When most people think about the term “Bank” they probably envision a retail branch with long queues, behind a rope waiting to seek the services of a teller or branch representative. Well those days are becoming more and more obsolete, as Gen Y and Millennials are seeking convenient, innovative, digital means of banking.
Banks need to elevate their game if they want to compete against the Neobanks by restructuring their organizations around how to provide flexible solutions to consumer needs instead of the traditional methods, which often meant working with isolated teams that worked within defined product mandates.
In the recent years, banks have tried to be more accommodating by unbundling banking services and improving their front end for retail customers via better customer care, new branding and pricing models. They have also started to change their business model from revenue driven to data driven and developing new services around real time payments. Additionally, they have adopted mobile technology – built bank apps and have enabled some digital banking services – and yet it’s still not enough. There is more the banks can do, to further improve the customer experience.
Banks in future, or to be precise ‘Banks of the future’ need to let go of their customers (not literally of course). What I mean is less hand-holding by providing more self-servicing capabilities. With fingerprint readers embedded in smartphones, card readers via NFC technology, and other new and emerging financial technologies, which ensure privacy and reduce fraud concerns, banks can empower their clientele with increasingly innovative technologies to facilitate the customer experience and improve customer satisfaction. Here are a few ways that can help the modern banks accomplish just that:
- Add digital payment options to mobile banking services to cut through standard banking red tape.
- Improve the Kiosks channels to do most of the functions with intuitive and easy to use steps for transaction processing
- Rather than compete with FinTech, learn to partner with them. Integrate with start-ups and fintech. Set up independent innovation labs that thrive on making customer experience with banking institutions contactless.
- Learn from Neobanks on how to provide digital and mobile first financial solutions, payments, money transfer, money lending and more.
- Amalgamate with social media payments to complete peer-to-peer transactions using virtual accounts at front-end, while keeping the banking information centralized to itself.
- Improve the physical card segments by completing transactions internationally without the need of card upgrades or getting a new card altogether when transacting across borders. Working on approaches like One Card for all transactions globally will take time and a lot of infrastructural and integrational changes, but the idea is not unlikely, considering a decade ago no one would have thought of sending money via Facebook or Twitter.
Indeed, technology will remove much of the face-to-face bank-customer interactions, which will be a convenience for customers, however, this may negatively impact customer loyalty. As it will be easy to open a new account at another bank, it will be easy to download a new app and it will be easy to walk away. As with any new approach, new problems will also arise, understanding the impact of these new solutions will go a long way in minimizing the impact to your customers and make the transition seem worthwhile and seamless.