Six steps to accelerating digital transformation in banking

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Customer Experience
Digital Branch
Digital Transformation
In the mid-90s, Bill Gates said that 'banking is necessary, banks are not.' Since then, the industry has certainly seen plenty of disruption from FinTech startups, particularly in payments, money transfers, and personal finance. Yet, despite it all, banks are still here, still innovating and thriving.

Now, banks are facing competition from the tech giants. According to a recent Bain and Company survey -conducted in 29 countries- on customer loyalty in retail banking, 54% of respondents said they would trust a big tech company with their money more than banks in general. As just one example, 65% of Amazon Prime customers are open to banking with Amazon if offered 2% cashback on their Amazon shopping.

Traditional banks have a Big Data asset

Big tech companies excel at digital customer experience and banks will need to harness the same skills to stay relevant and reimagine themselves digitally. But, one of the biggest advantages and opportunities traditional banks have is the vast amount of data they hold on their millions of customers. That data goldmine has been growing exponentially as customers increasingly adopt digital channels and banks collect more data on these interactions.

Transforming customer experience

The big questions for banks now on their digital transformation journey are around how they exploit and apply their big data assets. This is essential to gain deep customer insight, create exceptional customer experiences, re-imagine products and services, and run a more efficient business. Customers are visiting your website and branches, buying products and commenting on social media. There's data flowing about each interaction, and that's fuel. If you take it and analyse it, you can gain intelligence and learn a lot about. But today, what is lacking is data connectivity.

Many banks have complex legacy systems and siloed data. Forming cross-organizational analytics teams and applying AI and machine learning will start to yield the insight required to transform customer experience. And, those experiences will provide more data to further understand patterns, predict outcomes, improve processes and refine interactions.

Six steps to transforming the banking customer journey to make it a more Amazon or Netflix-like experience

STEP 1: Master Data Management

The applications for data in personal and corporate finance are endless. They range from more accurate risk analysis to real-time personalization. For example, when you book a flight your banking app is now likely to generate a travel insurance offer.

Yet, many financial institutions don't have unique customer IDs with customer data from multiple core banking systems merged into one customer reference. This is one of the foundational steps in digital transformation. VeriPark's 360 Degree View of Customer feature provides a consolidated view of the customer's relationship with you, their transaction history and channel interactions – it normally consists of between 250-500 elements of stored data.

STEP 2: Develop Straight-through Processing (STP)

When banks automate manual processes it saves time, money and meets customers' demands for real-time answers across all delivery channels. For example, we have found it is perfectly possible to consolidate 20 online or mobile applications into one effective CRM system. That means you don't need to maintain, update and train your teams on multiple applications.

STEP 3: Go paperless

Most banks have started this process. Digital operations save time and it is more environmentally friendly. It also creates more customer-friendly service interactions and transactions and avoids unnecessary branch visits.

STEP 4: Embrace Omni-channel delivery

Millennial and Gen Z customers, in particular, expect to interact with their bank anytime, anywhere. Just as they do with Amazon or Netflix. VeriPark's VeriChannel platform, for example, allows banks to add new channels, such as mobile wallet or chatbot, within the same framework rather than investing in the development and deployment of new systems.

STEP 5: Implement Unified Front End (UFE)

This application enables bank branches and contact centers to deliver unified communications, richer collaboration, enhanced productivity and faster business decision making. Teams manage daily tasks more quickly with one login, navigation menu and an intuitive, easy to use application over-laying all existing back-end systems. 

UFE provides much more than cost and efficiency gains. It transforms traditionally product-centric organizations to ones that meet customer needs in an engaging way. And, it creates cross-sell and up-sell opportunities as machine learning models can predict the next best action to present to the customer.

STEP 6: Develop a strong self-service proposition

Bank branches are starting to look quite futuristic. No more tellers sitting behind glass screens. Instead, there are virtual meet and greeters, and self-service banking zones with digital touch screens alongside more private, assisted kiosks. And, good coffee.

Such digital branches are a big differentiator for banks. The research shows customers still value face-to-face consultations, particularly for more complex financial decision-making and advice. They just want them to be convenient, seamless and engaging. Mobile appointment making, for example, saves time and avoids frustrating queuing.

Banks are already deeply immersed in the digital agenda and transforming at a dramatic pace. But, there is much more to do to make banking simpler, more efficient and able to compete with new entrants. Accelerating the time to market of digital banking services will significantly improve business processes and outcomes.