How to identify new digital opportunities for a bank?
Consumers all over the world are quickly adopting digital banking. Digital technology has enabled rapid innovation in payments and several broader transformations in systems.
The banking industry has been experiencing dramatic changes as a result of changing customer behavior. Customers have increased expectations, and are actively looking for organizations that show and embody channel proliferation, disruption, and innovative uses of technology and digitization of business. As an impact of all these factors, banks have started going digital. The digital banking transformations that are taking place have presented the banking sector with several opportunities. But when it comes to implementing these innovative digital opportunities, banks have been relatively slowed because of regulatory and compliance challenges.
For example, PayPal had to completely revolutionize online payments so that smartphone users could easily pay for goods and services. Thus, banks undergoing digitalization must adopt an enterprise-wide approach and focus on identifying potential digital opportunities to meet consumers’ expectations.
User-centric design
McKinsey articulates brilliantly when it says that a customer’s overall journey should be “compelling, highly differentiated, personalized and should involve easy to use processes such as applying and getting approved for a loan, opening and understanding how to make full use of an account, and reconciling payments”. Customers today are demanding greater access to their banks, like access to better apps, responsive websites, personalized call support, and remodeled branches. Thus, banks should ensure that they are providing their customers with a consistent experience across all touchpoints. Other key factors for providing a seamless user experience consist of an information architecture, wireframes, personas, campaign management and session management.
Banks also need to develop a comprehensive business plan that assesses risks and eliminates constraints, both organizational and procedural, across various LOBs. This way, they will be able to deliver better value to internal and external stakeholders. To make this change, banks need to act quickly to acquire deep capabilities in user experience and user interfaces.
Leveraging Data and Advanced Analytics
Most of the finance data still goes unused today. Having precise information is the key for banks to understand their customers and create unique digital personas for tailored interactions. Financial instruments and transaction processing involve interchanging large volumes of data from multiple sources. According to one estimate, this task of leveraging data accounts for as much as 92% of the cost of the financial services business! Thus, digital banks should develop a new set of plans and policies that can control, protect and enhance the value of data and information assets.
Along with leveraging data, there is a significant need for applying advanced analytics to create targeted offerings for cross-selling and up-selling. Analytics capabilities should consist of multi-dimensional analysis by geography, customer type, product, channel, campaign, traffic source, and web page. It should also involve the ability to track customer behaviour that can be correlated with revenue-driving activities, thereby nurturing cross-selling opportunities.
Rapid Experimentation in Digital Banking
Banks should learn to rapidly acquire or imitate high-value initiatives and must demonstrate tolerance of failures in trials. Thus, rapid experimentation and agile development approach should be adopted for identifying new digital opportunities and gaining business value.
To make optimum use of digital opportunities available today, banks need to act strategically. They must provide the cohesive, cross-channel experience that customers expect. Thus, by embracing a holistic and streamlined approach, banks can successfully identify and evaluate new emerging digital opportunities and select the ones that best fit their strategy.
Featured in: Banking & Finance, India, India Tech And Startups, Technology
The banking industry has been experiencing dramatic changes as a result of changing customer behavior. Customers have increased expectations, and are actively looking for organizations that show and embody channel proliferation, disruption, and innovative uses of technology and digitization of business. As an impact of all these factors, banks have started going digital. The digital banking transformations that are taking place have presented the banking sector with several opportunities. But when it comes to implementing these innovative digital opportunities, banks have been relatively slowed because of regulatory and compliance challenges.
For example, PayPal had to completely revolutionize online payments so that smartphone users could easily pay for goods and services. Thus, banks undergoing digitalization must adopt an enterprise-wide approach and focus on identifying potential digital opportunities to meet consumers’ expectations.
User-centric design
McKinsey articulates brilliantly when it says that a customer’s overall journey should be “compelling, highly differentiated, personalized and should involve easy to use processes such as applying and getting approved for a loan, opening and understanding how to make full use of an account, and reconciling payments”. Customers today are demanding greater access to their banks, like access to better apps, responsive websites, personalized call support, and remodeled branches. Thus, banks should ensure that they are providing their customers with a consistent experience across all touchpoints. Other key factors for providing a seamless user experience consist of an information architecture, wireframes, personas, campaign management and session management.
Banks also need to develop a comprehensive business plan that assesses risks and eliminates constraints, both organizational and procedural, across various LOBs. This way, they will be able to deliver better value to internal and external stakeholders. To make this change, banks need to act quickly to acquire deep capabilities in user experience and user interfaces.
Leveraging Data and Advanced Analytics
Most of the finance data still goes unused today. Having precise information is the key for banks to understand their customers and create unique digital personas for tailored interactions. Financial instruments and transaction processing involve interchanging large volumes of data from multiple sources. According to one estimate, this task of leveraging data accounts for as much as 92% of the cost of the financial services business! Thus, digital banks should develop a new set of plans and policies that can control, protect and enhance the value of data and information assets.
Along with leveraging data, there is a significant need for applying advanced analytics to create targeted offerings for cross-selling and up-selling. Analytics capabilities should consist of multi-dimensional analysis by geography, customer type, product, channel, campaign, traffic source, and web page. It should also involve the ability to track customer behaviour that can be correlated with revenue-driving activities, thereby nurturing cross-selling opportunities.
Rapid Experimentation in Digital Banking
Banks should learn to rapidly acquire or imitate high-value initiatives and must demonstrate tolerance of failures in trials. Thus, rapid experimentation and agile development approach should be adopted for identifying new digital opportunities and gaining business value.
To make optimum use of digital opportunities available today, banks need to act strategically. They must provide the cohesive, cross-channel experience that customers expect. Thus, by embracing a holistic and streamlined approach, banks can successfully identify and evaluate new emerging digital opportunities and select the ones that best fit their strategy.
Featured in: Banking & Finance, India, India Tech And Startups, Technology
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