Digital transformation of the financial services industry has been one of the sector’s most pressing challenges of the past few years. As big data collides with an always on—and smartphone carrying—customer base, banks are scrambling to evolve so they can remain relevant and valued by their customers. We’ve spoken before on the blog on the importance of continuing to innovate, and in this post, we’ll cover the factors banks will need to take into account as they seek to complete their journey.
Introducing the 3Ps of digital transformation
Product
This is one of the most crucial aspects to get right as it provides a distinct competitive differentiator. Research from Viacom shows that 53% of millennials do not think their bank offers anything different. This must be addressed, and soon.
Banks need to think about how they can offer exceptional mobile banking services with personalized offers, real-time customer service and budgeting advice tailored to each customer. In an omnichannel banking era, the customer has become the point-of-sale. If you aren’t thinking about the customer experience at every stage, retention will decline. 31 per cent of customers used to mobile banking would consider changing bank if the experience was poor. And this sentiment will only increase as disruptive challenger banks built on mobile continue to gain prominence.
People
The bank branch was for decades one of the mainstays of any community, with the manager known by everyone. Nowadays branches are being closed, and customer service phone lines automated or outsourced. Some banks are in danger of omitting one of the most important features of what has made them the institutions they have become; the relationship with their customers.
Banks must recapture that sense of familiarity so their customers value and appreciate each and every interaction. This isn’t just mortgage and loan negotiations, but also on-boarding, cross-selling and dealing with any issues that arise—whether in branch, online, or on mobile. Challenger banks must think hard about how they communicate without the advantage of face-to-face branch interactions.
The good news is that many day-to-day banking tasks can be automated which delivers efficiencies for banks, but also streamlines and improves the customer experience too.
Process
Completing the digital transformation is no mean feat, and persevering to achieve the vision can be difficult as it can seem never ending. The important thing to note is that the process comes to be seen as continuous. Technology, regulation and methods of banking will always continue to evolve. Witness the current excitement over the blockchain as the latest trend forecast to disrupt the landscape once again.
Decision makers must become comfortable with the unknown, and have the confidence to deploy technology and processes that are flexible to shifting trends. Digital transformation is disruptive and there is nothing to suggest it will slow down. The critical factor is banks’ ability to forecast how these new developments will impact their organizations, and how their response will improve the experience for customers and returns for investors.
We go into much more depth on our dedicated site here, and if you’re interested in hearing more sign up for our webinar on November 22. If you’re involved in or have completed a digital transformation project, we’d love to hear your thoughts either in the comments below or @Gemalto.
