The banking industry is going through a protracted transition from brick-and-mortar to digital channels. The ecosystem of utility-based banking is now firmly entrenched in the heart of the banking and finance industry.
With disruptions in the financial sector, users have become increasingly discerning and demand more synchronized financial digital solutions. Despite banks upgrading their services with cutting-edge technologies, consumer expectations are still unmet. Only 44% of banks today say with confidence that they provide personalized digital banking experiences that meet their clients’ expectations. While a streamlined and customized digital banking experience gives banks an edge over competitors, the small number of the banks achieving this is concerning. Whether it is a legacy bank or technology-first digital banks, their customers have more options than ever before and are unwilling to compromise.
Despite the many options, why are consumers still dissatisfied with their banking experience? How can banks close the gap between their services and the expectations of their consumers? Connected digital banking can be the answer the financial industry is looking for. By integrating various banking services and financial technologies, connected digital banking facilitates a smooth experience, irrespective of the digital platform. The functionalities connected under the framework range from online and mobile banking to personal finance management and budgeting tools.
Open banking is sometimes used interchangeably with connected digital banking. This is inaccurate. While open banking did open the doors for connected banking, it does not have the same level of personal data security. Due to its reliance on third parties, open banking poses an inherent threat of compromising their consumer’s personal information, even when the same is shared with their consent. Research states that around 40% of the US population is wary of banks using their personal information ethically, while nearly 62% of banks agree that data security requires more effort from their end. This is where connected digital banking becomes relevant, as it enables screen scraping with more secure APIs. In fact, with connected digital banking, financial institutions can even limit the data they share with a third party and customize it to accommodate both the customer’s consent and the third party’s data requirements.
On the bank’s end, orchestrating a connected digital experience for the customer is a four-step process:
Tighter Core Banking Integration with Branch Automation
Bank customers deserve a consistent service experience across branches. More often than not, users face difficulties dealing with branches that do not have adequate information sharing and different processes. A well-integrated, robust service system across branches is vital for growth and automation is the way banks can achieve this end. That’s the reason behind the robust growth of the business process automation market. With $12.4 billion recorded in 2022 and $14.02 billion estimated for 2023, the sector is anticipated to generate a CAGR of 13.1% to reach $22.94 billion by 2027. Banks can standardize their entire activity structure by venturing into automation possibilities, from core banking to ancillary activities.
Digital Banking Services
While the pandemic and entry of digital natives into the customer base have fueled the demand for seamless banking solutions, financial institutions continue to face challenges in digital tranformation. Digitalization has emerged as a tremendous opportunity given that over 27% of US citizens only use online banking and over 60% intend to do so in the near future. Banks will eventually need to revamp their processes and become digital. By starting earlier, they can take advantage of the industry’s anticipated 11.3% CAGR by 2026.
Big Data Analytics
Big data analytics is crucial in each industry, especially where direct customer communication is involved, and banks are no exception. With big data, banks can analyze vast amounts of customer data and gain insights that can be used to improve decision making, detect fraud, segment customers, manage risks, and optimize operations. There were around 54 million verified digital banking users as of 2022, and each one represents a vast amount of data. Not making optimum use of the quantum of data produced by this industry will result in forgone opportunities.
Round-the-Clock Customer Support
Social media has redefined both informal and formal conversations. The world spends hours a day on social platforms, with a semi-blurred line between the real- and reel-world. What this means for a connected digital banking solution, or any other industry, is the need for round-the-clock customer support. If the customer is awake, then so should financial service providers.
While consumers are vocal about their banking experience, organizations underestimate subpar customer support around 38% of the times. What is more fascinating is that around 73% of organizations agree that there is a direct link between customer service and business performance. It makes a strong case for the need for quick actions by banks to ensure a 24/7 support system that ensures customer satisfaction.
Connected digital banking is the way forward for the financial sector. Customers stand to gain from a connected digital framework, which also offers financial institutions a host of benefits. The advantages to customers include convenience, security, comfort, and engagement. Banks can benefit by improving their operational efficiency, reducing costs, and further improving customer engagement and retention. Connected digital banking also provides banks with valuable customer data that can be used to enhance their offerings. With a more efficient, convenient, and personalized banking experience for customers and a plethora of opportunities for financial institutions, connected digital banking presents ways to grow your business.
If you’re interested in exploring how banks can provide a connected digital experience to customers, get in touch with us today.
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