New trends in the finance industry, from open banking to the rise of Fintech start-ups are shaking the industry. Spurred by changes in customer behaviour and expectation, many banks are looking towards digitisation, with the customer at the heart of their transformation. Article written by the good folks at Silverlake Axis.
Banking is at an inflection point. With the proliferation of technology across all layers of society, banks need to review its business model and swiftly strategies for digital transformation. Although typically traditional in its service to customers, banks need to adapt to the new wave of customers searching for convenience and greater digital experiences in their day to day lives through everyday technology.
The digitisation of everything through the “shifting of consumer expectation” is creating the next wave of digital transformation. Technology giants such as Google, Apple, and Amazon are redefining the customer experience today, by becoming increasingly serious about financial services; a change that has brought forth upcoming Fintech solution providers and Neobanks.
Changing customer expectations across generations with the rapid acceleration of digitisation across all industries are putting pressure on banks, and if banks are to survive, then going digital is no longer an option.
Customer Experience Now Defined By Digital Services Across Industries
Customers today expect the same level of service from their banks as they do from other brands as they look towards digital solutions for convenience. In fact, customer experiences today often seep from one industry to an entirely different one; for example, customers may check the way their banks handle transference of credit against their most recent purchase on Lazada or compare the application for a credit card to applying for a subscription on Netflix.
With this acceleration and convergence in the past decade – now further exacerbated by the pandemic – memorable digital experiences and convenience have grown in importance. More than ever, customers are now greatly reliant on Fintech solution providers i.e. e-wallet services, insurance providers, payment processors and Neobanks as they offer products or services that are more easily accessible, while providing an experience that effectively replaces the traditional banks’ services.
Embracing Consumer-Tech In The Banking Industry
With rising customer expectations, banks are now facing a broader competitive threat than they have ever experienced to date. Traditionally, banks only needed to focus on outperforming direct competitors or companies offering similar products or services. Now, with consumer expectations starting to transcend traditional industry boundaries, banks are benchmarked against more than their products and services – they are benchmarked against exceptional & seamless customer experiences offered by companies in other sectors.
Customer-centricity is fuelling this disruption, and traditional banks need to digitise to meet these new expectations. More than security and cost-efficiency, the true value of digitisation is what banks can do for its customers. By focusing on consumer through innovation and technology to enhance customer experience – such as allowing customers to manage all their finances in one place seamlessly, setting up payments effortlessly, digital onboarding, making deposits, from anywhere at any time – banks could potentially have the greatest advantage among upcoming Fintech players, given the strong base of customers they already have.
Digitisation And Setting A Greater Standard For Experiences
Through digitisation, banks can strategise on incorporating innovation into their digital transformation, preparing themselves to play a central role in which they operate. This means that banks could potentially be at the centre of the digital economy through all customer activities instead of having to login to several different platforms keying in different passwords. Governed by compliance, a banks’ primary challenge is to offer services and experiences that consistently meet new expectations. As customers become accustomed to the digital experiences offered by companies such as Google, Apple, and Amazon, they expect the same level of customer experience from their banks. Digitisation then allows banks to adopt technology and processes that allows them to onboard customers without physical presence, as well as provide the convenience of banking on demand.
Apart from great customer experiences, digitisation also allows banks to look towards shifting away from working in silos, allowing them to streamline their data and using analytics to enhance intelligence into each customer contact. Banks can start exploring revolutionary business processes not possible before, laying the groundwork for augmented intelligence towards a future of superior banking services.
The Future Of Banking
Customer experience is changing the way industries innovate. Banks are not immune to this impending demographic change in the consumer population, as customer experiences within any product category now affects how customers experience products in other categories and industries. Ultimately, customers are now all about convenience, trust, and experience. It does not matter whether they are receiving their services from banks or a Fintech company. The onus is on traditional banks to innovate and digitise to meet the changing needs of consumers today.
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