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Embracing the future with Digital Transformation in Consumer Banking

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Providing an end-to-end digital experience replete with online and digital services and overhauling the existing backend system with sophisticated high-end technology is a daunting task –a task that most banks have been reluctant to dip their toes into. However, shifting customer expectations demands the necessity for this digital transformation. Without constantly evolving to meet the needs of these demands, services can go obsolete. Backing away from digital transformation can have drastic repercussions in the consumer banking service sector. Let us look into why digital transformation is necessary and the steps banks can take to further their efforts in this transformative journey.

The impact of COVID-19

The banking sector was unhurriedly taking tentative steps towards a digital future. But, COVID-19 drastically hastened this process. The limited hours, reduced staff and fear of exposure forced an alteration in the way people banked. People were adapting to technologies at an unprecedented level which otherwise would have taken them years. For example, there was an increasing trend in using online banking, mobile wallets, and QR codes. It was reported that nearly a quarter of the existing consumers were using at least one form of digital banking solution since the onset of COVID-19. Another underlying factor could have been that even before the pandemic stuck almost 49% of the boomer generation preferred online and mobile banking solutions. COVID-19 catalysed the digital transformation process in the banking sector.

Customer Expectations

Even before the pandemic stuck, there has been a gradual shift in customer expectations. While a large portion of the customer base falls in the boomer generation, millennials are poised to inherit from them. Millennials, having grown up in the era of the internet revolution, are tech savvier and expect more digitized and on-the-go solutions. This shifting customer expectation is only going to accelerate further down the road as the digital revolution takes over every niche.

With every other industry spearheading towards a more digital approach to their services, it is only a matter of time before it overtakes the banking industry as well. Sufficiently preparing for the change is the only way to stay afloat in the future.

Changing criteria

Traditionally, it was much easier for banks to acquire customers, as there were limited criteria that customers considered while choosing their primary bank. People chose the easiest and convenient banks close to their place of residence. Today, customers evaluate banks over a large spectrum of criteria including customer services, mobile banking ease, annuals fees, incentives, cash limits, etc. Without catering to these shifting changes, banks can easily lose out to competition in acquiring customers and retaining them.

Increased competition

Tech giants’ entry into the banking sector also poses a challenge to traditional banking methodologies as customers usually attach a higher level of digital expertise to them.  Customers also tend to have a higher emotional connection with these brands as opposed to their primary banks.  

Tech Giants such as Apple, Google, and Amazon have the ability to leverage their in-hand data to further create a personalized experience for the customers. Personalization can become a game-changer since, with increasing competition, customers are flooded with a multitude of banking options to choose from and without extending a personalized customer experience, they can easily flock to your competitors who can. 

What should banks do?

The fundamental step every bank can take towards a better future is to understand the customer’s lifecycle and equip them with the right tools to improve their experiences. However, the process must not be too daunting enough to discourage customers. The right balance must be maintained between customers who prefer traditional banking methods and those that prefer the digital ones.

  1. Improving Mobile experience – Mobile banking provides a tremendous potential in increasing engagement with users. It is hard to find anyone without a smartphone today. Banks can leverage this continued connectivity through banking mobile applications. Banks can move away from the phone calls to push notifications.However, poorly designed User Interface and snaggy User Experience can cause considerable reluctance among customers in adopting mobile apps. Without a consumer-first approach, mobile apps can fail.
  2. Adapt intuitive digital assistants – Almost all service-based websites have a Chabot and help-tools that customers can engage with. Chatbots can provide real-time services. Banks can take one-step ahead and provide customer service solutions through chat services instead of one-on-one calling. Many international banks have already jumped into this bandwagon, famous among them being Bank of America’s Erica. 
  3. Digital-only banking solution – Banks are also embracing the digital-only banking solution to better cater to time-crunched customers who expect services on the go. You can do basic banking such as signing up for a new account, bill payments, balance, etc. Even though digital-only banks are in its nascent stage, banks can save on overhead costs and physical branches, and provide users with a seamless service. JP Morgan’s Finn was a classic example that was rolled out to target the millennial group. With its AutoSave feature, consumers could create a rule to save a particular amount for each dollar spent.
  4. Connecting to third-party assistants – Google Home and Amazon Alexa has made a nest in many homes around the world. Integrating banking solutions with these home automation gadgets can improve users’ omnichannel experience. It would also improve the customer’s emotional association with banks.
  5. Automating repetitive tasks– By automating repetitive tasks banks can improve efficiency and reduce the margin of human error. You can redirect your valuable time into important decision-making tasks. It can also reduce operational costs.

Although customer satisfaction is relative and varies from generation to generation, the question of digital transformation is not about its necessity and rather is only a matter of how soon. Contrary to the belief that digital transformation can take away the emotional ties customers have with their banks, a never-before personalized approach to banking can be achieved with digitalization. The future of banking can even come down to mobile banking. Social Media have also forged a new path for banks to communicate. All these multiple opportunities open up a huge window of opportunities in consumer banking.

At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. We are a company offering low code in banking solutions along with being an omni channel banking platform. All solutions are all customer centric and ensure you offer the highest level of customer experience.To understand how you can achieve digital transformation in the banking sector, reach out to us now.

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