Talking about priorities or things to do in Digital Banking is almost a non-sense, things go so fast and are almost so unpredictable that during the time that we need to prepare and publish this article the context would have probably change. Truth is that banking innovation are directly inspired by the latest technological innovations tuned by marketing departments and by clients who are getting every time more demanding, more connected and more impulsive.
Right now there are very few doubts about the disruptive changes that technologies like quantum computation, blockchain or AI are going to introduce in the sector setting the trend of another big transformation. Without trying to be disruptive, or showing future trends -or not so future-, without intending to present great visions or transformations for the future of the sector, we will try to be pragmatic and give you a humble opinion about what currently seems to make sense in the banking industry:
1. Personalization. Again and again. Without any doubt digitalization of relationships came along with an industrialization process, the digital channel tends to be universal and plain, almost the same for everybody. Banks must be able to emulate the lost personal relationships. New generations probably won’t expect “Good Morning Mr. Smith, how is your wife today?” but they will do expect a digital experience that recognize them like individuals, or at least that enable them to recognize themselves into a group context. We have to be able to microsegment the relationship with the Customer in order to personalize the interaction, and to do it in a bidirectional way, being able to listen and learn. Our digital channel must adapt to micro segmentation and personalization.
2. Improve the digital interaction. Despite the complete orientation towards a complete digital world, despite the fact that some generations have an innate ability towards digital channels, we haven’t reached a natural interaction in some more transactional and less relational activities. Will it be because of tradition, will it be because of the regulatory burden, or because of the intrinsic resistance to change? The truth is that not all processes are naturally digital. Walking firmly towards a total digital agility making use of those technologies that enable it seems to be a safe bet. It is only about identifying those potential friction points, as authentication or regulation, and applying the available technology or simply common sense in order to do not artificially complicate further than what is strictly necessary.
3. Financial advice. Our traditional education is oriented in most cases to learn subjects like History, to know the great literature classics or the essential of human nature, but in very few cases it implies a minimum cultural immersion about how to manage efficiently our finance, to understand correctly the tax advantages of a determined financial product or which one is the best investment option according to our saving profile. This activity used to be delegated to our trusted Bank Officer. Whether it be virtual advisors in AI or Deep Learning, digital tutorials about e-learning platforms, or deploying an appropriate strategy that allows orchestrating digital and attended channels, it is necessary to bridge the gap produced in these advisory tasks in those products not so easy to understand.
4. Brand recognition. When statistics tell us that a segment of population as important as are Millennials wouldn’t mind changing their bank, it becomes necessary to foment a solid and recognizable brand image. It probably is a generational aspect, but identifying a brand for the esthetics of his office or the person that constantly attend you there seems to be an easier exercise than doing it through a digital channel. The first step is to present a unique face, a homogenous customer experience across channels. The second step is to provide the adequate communication channels and to exploit them in an optimum way; the rest is about being creative, like always.
5. Complete the digital path. Even though there are every time more and more financial products and services available in every channel, there are still a few that are not completely digital. From some specific processes subject to strict regulatory standards to particularly sensitive or complex products, financial institutions must continue to push in the line of complete digitalization so that those clients who require it can live a completely digital relationship with their entity.
Whether you have implemented these ideas, you are about to implement them, or you have implemented different ones, what you have to be sure about is that we are going towards a digital path. One of the most important needs of Financial Institutions must be to be able to walk at the right pace in order to do get left behind, but also to be able to go back, to change direction or to take a shortcut. Having a technological ecosystem that allows to move forward any business initiative in an efficient and flexible way, that allows the continuous change and to react in a controlled way in the face of new transformations or disruptions, is pretty basic right now.
Core Banking has long been the center of operations supporting a product-centric strategy. Yesterday was the time to focus on the customer. Balancing the center to the digital arena is the step that have already given the majority of institutions. Now it is necessary to see if they have done it giving themselves the necessary flexibility to follow the pace of the time.