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Embracing the future with Digital Transformation in Consumer Banking

Digital Transformation in Consumer Banking

Providing an end-to-end digital experience replete with online and digital services and overhauling the existing back-end system with sophisticated high-end technology is a daunting task that most banks have been reluctant to do. However, shifting customer expectations demands the necessity for this digital transformation.

Without constantly evolving to meet the needs of these demands, services can go obsolete. Backing away from digital transformation can have drastic repercussions in the consumer banking service sector. Let us look into why digital transformation is necessary and what steps banks can take to further their efforts in this transformative journey.

The Impact on Banking due to COVID-19

The banking sector was unhurriedly taking tentative steps towards a digital future. But, the pandemic changed everything. Factors, such as reduced staff, closed branches, limited hours, and fear of exposure forced people to change their usual way of banking. People were adapting to technologies at an unprecedented level which otherwise would have taken them years. For example, there was an increasing trend in using online banking, mobile wallets, and QR codes. 

A report states that nearly a quarter of the existing consumers are using at least one form of digital banking solution since the onset of COVID-19. Another underlying factor is that almost 49% of the older generation preferred online and mobile banking solutions even before the pandemic started. 

Customer Expectations

Even before the pandemic started, there has been a gradual shift in customer expectations. While the older generation is the majority of the customer base, millennials are poised to inherit from them. Millennials growing up in the era of the internet revolution are tech-savvy expecting digitized and on-the-go solutions. This shifting customer expectation will accelerate further down the road as the digital revolution takes over every niche.

With every other industry spearheading towards a more digital approach to their services, it is only a matter of time before it overtakes the banking industry. Sufficiently preparing for the change is the only way to stay afloat in the future.

Changing Criteria

Traditionally, it was much easier for banks to acquire customers, as there were limited criteria that customers considered while choosing their primary bank. People chose the easiest and convenient banks close to their place of residence. 

Today, customers evaluate banks over a large spectrum of criteria, such as customer services, mobile banking ease, annual fees, incentives, cash limits, etc. Without catering to these shifting changes, banks can lose out to competition in acquiring customers and retaining them.

Increased Competition

Tech giants’ entry into the banking sector also poses a challenge to traditional banking methodologies as customers usually attach a higher level of digital expertise to them.  Customers also tend to have a higher emotional connection with these brands as opposed to their primary banks.  

Tech Giants, such as Apple, Google, and Amazon, leverage their in-hand data to create a personalized experience for their customers. Personalization can become a game-changer since a multitude of banking options is available to banking customers. If banks do not extend a personalized customer experience, customers will flock to the competitors who can. 

Top 5 Things Banks Should Do Now

Every bank should understand the customer’s lifecycle and equip them with the right tools to improve their experiences for a better future. However, the process must not be too daunting enough to discourage customers. Banks should maintain the right balance between customers who prefer traditional banking methods and those that prefer digital ones.

  • Improve Mobile Experience

Mobile banking provides tremendous potential in increasing engagement with users. Banks can leverage this continued connectivity through mobile banking applications. Banks can move away from phone calls to push notifications. However, poorly designed user interfaces and snaggy user experiences can cause considerable reluctance among customers in adopting mobile apps. Without a consumer-first approach, mobile apps can fail.

  • Adapt Intuitive Digital Assistants

Almost all service-based websites have a Chabot and help tools for customer engagement. Chatbots can provide real-time services. Banks can take one step ahead and provide customer service solutions through chat services instead of one-on-one calling. Many international banks have already jumped into this bandwagon, famous among them being Bank of America’s Erica. 

  • Digital-Only Banking Solutions

Banks are also embracing the digital-only banking solution to better cater to time-crunched customers who expect services on the go. You can do basic banking tasks such as opening a new account, making bill payments, checking account balance, etc. 

Though digital-only banking is in its developing stage, banks can save on overhead costs and provide users with a seamless service. JP Morgan’s Finn was a classic example targeting the millennial group. With its AutoSave feature, consumers could create a rule to save a particular amount for each dollar spent.

  • Connection to Third-Party Assistants

Google Home and Amazon Alexa have made a nest in many homes around the world. Integrating banking solutions with these home automation gadgets can improve users’ omnichannel experience. It would also enhance the customer’s emotional association with banks.

  • Automate Repetitive Tasks

By automating repetitive tasks, banks can improve efficiency and reduce the margin of human error. Bank can use their valuable time focusing on important decision-making tasks. It can also reduce operational costs.

Neutrinos – Low-Code Banking Solutions

Although customer satisfaction is relative and varies from generation to generation, digital transformation is no longer about its necessity and instead is now a matter of when and how soon. Contrary to the belief that digital transformation can take away the emotional ties customers have with their banks, a personalized approach to banking is possible with digitalization. 

The future of banking could become only mobile banking. Social media is also paving a new path for banks to communicate. All these multiple opportunities open up a large window of opportunities in consumer banking.

At Neutrinos, we offer digital banking solutions to build stronger relationships with customers. We are a multi-experience development company offering low-code banking solutions with an omnichannel platform. 

Read our blog “How to Achieve Digital Transformation Using Low Code” for more information.

All low-code banking solutions are customer-centric to ensure the highest level of customer experience. To understand how you can achieve digital transformation in the banking sector, contact Neutrinos now.

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