It’s Time to Aggressively Pursue Digital Transformation in Financial Services
It might seem impossible to create a digital banking strategy that meets every customer preference. We can assure you—it’s not out of the question.
When was the last time you banked? Perhaps it was when you viewed your checking account balance. You might have recently deposited a check or made a withdrawal. You may have even inquired about a home loan or requested wealth management advice. Whatever the service, chances are your neighbor would prefer to engage in it differently than you. Same goes for your sibling, your close friend, and your coworker.
Next-gen banking means engagement at the individual account level. It extends across a wide generational spectrum and even beyond (after all, not every millennial, Gen Xer or Baby Boomer banks the same). These customer personas are constantly evolving, and will continue to for some time to come. So, how can financial service providers create a digital banking strategy that’s adaptive and forward-looking?
Surely, their mindsets must evolve alongside customers’ changing preferences and behaviors. At the same time, the technologies they implement are the key to becoming a truly hyper-personal brand. In focusing on the latter, here are 10 technologies Financial Services Providers (FSPs) should pursue if they wish to fire on all cylinders:
- Biometrics: Biometrics (i.e., voice, facial and fingerprint recognition) has become integral for authenticating individual customers and streamlining various processes. Consider Dubai-based Mashreq Bank: the provider recently partnered with Avaya to create customer experience solutions that include Emirates ID verification, allowing customers to complete complex, in-person transactions—like opening a bank account or applying for a credit card—on the spot.
- Analytics: The goal is for FSPs to inherently understand a customer segment of one. This is a challenge to say the least, considering the countless factors that influence preferences and behaviors. For instance, a channel’s usage rate can vary anywhere from 40% to 80% within an age group based on income level. Analytics is vital for intuitively understanding these nuances as they inevitably change to deliver deeper levels of personalization.
- Omnichannel: Banks need to enhance the channel, period. Nearly half of banking customers now interact via digital form only, skipping physical channels altogether (a notable increase from 27% in 2012). Providers must effortlessly integrate an entire new set of digital channels with tried-and-tested ones to create a powerful omnichannel capability that gathers, collects and provides data where and when that data is needed.
- Workflow optimization: Sure, providers need to improve workflow management and orchestration. Hyper-personal brands, however, will break barriers by building custom workflows that meet exact customer and vertical needs. Using an open software development kit (SDK), virtually anyone within the organization can create workflows to meet different business scenarios and regulatory requirements.
- System integration: We now live in an era of open banking, one in which existing systems can be seamlessly integrated with new platforms to simplify deployment and reduce operating costs. Consider Taiwan-based O-Bank: the brand has become the nation’s first all-digital, online-only bank using Avaya’s open standard architecture, which enables seamless integration with all current systems. This kind of open integration is key for future-proofing your digital banking strategy.
- Artificial Intelligence: Sentiment analysis. Mood assessment. Customer profiling. These are all cognitive AI initiatives that drive next-gen banking. Consider the power of AI for wealth advisory: Gartner estimates wealth management firms that fail to deploy AI-powered robo-advisors by 2021 will face a 30% decline in investment management revenue. From chatbots to virtual assistants, AI can help contextualize the individual banking experience.
- Blockchain: Every digital banking strategy should encompass blockchain, which offers innovative new levels of security, transparency, transaction history, and cost efficiency. The technology, which enables users to store and continually grow their list of financial records/transactions without exposing any confidential information, is key for managing virtual wallets, process payments and, of course, Bitcoin. The technology enables providers to capitalize on the alluring cryptocurrency market, which grew by 800% this year alone (Bitcoin accounted for half of this growth).
- Communication-enablement: Customers clearly communicate with their financial institutions in many ways. So, give them the opportunity to do so whenever and however they prefer with communication-enablement. Using that same open SDK, FSPs can embed custom communication capabilities like voice, video and chat directly into client-facing applications for instant and contextual engagement. Consider our customizable desktop device, Avaya Vantage: businesses can use ready-made applications from Avaya, install existing apps from the Google Play Store, or embed custom communication features into applications to create more personalized experiences.
- Data integration: New levels of data sharing are needed to better understand individual customer needs. Specifically, FSPs should work to create a real-time data repository for staff to track, collect and share relevant information across teams, processes and customer touchpoints. At the same time, the profit value of data integration is through the roof. In countries like Australia, for instance, the economic value of government data is estimated to be between $500 million and $25 billion per year.
- Automation: Automation is the key, particularly for proactive outreach. In India, for example, up to 85% of customers are willing to pay a monthly fee to receive automated social media notifications from their bank. No matter the difference in customers’ needs, automation helps providers more efficiently and contextually meet them.
When it comes to meeting heightened demand for availability, reliability, security and flexibility, there’s no shortcut. A whole new class of technologies is essential for accelerating the hyper-personalization of the customer experience, and financial institutions need to begin investing now.
To learn more about the technology behind hyper-personal banking, check out this IDC financial insights report.