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CX automation is key for Asia’s rural banks

5

min read

Published:
March 29, 2023

Adopting new technologies can be a challenge for rural banks in Southeast Asia with limited resources. Rural banks can start with omnichannel tech solutions that can scale customer support.

In 2019, only 29% of Filipinos had a bank account. This number jumped to 56% in 2022, thanks to the Central Bank of the Philippines’ financial inclusion strategy. Rural banks are an important piece of the puzzle: in the economically-underdeveloped regions of Southeast Asia, rural banks are a pervasive presence that support many livelihoods.

However, the rural banking industry is under pressure to modernise as technology and competition change the banking landscape. Digital banks, e-wallets, and large urban banks with better technology threaten the viability of smaller rural banks, particularly as more people in South Asia adopt smartphones. In order to compete, rural banks can no longer rely on in-person services to be sufficient for financial consumers.

Rural banks in the Philippines face pressure to adapt

In the Philippines, there are currently 3,330 rural bank branches, 20% of which serve low-income municipalities. Over the years, the number of branches has spread, but the number of banks has declined as these smaller institutions face competitive pressure from larger banks with more technological capabilities.

A recent addition to this pressure has been the Central Bank of the Philippines’ 2022 decision to raise the minimum capital requirements for rural banks as part of its Rural Banking Strengthening Programme. This new requirement stands to affect up to 50 of the country’s approximately 400 rural banks, which will need to raise their capital in order to stay viable. For these institutions, part of staying viable means adopting technology that allows them to compete with new options accessible on mobile devices.

Below are three main communication strategies that can help rural banks keep up with competitive pressure:

Communication strategy #1: Omnichannel service

In many remote areas of rural Southeast Asia, travel to rural banks is prohibitively costly due to distance. As a result, there’s still a significant number of rural businesses that prefer cash due to the cost and time required to travel to rural banks.

However, digital channels are a way to offer services to consumers without requiring them to travel. Rural banks can use omnichannel messaging to allow customers to set up an account, apply for a loan, and make payments on preferred channels such as Facebook in the Philippines or LINE in Thailand. 

Omnichannel messaging with solutions like Proto can also enable rural banks to serve customers over SMS so internet access isn’t a barrier to financial services. Financial customer service teams using omnichannel strategies can centralise communication records in one place easily, making it easier to offer personalised service for each customer.

Communication strategy #2: Promote financial literacy

E-wallets are more popular in Southeast Asia than the US, the UK, and Europe, offering digitally-savvy consumers an alternative to formal banking. During the pandemic, one third of digital consumers in the region completed an online transaction for the first time, pointing to an increasing level of trust and comfort with digital financial services.

Providing services such as accessible loans and insurance over digital channels – rather than just payments and e-wallets – requires consumers to understand how they can benefit. Tech For Good found that financial literacy was a significant factor in consumer willingness to place trust in these more complex services over digital channels.

Vulnerable members of the community with limited access to financial resources need access to information about loans and insurance in order to be comfortable using them. Rural banks can also benefit from their local reputation as trusted advisors to compete with global providers.

Communication strategy #3: Tech solutions that are easy to implement

Limited capital and human resources makes the cost of many solutions on the market prohibitive for rural banks – so affordable technology is the bedrock of an effective communication strategy.

Solutions should also be easy to deploy, scale and maintain without significant development efforts or training. For example, Proto’s local support is included in the price of deployment, which makes implementation and training much simpler.

Scalability is an important reason why Proto also offers free omnichannel live chat to help rural banks get started scaling customer service. Over time, banks can add chat automation as they scale, without switching to a new chat provider. Rural banks deploying with Proto can also opt for prepaid pricing, which can help them manage the cost of automation as they scale.

Communication is key

To stay competitive, communication is key for rural banks. Keeping communication records not only helps banks scale existing services, but also helps banks design services that meet customer needs, keep internal communication streamlined, and operate efficiently in a rapidly changing environment.

By embracing new technology like Proto, rural banks can continue to serve the most vulnerable members of their communities and contribute to the economic development and well-being of the region as a whole. Talk to one of our experts to learn about Proto's innovative solutions for financial inclusion today.

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