What’s next for retail banking? Here are 6 digital transformation strategies to thrive in the ‘new normal’
The pandemic isn't over and it's impossible to predict exactly how the retail banking landscape will look as the world, slowly and unevenly, emerges from lockdown. But, we're likely to be dealing with an era of uncertainty, social distancing and economic disruption for some time. Banks are juggling multiple priorities, including managing revenue and low interest rates alongside increasing demands from customers who are changing their behaviors as they deal with their own financial pressures.
How you deal with these challenges will not only define the future of your bank's brand; it will significantly affect your customers, employees and the wider economy. Business planning in this uncertain environment is incredibly difficult. But, there has never been a more important time for banks to embrace the opportunities offered by digital transformation.
Here are 6 strategies retail banks can act on right now, to support their customers and ensure they are well-placed to thrive in a post-COVID-19 world.
1. Develop a 360 degree view of the customer
Understanding your customers, showing empathy and providing personalized and COVID-19 sensitive customer service is essential. As this crisis is affecting people differently, there's no one-size-fits-all approach. Some groups will be feeling much more vulnerable than others.
With a 360 degree view of the customer, banks can see the full customer interaction history and have an understanding of the entire context of the customer relationship. When banks know more about their customers and their needs, they can communicate more effectively, nurture longer, more valuable customer relationships.
2. Embrace a digital/mobile first strategy
There's no doubt COVID-19 has already driven a rise in online and mobile banking and a fall in branch visits. Delivering an outstanding digital customer experience is now a major differentiator and competitive advantage for banks. Research from McKinsey has revealed that customers who are highly satisfied with their digital experience are two-and-a-half times more likely to open new accounts with their existing bank.
As customers use branches less, banks will need to become experts in digital customer acquisition, cross-sell, upsell and servicing. For many, this will involve a major shift from purely transactional digital banking apps to a more engaging, customer centric approach. Digital customers need advice and support with managing their personal finances, just as much as branch customers.
3. Win customers with tailored product recommendations
Banks have an opportunity to develop products that can help their customers through this crisis. For example, a low interest loan issued at speed via a digital lending platform will be a lifeline for many customers. An effective omni-channel CRM platform will alert banking agents and advisers to a relevant Next Best Action (NBA) based on individual customer histories and transactions. This avoids banks being perceived as distant or insensitive and trying to take advantage of the crisis.
4. Redesign branches as digital advice hubs
Customer behavior is shifting. They have broadly welcomed the convenience of managing their finances through online and mobile channels. However, the in-branch experience is still one of the biggest drivers of both customer satisfaction and sales.
As a result of COVID-19, customers will be more hesitant about visiting branches without the proper social distancing requirements in place. But, digital branches that offer self-service or assisted channels, particularly no-touch ATMs with QR code scanning, will thrive. In addition, many customers will welcome face-to-face advice for high-value services such as mortgages and investments and branch advisers are ideally placed to educate and inform customers about using digital channels.
5. Adopt remote or hybrid working to keep employees safe
During lockdowns banks moved swiftly and efficiently to remote working. With so much uncertainty, it is vital to ensure employees have the support and technology to continue operating remotely. Banks will always need to be ready to adapt to new risks, such as if renewed spikes of the virus lead to more restrictions.
Remote working knows no borders. With VeriPark's branch automation solution VeriBranch, banks can provide their employees with the necessary infrastructure to make sure they are equipped with everything they need in a remote work environment. The solution ensures streamlined, reliable access. Bank tellers can execute transactions such as loan origination, account origination and transfers. Relationship Managers and advisors can continue engaging customers and provide personalized financial planning services, all while working remotely.
6. Keep an eye on the future of the digital customer journey
Visionary banks are always looking at ways to improve the customer journey. That includes assessing the potential of new channels, such as chatbots or WhatsApp. Chatbots, for example, now have both transactional and conversational capabilities and enable banks to offer 24/7 services to boost customer loyalty and sales. WhatsApp is one of the most popular instant messaging applications in the world and has the potential for banking customers to access transactional support and get fast answers to their questions.
Reimagining the banking experience with digital as the default channel
COVID-19 has become the catalyst for digital transformation acceleration in just a few months. We believe this will continue as retail banks rapidly transform themselves into truly effective digital organizations.
The future banking landscape is likely to include new digital strategies for everything from customer engagement to remote working. Physical interaction was once the default option. Now, in most instances, digital will be the default channel.
