While digital transformation has brought a fair share of buzz in the past, it is often mistaken for mere online banking. In today’s post pandemic world, the next generation is rapidly reshaping the world and driving seismic shifts in consumer behavior. And so, financial applications have become the front door of banks, bypassing ATMs and branches. In sync, customers are now heavily attracted towards a top-notch customer experience coupled with strong wealth management advisory. Beyond great experiences, it strengthens human channels with the best and relevant technology to gather enough insights to maximize the critical customer moments.
On a high level, a hyper-personalized banking service alone isn’t a winner; customers look for resilient technology stacks that are continuously strengthening security and providing the bare minimum, at all times from anywhere. Banks need to use data and behavioral analytics to improve and augment the customer acquisition process continuously. Identifying the right friction points, where the customer journey stalls and errors occur, allow for incremental but significant scope for improvement.
You may ask, so what then will curb the generational divide? Here are our two cents.
1. Customer acquisition lies in seamless self-onboarding
Digital self-onboarding enables customers to open accounts at their convenience. Simplifying this process not only cuts down acquisition time to less than 5 minutes but also streamlines data collection. Leveraging remote ID verification services and Optical Character Recognition (OCR) to automate document verification and validation steps is also a massive value-add, thus relieving established institutions from the age-old daunting paperwork.
2. Instant Payments
Creating scope for effective instant money transfers between internal accounts and other banks alike checks the convenience box and keeps your customers within the ecosystem. Partnering with third-party APIs like Apple and Google Pay also goes a long way in modernizing payment strategies to incorporate convenience into the core of payments. Also, automating monthly and annual payments can be centralized along with bulk transfers, thus completely removing the hassle of scheduling multiple recurring payments and transactions.
3. Intuitive Loan Applications
A rock-solid digital transformation allows customers to effortlessly diversify and invest through an access to credit/debit card management and loan applications, from the comfort of their couches. The ability to own integrated financial decisions in just a few clicks not only saves time in data collation but also improves conversion rates in the long run.
4. Promising Security Standards
To provide a next-generation customer experience, banks and financial institutions need to comply with strict regulatory data requirements and implement best industry practices. Biometric multi-factor authentications, location-based security, suspicious activity notifications, card tokenization, and predictive fraud detection systems are a must for a modern banking experience.
5. Personal Finance Management (PFM)
Today’s generation is all for financial literacy that aids the improvement of their financial behavior and spending habits. Robo Advisors (aka Digital Wealth Managers) create access to monthly budgets demarcating spending and saving goals. This regular monitoring guides customers to make more judicious decisions, while cultivating a sense of trust and loyalty with the institution. This real-time engagement scheme can also be translated towards bigger long-term investments that are more likely to experience a steady growth with little investments at regular intervals.
While the diverse expectations can be overwhelming, it is imperative to understand where institutions must place their focus on. At the root of the transition lies a critical need for automation, artificial intelligence and a data-driven cloud strategy that will eventually hold the future of banking on its base.
To lead and thrive, banks must rise to engaging the younger and massively consequential consumers, through more than just adding digital features to legacy offerings, i.e., simply digitizing current experiences will not drive growth. In sync, it is vital to tap into fertile market segments and offer differentiated value propositions. The apt next-gen innovation is as much about where you innovate as it is what you innovate on. The surge in startup challengers call for rapid identification and iterative progress of new opportunities, eventually ramping up into quick go-to-market strategies that closely focus on consumer habits, expectations, and preferences.
Recommended Read: What Corporate Banks can do to Accentuate their Journey to Digitization
So, here’s what banks could potentially do.
For much of the generation, technology is only a part of the valuation. The focus on a customer-centric digital ecosystem, beyond a killer UX is more likely to bring the sense of ‘community’ and ‘engagement’ into the banking game. As we have all seen it first-hand, technology fatigue is real and can be overpowering to say the least. So, iterative gamification, post-engagement marketing and meaningful content are critical for institutions to do justice with digital convenience and financial literacy while not entirely letting go of fostering authentic relationships.
These true digital natives expect intuitive experiences that entail a degree of instant gratification. This is translated into banking experiences, where quick interactions and accessibility are paramount. So, banks seeking to attract and retain young customers need to overhaul their technology infrastructure by breaking down silos, reevaluating cloud strategies, modernizing their core, to eventually enable streamlined innovation and bring new digital products to market faster.
It is also critical for banks to partner with the right third-party integrations and smart analytics engines to create a mature ecosystem that leverages hyper personalization to bring forth additional and relevant product bundles.
In a nutshell, shifting from mere digitization to focusing efforts on front end innovation is non-negotiable for banks. Retaining and enjoying a thriving user base goes back to creating a slick user experience that ensures the generational divide doesn’t become a pipeline run dry. Seamlessly owning this end-to-end journey is all about targeting digital convenience. Holding this aspect at the core will enable traditional banks to harness the power of digital transformation and remain the orchestrator of next-gen engagement; thus preventing any blind spots from becoming a significant impediment amidst the influx of a fintech disruption.
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