helped drive the business forward. Limin Liu, Director, Financial Services Industry, Huawei Enterprise BG, explains that because Huawei is a relatively new player in the ICT world, it is less reliant on legacy technology and can offer a more nimble approach. “When we provide a solution,” he says, “it is open and connective.”

Extending the Branch

In 2013, only 36 percent of China’s population of 1.344 billion was unbanked, meaning ABC’s sheer number of customers can make the cost of setting up branches prohibitive. For that reason, it is important to provide convenient and ubiquitous access to banking services in non-traditional locations, such as residential areas, transportations hubs (like airports) and university campuses.

This is possible thanks to Huawei’s eSpace Virtual Teller Machine (VTM), a remote banking solution that concentrates customer services in the Virtual Teller Center (VTC), enabling real-time, face-to-face interaction between tellers and customers through HD video, no matter where they are located.

“This technology allows banks to create the equivalent of a physical branch that offers traditional banking services, but in virtual format,” Liu explains. In fact, a customer’s full-service experience can include anything from card issuance and payment transfers to wealth management and loan services.

The VTM remote bank solution also improves efficiency by allowing ABC to deploy staff and resources to a central service center, where they can be assigned to customers as required, rather than be tied to a specific branch location. This need for fewer specialists allows the bank to concentrate resources on high-value, high-profit sales.

Keeping the Bank Running

If a disaster of any kind strikes any bank’s data center, it is essential for the business that the IT continues to function, from both a business and a regulatory perspective. For that reason, one of the chief priorities of ABC is to keep full service running on a “five nines” (99.999 percent availability) or better basis. That means the system is down just 25.9 seconds in any given month—or less.

To do so, ABC has turned to Huawei’s active-active data center solution. This provides business protection on five layers: storage, database, applications, networking and transmission. In addition to offering synchronized data replication in real time, the solution also allows the backup center to provide load balancing for day-to-day business operations.

Huawei upgraded ABC’s data center network architecture—the core of the entire bank system—by simplifying it, cutting the total number of zones by more than half to reduce functional overlap. Thanks to this optimization, ABC needs only one physical network to carry out production and office services. In addition, Huawei designed its architecture based on the principle of Multiple Centers for Multiple Areas, in which all core devices use a redundant design to ensure fast recovery. If disaster strikes, failover time is a fraction of that experienced by other systems.

According to Liu, Huawei’s Agile Network, a software-defined networking (SDN) solution, also allows banks “to make their business resilient, and to deploy applications across data centers, thereby increasing availability.”

Discovering What Customers Really Want

Big Data is a key phrase in today’s IT world, and according to Liu, the use of Big Data can help banks in a number of ways. “By analyzing data from many transactions, banks can help mitigate bad credit risk, whether through card issuance or loans,” he says. “Banks can also use Big Data to help with marketing campaigns and to develop products that will be attractive to customers.”

In other words, to better understand customer behavior patterns, a bank needs to analyze information. And with a customer base the size of ABC’s, this means millions of transactions must be examined for patterns to unlock new value and business potential.

Here, Huawei’s FusionInsight platform provides a way for banks to develop a deep understanding of their customer base, combining industry-leading storage technology—with dashboards and widgets that can be customized to meet the needs of individual banks—and a powerful back end that can incorporate Huawei’s FusionSphere virtualization management solution.

Likewise, Huawei brings peace of mind to its remote customers by providing security through a number of solutions: A customer’s identity can be established by encrypted digital signatures, as well as biometric means (palm vein recognition), and all transactions carried out by virtual terminal are monitored by video.

Learn more about the Omni-channel Banking

In the future, remote services may be provided not only through dedicated VTM terminals, but increasingly through mobile devices, PCs and even smart TVs, resulting in an even fuller omni-channel banking experience. For financial institutions serving a large, dispersed and previously unbanked population, the Huawei eSpace VTM solution provides a way to manage cost, effort and human resources efficiently.  Source: Bloomberg