In a post COVID-19 world, changing customer behavior reflects the impact of digitization and digital transformation. With digital banking services elevating customer’s banking experience, the banking industry notices a visible impact.
The emergence of digitalization in banking, brings with it fierce competition. Banks have to win the digital space today because that’s where the customers are. To stay ahead of the game, it is important to develop a correct mix of business strategy, innovation, new technologies, data management, detailed customer journey understanding, and appropriate risk management and control frameworks.
Here are five ways in which banks can come up with a winning digital banking strategy.
1. Put Customers at The Center of Your Business
Integrating a customer-centric approach is becoming increasingly important in the digital era. Digital banks need to engage with customers differently, put them at the heart of their offerings. Form an emotional connection with the customers and stay relevant and wanted, by integrating personalization and positive experiences.
If you are an established bank, it can be challenging to retain customers by maximizing value from your ‘usual delivery’ channels while simultaneously grabbing unbanked or unserved customers through the digital route. Instead, replacing your product-centric approach with a customer-centric approach can do better for your bottom line. Most banks use this approach to integrate all their digital banking services into a seamless customer experience as they leave behind the silo approach to sell various products and services.
2. Put Innovation at The Core of All Strategies
Digital banking requires banks to embrace and place innovation at the center of their decision-making processes and forming strategies. It needs to start at the top, and those in leadership roles need to realize the importance of adopting a risk-taking approach. This is because innovation comes with a certain amount of risk, and a risk-averse mindset can cause you to lose out on lucrative opportunities for innovation.
An established bank can keep up with the banking and financial sector changes by being agile and innovative. This will go a long way in creating a dramatic shift in your positioning in the digital banking industry.
People often forget what you say or do, but they will remember how you made them feel. This goes well for the banking industry, as digital banking is about deepening that relationship with customers.
By leveraging the power of data analytics, banks can understand and analyze customer behavior trends from the past and use that knowledge to formulate suitable digital banking strategies. This will make your customers emotionally engaged and make their journey personalized with a human touch.
For instance, with digital banking, banks can target customers using a loan refinance or measure someone’s credit score to get faster loan approvals.
Research conducted by Boston Consulting Group revealed that 83% of digital ecosystems involve partners from more than three industries and 53% from more than five.
Partnering with other companies in the banking and finance industry is important for organizations to develop and sustain ecosystems that can attract customers by delivering an end-to-end customer experience. Doing so helps the organization to drive more business value by removing frustrations with technology and legacy systems. It gives more insights into an expanded customer base by leveraging your partners’ experiences and targeting the unserved customers.
However, to succeed there needs to be a proper selection and management of the right mix of partners and collaborators.
Designing and deploying new banking technology solutions to support your digital banking services can be exciting for sure. However, digitalization in banking brings out a new range of security risks that must be anticipated and managed well in advance. Banks need to ensure that such developments adhere to relevant regulatory requirements from the beginning.
Establishing a control and risk assessment framework can go a long way in building a sustainable and robust business plan in line with the regulatory requirements. Furthermore, such frameworks help with accelerating digital transformation by putting some of the power back into the customers’ hands.
A thoughtful and well-executed digital banking strategy can help raise financial awareness and literacy amongst the masses apart from delivering business value to banking and financial institutions.
At Wipro, we want to help our customers evolve with the demands of their customers. As a digital banking enabler, we support you by providing the best banking IT solutions and essential banking consulting services. This will help you provide an engaging digital banking experience to your customers and unfold infinite possibilities for your business.