Banks Don't Spend Wisely on IT

Good money management is mainly about what you spend, but it’s also useful to think about how you spend your money, and what you do with it when you’re not spending it.

These days banks are not only facing competition from banks but also some other organisations which are coming up with this business. The best example is that of Wal-mart which is coming in Financial Services and is giving basic banking services to its shoppers.

To address this new tide of competition, banks are looking for novel ways to retain and attract customers. But cosmetic enhancements and branch renovations can only go so far. Financial-services providers have to make extensive changes in how they sell to customers. The key to these changes will be upgrading information technology systems. In fact, if banks don't transform these systems, they stand to lose customers and substantial revenue.

Why banks are loosing customers:

• The so called improvement in service is not enough to attract the new customers and soon the old customers will go to those who will not only provide them these services but also with ease.

• Second main reason is that for banks upgradation is not the top priority. They are  happy in doing what and how they are doing for generations. What i srequired out of them is to maove towards a better technological environment.

• The third way is 'targeting the affluent'. Today there is a new approach to modernizing IT systems that can help banks retain customers and grow revenue without doing a wholesale replacement. It's called "componentized banking." With this approach, banks can update their IT systems one step at a time, while reducing maintenance costs. One benefit of this approach is that centralization of product components helps banks better bundle services that fit customers' needs, letting them target specific customer segments and create a superior experience for their customers regardless of the product.

• Last is that change is not for everyone. Rather they do it for some and other feel neglected.

So in order for these banks to develop, they must follow the path of IT.

If I have to comment over it, I would say, banks should invest in IT if they are to survive in this competitive environment. Customers are getting more and more learned and complex and all they would want from their banks is convenience. They would want to do their banking at their convenience and this calls for innovative financial solutions.