The banking industry over the last 10 years has faced significant disruption, from the fallout of the financial crisis, regulatory reforms, entrances from new competition and to top it off, a global pandemic. Banks are now focusing on both business and customer resilience, to secure a transformed and instinctive future.
There has been significant acceleration in banking technology and operations, with sales operations shifting from branches to digital channels. The majority of these will be in web and mobile applications, and those that have strong digital sales capabilities and fully integrated customer origination journeys will reap the benefits. Banks will need to truly excel in micro segmentation, dynamic tailored pricing, product bundling and third-party integration. Backbase, 2020. This ties in with the strategy around being customer obsessed and driving a personalised customer experience across all channels.
The fintech’s have created a huge disruption in the financial space, but even more recently techfins are posing an even bigger threat. Banks will need to transform their models to compete with the likes of Google, Apple, Facebook, and Amazon (GAFA). They’ll have to become digital services businesses that are able to monetize data and build products and services around predictive insights into their customers, such as how they earn money today versus how they will earn money tomorrow. Anu Sachdeva, Global Practice Leader, commercial banking Genpact
There needs to be a real focus on customer experience and removing unnecessary friction. As a customer we need to be able to have similar experience digitally in branch, web and mobile, truly maximising technological flexibility. It is interesting that millennials are just as likely to use bank branches as other generations (50%,55%), Forrester 2020. This reinforces the fact that the blend between human and digital experiences needs to be seamlessly integrated. The challenge for most traditional banks is the legacy systems, as customers should be able to bank with whatever device they deem fit. This demands technological flexibility allowing data to flow across API’s with a 360-degree view of the customer, without any silo.
Looking forward, post 2020, experiences will be defining our realities, and this has been an adoption techfins have an advantage on. Banks will need to be the masters behind curating experience, products and services to customers mindsets. The expansion of this is led by AI and data, and we will start to see partnerships with banks and larger techfins such as Amazon to drive this, moving away from a product- led siloed to one which is experiential and agile.
There is growing uncertainty right now, with both geopolitical issues and a global pandemic, putting great pressure on our economy.
- Banks will need provide customers with the tools and mechanisms to enable financial betterment.
- Be the leader in ethical morality, ensuring robust algorithm and social economic responsibility is at the forefront of all decisions.
- Create a 360 ecosystem that opens innovation in banking creating an opportunity to share and grow.
The time is now, and full adoption of technology is the only way to accelerate transformation.