What value added services should banks offer their individual and business clients? from Alicia Reno's blog

In an increasingly competitive financial landscape, banks must differentiate themselves to retain and attract customers. While traditional banking services like savings accounts at the best savings account interest rates in Sri Lanka, loans, business pre-shipment finance, and payment processing remain essential, the demand for value added services has grown significantly.

The services that go beyond the core banking offerings, can help banks create deeper relationships with their clients, whether individuals or businesses. The right mix of value-added services can enhance customer satisfaction, loyalty, and profitability.

1.      Personalised financial planning and advisory services

Personalised financial planning is a crucial service for both individuals and businesses. They can range from retirement planning, investment advice, and tax optimisation for individuals to strategic planning, cash flow management, and risk assessment for businesses.

·         Individual clients: Offering personalised financial advisory services can help individuals better manage their finances, plan for the future, and achieve their financial goals. Banks can use data analytics and artificial intelligence to provide tailored advice, helping customers make informed decisions about savings, investments, and loans. Providing tools like budgeting apps, savings goal trackers, and retirement calculators can further enhance customer experience.

·         Business clients: Small and medium sized enterprises often lack the resources to hire full-time financial experts. Banks can fill this gap by offering advisory and SME banking in Sri Lanka on topics such as working capital management, debt restructuring, and investment in growth opportunities. By helping businesses optimise their financial strategies, banks can position themselves as indispensable partners for these types of businesses.

2.      Digital banking solutions

These days customers expect seamless, convenient and secure banking experiences. To meet this demand, banks must offer advanced digital services that cater to the needs of individual and business clients.

·         Mobile and online banking: Mobile apps and online baking platforms that allow customers to check balances, transfer money, pay bills, and manage their investments are no longer just a convenience – they are a necessity. Enhancing these platforms with features like voice banking, AI-driven chatbots, and personalised dashboards can set a bank apart from its competitors.

·         Cashflow management tools for businesses: Business clients, especially SMEs, can benefit from digital tools that help manage cashflow, automate invoicing, and track expenses. These tools can integrate with accounting software, providing businesses with real time insights into their financial health.

3.      Wealth management services

As financial portfolios grow more complex, they seek more sophisticated wealth management service. Banks can cater to these needs and offer their services to high-net-worth individuals and businesses seeking to optimise their wealth.

·         Portfolio management: Banks can provide personalised portfolio management services that include asset allocation, investment diversification, and risk management. By leveraging data analytics, banks can offer clients investment recommendations that align with their financial goals and risk tolerance.

·         Estate planning and trust services: Estate planning and trust service for individual high-net-worth customers is essential. Banks can assist clients in creating wills, setting up trusts, and planning for the transfer of wealth to future generations.

·         Corporate wealth management: Corporate wealth management services for business clients can include investment strategies for surplus cash, succession planning, and employee benefit plans. By offering these services, banks can help businesses maximise the value of their assets and ensure long-term financial stability.

4.      Innovative payment solutions

Payment processing is a critical process for both individual and business clients. However, banks can work toward adding value to this service by offering payment solutions that cater to the evolving needs of their customers.

·         Digital wallets and contactless payments: As digital wallets and contactless payment become more popular, banks should offer these services to individual clients. Integrating features like peer-to-peer payments, real-time transaction alerts, and rewards programmes like debit and credit card offers, can enhance the user experience and encourage adoption.

·         Payment gateway solutions for businesses: Business clients, especially e-commerce companies, require robust payment gateway solutions. Banks can offer secure, scalable, and customisable payment gateways that integrate with various payment methods, including credit cards, digital wallets, and bank transfers. Additionally, banks can provide businesses with insights into payment trends, helping them optimise their payment processes.

5.      Credit and lending innovations

Credit and lending are traditional banking services, but there is room for innovation that adds value to both individual and business clients.

·         Flexible lending options: Offering flexible lending options to individual clients such as instalment loans, revolving credit, and buy-now-pay-later services can meet diverse financial needs. By using alternative credit scoring models, banking institutions can also extend credit to underserved populations, expanding their customer base.

·         Working capital solutions for businesses: Businesses often need access to working capital in order to manage their day-to-day operations. Banks can offer innovative working capital solutions such as supply chain financing, invoice discounting, and merchant cash advances. By providing quick and easy access to funds, banks can help businesses to maintain liquidity and seize growth opportunities.

6.      Financial literacy and education programmes

Financial literacy is crucial for everybody, whether individuals or businesses. Banks can play a vital role in educating their customers about financial management, investment strategies, and risk mitigation.

·         Workshops and webinars: Banks can organise workshops, webinars, and online courses, on various financial topics. For individuals, topics could include budgeting, saving, and investing, while business clients might benefit from sessions on financial planning, tax strategies, and funding options.

·         Educational content: Providing customers with access to blogs, e-books and videos that cover financial topics can empower them to make informed decisions. Financial institutions can offer personalised recommendations based on the customer’s specific financial situation and goals.

7.      Sustainability and ethical banking

As awareness of environmental and social issues grow, customers are increasingly looking for banks that align with their values. Banks can differentiate themselves by offering sustainability focussed value added services to their clients.

·         Green loans and investments: Green loans for individuals and businesses for projects that promote environmental sustainability, such as renewable energy installations or energy efficient upgrades can encourage greater use of such methods. Banks can also create investment products that specifically focus on environmental, social and governance criteria, allowing clients to invest in companies that align with their values.

·         Ethical banking practices: For socially conscious clients, banks can offer transparency in how they use deposits and ensure funds are not invested in industries that harm society or the environment. Ethical banking services can attract customers who prioritise social responsibility.

8.      Security and fraud prevention

As cyber threats become more sophisticated each day, banks must prioritise security and fraud prevention in their value-added services.

·         Advanced fraud detection systems: They can offer real-time fraud detection and prevention services that protect customers from unauthorised transactions. These systems can use machine learning and artificial intelligence to identify suspicious activities and alert customers in real time.

·         Identity theft protection: Providing protection from identity theft, including credit monitoring and identity restoration support, can add significant value to individual clients. For businesses, offering cybersecurity consulting and solutions can help them protect sensitive financial data.

In this day and age customer expectations are higher than ever, and banks and financial institutions must go beyond traditional services to offer value-added solutions that meet evolving needs of their individual and business clients. They will not only enhance customer satisfaction and loyalty, but also drive long-term profitability and growth for the bank.