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How Should Banks Approach Their Digital Banking Journey?

Much has been written over the last several years about the importance of banks transitioning their business to a digitally enabled bank. A recent report by Forrester on The State of Digital Banking Transformation, 2019, cited that many banks are struggling with their transformation initiatives and some haven’t even started. It has not kept pace with the evolving digital-first customer lifestyle. For banks to continue to be both relevant and competitive, especially with the advent of virtual banks and alternate fintech players, a robust and engaging digital presence across relevant digital touchpoints is required.

Deployment of a state-of-art, digital engagement platform, combined with the bank’s digital culture, innovative thinking and an intuitive user experience will result in increased customer acquisition and growth of existing customer relationships. But how should banks approach their digital banking journey? Here are the key things to consider:

1. Define clear milestones and objectives

Most banks today will have a high-level digital strategy.  The strategy, however, typically does not define the operational and customer needs that the bank desires to improve.  A clear roadmap of projects, with the holistic view of the strategy in mind, with clear milestones and objectives, is key.  Building in how results are measured will be key.  Every project should be defined by starting with the customer experience.  This is key to delivering projects that will accelerate and improve the bank’s digital strategy.

2. Tackle foundational challenges first

While the deployment of digital capabilities generally doesn’t require a “rip and replace” of core servicing systems,  these foundational IT components in the ecosystem must be accessible and functionally robust.  As an example, if there are connectivity challenges, they need to be addressed.  Foundational challenges don’t stop with the IT ecosystem.  But, also includes the “foundation” of the bank; meaning the culture and mindset shift required to be a competitor in today’s digital landscape.

3. Fear is not an option

Strong governance for the business and IT is required for delivering successful projects.  Don’t let fear drive the work.  More importantly, don’t let fear keep the bank from testing new technologies and innovations with the client base.  The days of banks being fast followers are coming to a close.  There is a balance between a fast follower and bleeding edge.  Find this for your bank.

4. Invest in a scalable technology platform

The importance of a digital engagement platform is underrated.  Keys to a technology platform (whether purchased or built) include developer enablement capabilities, support for an omnichannel digital approach, robust business functionality that is reusable and scalable, enterprise notifications that are relevant and timely and the operational robustness to provide the right levels of security and scalability as customer growth occurs.  Strong consideration for buying this technology should be considered.  Many banks who attempt to build these layers often find it more time consuming and costly than originally projected.

5. Keep abreast of customer trends

It is important for a bank to develop their digital banking roadmap keeping in mind the various touchpoints their digital-first customers experience. With the rise of the omni-digital customer and their quick adoption of new technologies, banks have to not only scale quickly but also identify the relevant channels to engage them.  For e.g. there is significant adoption of voice as a channel for performing transaction. Banks need to thus provide conversation assistants such as voice and chat to engage them effectively and also provide a seamless experience.

6. Embrace. Adapt. Deliver.

Digital Transformation is a journey, not a destination.  Continuous improvement is a MUST.  These are three key areas where banks can evolve, improve and deliver meaningful results:

  • Embracing changes such as leveraging new technologies and processes to address their business and operational challenges.
  • Adapt to the market and customers by keeping abreast of customer engagement trends and landscape
  • Deliver innovation iteratively.

 

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Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 25 July, 2019, 13:32Be the first to give this comment the thumbs up 0 likes

Sorry but the central theme of this post is unsubstantiated. It's easy to name drop reports from the Forresters of the world without linking to and / or quoting from them but can you list, say, five ways in which traditional banks have "not kept pace with the evolving digital-first customer lifestyle" but digital-only neobanks have?

If your broad brushstroke claim is true, how come neobanks haven't made much dent on traditional banks, despite coming into existence nearly a decade ago?

IMHO, prescriptions for improvement are more likely to be taken seriously when the problem definition is convincing. As of now, it's anything but.