Digitizing the Banking Experience

12 Jan 2016
Digital transformation in banking has many forms and shapes,and is changing various aspects ranging from back office to customer touch points, infrastructure, business applications, and more. Today’s digital customer expects a holistic personalized experience at all times and across all channels.
Indian consumers are becoming more and more tech savvy, regularly using a wide variety of different social media and communications platforms.Consumers expect to be offered a variety of channels to communicate with organizations where they also want their preference of technology they are most familiar with.

The core functions of banks remain the same over time where Customer Lifetime Value (CLV) management is determined by the process of acquisition, retention, development, and collection. What is really changing is how banks are adapting to changing customer behaviors and demographics, which is now an outside-in customer first approach, powered by new advancements in technology. With this approach, banks are transforming into customer centric organizations, where the business model is determined and developed to address customer needs and concerns with the aim to create a new trust-based bond with their customers.

Technology is key to the implementation of this approach where it is clear that it is not only reshaping the experience of banking customers, but alsorevolutionizing their internal processes, making them more efficient and more productive. The change in customer expectations is forcing banks to invest in their core systems and processes to meet these dynamic needs.

Many of the changes banks must make to the customer experience are driven by the growth in mobile and smartphone ownership and use. Customers now expect to be able to check their balance and make transfers through their phones, at the minimum. The channels to interact with existing and potential customers have expanded significantly to include wearable technology and social media to name a few.

Point in case is Emirates NBD Bank which, in fulfilling an ‘on the go’ banking experience to its customers, introduced a biometrics log-in capability, where customers can use a Touch ID on the Emirates NBD Mobile Banking App to log into their account securely. The bank also provides a mobile cheque deposit facility and a ‘Mobile Queuing Ticket' service that enables customers to obtain a queuing ticket for their branch transactions via the mobile app, even before reaching thebranch, thus reducing the waiting time upon arrival. These are some of many digital customer experience scenarios that banks are leading with to transform their banking experience.

But delivering banking services on smart devices is part of the holistic change. Customers today want an Omni channel experience,which technology provides through a customer centric channels strategypowered by analytics and big data; individuals can escalate and switch between channels of communication (be it web, social media, phone or even a video-conversation with an agent at a video-enabled ATM) without losing context, and without the need to repeat themselves again and again.Better use of customer data transforms the customer experience makingbanksbetter placed to understand customer needs and behaviors. Technology allows for a situation where banks can recognize customers transparently based on their voice print and take real-time actions to serve thembetter.

An interesting trend to keep track of is  the tremendous decline in branch transactions as reported by some of the leading banks in the country,where close to three fourth of transactions are completed through digital and online channels. Therefore the economics of brick and mortar branches are changing, causing banks tono longer lookto expand and invest in traditional branches.Instead, banks are now putting their efforts intoexploring and experimenting with the concept of a smart digital branch as either an alternative or an extension to physical branches. A digital branch, in its simplest form, includes a video contact center channel that is integrated with firstly, a smart multipurpose kiosk equipped with all peripherals required to facilitate and automate branch transaction, and secondly,back end systems and applications through commonly used open connectivity standards. These characteristics enable the bank to deliver almost all their branch services in three modes: self-service, assisted service or assisted self-service. The digital branch provides customer access to a centralized pool of remote banking experts through simultaneous video chat and co-browsing sessions around the clock in a complete, secure and private way. Since all the resources are centralized, these branches are 80% less expensive in comparison to the total cost of ownership (TCO) of a physical branch.

The future of banking points towards the mass adoption of fully automated digital branches which perform all of the functions of a regular bank. Banking in the digital age includes consumer messaging for businesses which includes the likes of weChat, Whatsapp and Facebook for Work. Cashless, cardless and branchless banking are already adopted by the banks spearheading technology innovations.For example,Near Field Communication or NFC stickers are now being used for mobile payments which convert any phone into a credit card through technology that helps it communicate wirelessly and securely with payment terminals. NFC is also being implemented to reduce queue time in banks orin frontof ATMs, as well as mobile wallet services providing for digital wallets that simplifies the process of receiving money, paying for bills and transacting easily, safely and conveniently.

As Brett King, the author of “Bank 3.0” rightly said “Banking is no longer somewhere you go to, but something you do”. This clearly underlines the need for the transformation of the banking industry aided by technology which is present today and continues to evolve with every passing day.

This article appeared in Banking Frontiers , January 12, 2016