Bring Banking Expertise to New Markets

Banks can benefit by bringing in-house expertise to emerging markets.

Mature-market companies have the in-house knowledge and resources to bring banking expertise to emerging markets. Interestingly, several mature-market companies have realized the uniqueness of each of these markets and are now catering to these opportunities with very customized solutions. Some have also taken their insights from developing markets back to their home grounds to launch newer products and services there.

The risks of operating in new markets include redesigning the go-to-market strategy, to an extent or entirely, as several of these are very unique markets requiring a rethink of product, distribution, sales and servicing strategies. Regulatory risks vary from country to country, and most have an evolving regulatory framework. There also are financial risks associated with investment regulations. Technology, suitably deployed, can help banks with quicker and more cost-effective turnarounds in their product, distribution and servicing strategies.

Distribution and customer relationship management technologies are key strategic enablers in emerging markets. Most banks in the Indian context have been able to migrate 30 percent to 40 percent of their mature-market technologies to emerging markets. But while hardware architecture is easier to migrate, applications architecture often requires customization at the country level.