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Digital Banking and Looking Beyond Existing Channels

Why Digital, NOW?

  • Banking industry is at crossroads

There are tremendous expectations from banks to keep up with service experiences that are provided by retailers, online providers and other players hitherto unconnected to banking domain. We believe that time has come for a complete overhaul of banking as we know, and digital is the crux or pivot, upon which this transformation is going to hinge upon.

  • Changing customer behavior

Thanks to social media, retail customers have suddenly discovered they too have a voice and can be heard and make large institutions bend backwards to serve them. Today’s customer is more informed, willing to switch loyalties and definitely expects a better service.

  • The advent of “Digital Native”

Today’s customer is more at home with the internet, than at a branch or physical touch point. This is the growing segment and banks need to mature along with them in their digital journey. Digital experience can start with basic services like mobile / internet banking, but it would sooner or later flower into more in-depth, intricate set of services that are based upon Omnichannel experiences.

  • Adapt or perish

Rather than doing it the traditional way of build and operate, banks should look at buy and implement these services, since they would require shorter “Go to Market” timelines. The Digital storm that is going to blow across the industry would leave behind stragglers, who are doggedly continuing with legacy systems, and emerge with victors who have identified the moving goalposts and set out a digital vision for themselves.

Looking beyond existing channels

Digital banking is a paradigm shift in the way banks operate, in the way they view and engage with their customers. Channels are just a medium to deliver services to customers. So, while a mobile or internet or a wearable might be used to deliver services, just having these channels wouldn’t mean that banking has become digitized. The Internet Of Things (IOT) is here and we would be living in a world of interconnected devices that are “alive”, “intelligent” and “connected”. A fridge that places an order once food stock reduces, a TV that pays automatically for watching a movie, a shopping cart that generates your bill are all various scenarios in the digital world. And inevitably all these events have banking / payment as a touch point or an endpoint.

  • Context is king

Relevance is the key in Digital banking. There is no point in cross selling personal loans at time of grocery purchase, even though it makes perfect sense at time of paying a credit card bill. A customer might love to see an offer for gifts on his friend’s birthday, but an offer for a holiday or hotel table bookings on his own birthday.

  •  Sharing is opt-out, privacy is opt-in

To get to a high of sophistication in offerings, bank must have a digital platform that is able to harness customer information. Today’s users are more aware about their rights, but at the same time willing to share more data in the public domain. So, banks should tap this data being shared voluntarily, which could be from social space or could be based on customer behavioral data available within the banks themselves.

In simple terms, digital is about breaking silos that exists between banks and customers. Not only between entities, silos also exist within banks, between various sections. Banks need to break this barrier to provide services that make sense to customer, or rather pre-empt a need before even customers can sense them. Data itself is another channel and going digital is a way to harness that data which in turn help banks become more relevant and offer contextual products.

 

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