Unraveling The Paradigm Of Digital Transformation In Banking Industry

There is no such thing as a non-digital customer anymore. Every customer is a digital consumer by default – using digital technology in many ways and speeds. The varying speed and needs of customers have impacted various sectors and services differently. The banking sector is no different. Be it corporate, retail or small business banking, the tech-savvy customer now demands premium, seamless experiences across all platforms and channels. And as Brett King says in his insightful book Bank 3.0 ‘Banking is no longer somewhere you go but something you do’.

Digitization in banking has shaken up the old order. Despite the ever-evolving paradigms and intensive digital investments, banks are concerned about customer churn and decoding customer expectations in the banking sector to provide the perfect fit for their requirement. How can banks optimize customer engagement in this new digital age?

First of all, the challenge for banks is not becoming ‘digital’. They already have enough technology backing and digital investment at their perusal. The challenge is to provide the level of sophistication and value that the customer finds worth paying for. They are no longer just competing with other banks and the fintech sector, they are competing with Apple and Amazon Prime as far as digital interactions and elevated expectations go.

The challenge is to create an optimal customer journey that makes every step and touchpoint in the customer life-cycle streamlined, efficient, personalized and consistent. Banks and financial institutions need to rethink their customer journeys inside out by understanding customer pain points, identifying opportunities to delight the customer in ways that separate them from the crowd.

One of the greatest concerns of digital banks in 2017 is to remove the friction from customer journey. Banks are struggling and competing against the increasing onslaught of FinTech companies and startups that specialize in resolving some common banking issues and simplifying the customer journey with mobility and context. What are then some strategies that banks and financial companies can adopt to better serve their digital customers?

1. Be in touch with the market: Ensure that your bank or financial service is aware of all the latest developments and innovations in digital banking from around the world and how these trends influence the business model and customer journey.

2. Prioritize: Not all digital innovations or technology is relevant at once. Choose the areas you want to focus on combined with customer priorities and expectations.

3. Security and user experience: One of the most important and growing concerns is cybersecurity. Optimize authentication, access and privacy technologies in the most user friendly ways.

4. Mobility: Mobility will increasingly be at the heart of user experience – provide a seamless device experience and a design that makes user onboarding intuitive and easy.

5. Content and help for user conversion: Create content that helps users to understand your products and services better. Be it applications that demonstrate how-to do stuff, videos, animated content, calculators and tools – anything that can break customer barriers and generate consumer trust – influence decisions and increase sales.

6. First contact resolution: For customer retention in the highly competitive landscape, first contact resolution is the key. According to one Accenture survey, 80% of customers who switched their providers complained of poor customer service and said that they could have been retained.

7. Apply lightweight technological changes: Banks can create significant performance gains with small but targeted digital enhancements. Deployment of tools like e-forms, workflow systems that can be deployed quite rapidly are some ways to go about this.

8. Be selective with the bigger transformation goals: Some areas will require more radical transformation investments but not every aspect of banking processes and products needs to be revamped. Aim for the important wins – the few that involve the most capacity consumption and deliver the highest rewards. You may want to retire an old application that is causing the most bottle-necks and opt for application re-engineering in select processes, or opt for application integration to allow your existing systems to collaborate better.

Banks need to increase the focus on business outcomes, not digital activity. Customers want a seamless and simple transactional journey enabled by technology and various digital channels. Digital innovations in banking sector, emerging financial models, delivery systems and customer expectations are driving banks to re-evaluate how they deliver value to their digital customers. Anytime anywhere banking is now the norm and banks will have to offer innovative, robust, secure and flexible solutions for the empowered customer.