The current scenario has forced the banks to introduce significant reforms to adapt to the new reality. The services offered in the Banking Industry are quite complex. The answer to this complexity is better product management in banking.
What is Product Management in the Banking Industry?
Product Management is traditionally defined as a logical choice followed when the count of products on offer is too large. In such a situation, one team or department being in charge of the entire portfolio would make sure that no product gets ignored. To focus on all the products and introduce customers to every product in the banking industry, a team is assigned to look after a product.
Product management is all about targeting a specific customer segment and providing them with the right product and the relevant service proposition. It aims to provide innovative services at competitive prices while keeping in mind the commercial risks involved. Efficient product management also involves finding the right balance between the fee-based services and the interest rate associated with the products, like loans or mortgages.
Benefits of Product Management
Product Management in Banking sector puts the needs of the customer before anything else. It brings with itself the business principles and defines a target market that ensures lasting benefits for the organization. In this section, we would discuss the benefits associated with Product Management.
Effective Product Management ensures higher conversion
The Sales and the Product Management work closely to identify a target group of customers to approach. This ensures that the product is relevant to the customers. This also helps us to identify new market areas that need an entirely different product, which could be developed by the organization.
It reduces the risk of product failure
Product Management advocates the creation of a business objective even before a product is carved. This act minimizes the risk of product failure and gives the organization an honest look at the market trends, market size, and competition. Business is all about making correct decisions about where you invest your money, and effective Product Management helps you put your resources in the right place. Without a pre-planned business case, developing a product that achieves customer accepts that the organization is looking for would be a strenuous task.
It helps us align the beliefs of the organization with the market needs
All the new features, products, or the latest ideas that will be launched into the market should always be aligned with the organization’s objectives. The product management teams have this responsibility, and they discard any product or feature that does not follow the set principles.
Product Management encourages the organization to look towards the future
All the benefits that we saw in this section have the same underlying thought, being prepared for the uncertain future. Any product that is being developed is approved for launch only when Product Management teams testify it to be future-ready.
Introducing New Products: From a Gamble to Controlled Product Management
Product management has combined three areas of critical decision making with the associated information. They have allowed the product development process to become streamlined and impactful rather than being a dark shot.
Product and Service Assessment
The product and its service assessment have allowed us to identify the need for such a product in the market, and the associated risk that the product carries with itself. It aims to prioritize the products that have higher revenue opportunities in the future.
Product and Strategic Innovation
As we discussed before, the Product Management team is responsible for identifying the market trends and the scope of a new product. The customer segmentation offers insights to the customers’ needs, which are then fulfilled by releasing innovative products into the targeted market.
Measuring Product Milestones
The Product Management teams create insightful reports that tell the business about the performance and the products’ acceptance. Without these reports, it would become difficult for the organization to understand the performance trends and the milestones it achieves.
Also Read: Future Scope of Product Manager in India
Challenges in Product Management in the Banking Sector
The Product Management environment in the Banking industry presents challenges of its own. In this section, we would be looking at a few challenges faced in Product Management in the Banking Industry.
- The first challenge that the Banking industry faces in the Product Management perspective is integrating a real-time payment system, which allows the customer to transact instantly.
- Next, customer segregation is a crucial issue. There are a lot of individual players involved in the finished product that we see. Be it the banks, the interchange partners, or the product developers, answering the question “Who owns the customer” is a tough task.
- A few major banks are still trying the time-tested method of cross-selling products in the banking industry. This leads to poor customer experience. Product Management does not allow any scope of poor customer experience.
- The COVID-19 outbreak saw traditional banks move to a digital platform. A digital Bank requires a massive shift in the organizational structure. This might lead to an enormous shift of the skill-set relevant to the bank.
Tips the future Product Managers
A Product Management professional needs to develop a curious mind. They have to question the minute details, even if they seem silly. They need to test the theories against the business, the current market scenario, and the customer base. The most important thing that sets apart the able Product Management professionals from the rest is the ‘6 Whys’ that would help you reach the project’s root.
The Product Management industry is exciting and provides ample opportunities for businesses to understand market trends and maximize their revenues. Traditional Banking is slowly making way for the Digital Age, and this is a pivotal time to realize the potential of Product Management in the Banking Industry.
If you are highly intrigued by what you read, you can enrol in the Product Management Certification Program offered by upGrad. The certification program delivered by experts will help you kickstart your career to be a successful product manager.