Bringing the Competitive Edge to Digital Banking

We are all members of the ever-expanding digital club – from adapting to new technology to making it a part of life. Which once was science fiction, now is reality. However, today, being digital isn’t enough. Harnessing a ‘digital competitive edge’ is of utmost importance and can unlock three crucial elements for any enterprise.

1.      How easily can consumers interact with your digital offerings?

2.      Do you offer complete digital customer journeys?

3.      Are you delivering competitive value to your consumers?    

Many businesses around us have realized the importance of these elements and are striving to bring the digital competitive edge. Quick-commerce service companies are competing to deliver daily groceries to you in minutes. Music streaming platforms are ensuring the finest quality audio experience. OTT platforms are in a race to offer a unique and vast library of content catalogues on their platforms. The urban commute is slowly being driven more by the rating system than the fare.

Furthermore, in an attempt to stay relevant, new players in the market have found their niche and given rise to the trend of ‘tech’ suffixes – FinTech, InsurTech, HealthTech, EduTech, and more.

So, what can Banks – often perceived as the
pillars of the financial ecosystem, do to stay on
top of this inevitable digital tsunami?

The answer is simple. Banks must change the way they think about digital and focus on the use of digital for a competitive edge. But many who have done this previously will say, “it isn’t so simple.”

Using solutions to digitalize processes in siloes may have worked in the past, but now, this approach is redundant. These monolithic solutions don’t talk to each other and provide inconsistent consumer experiences.

Just focusing on account opening services through a mobile app just won’t make the cut. Customers should be able to apply for loans online, or even access their data through a portal. This is basic!

Rather than adopting digital processes, banks need to reconstruct all their processes digitally. The approach should be to digital-led and not digital by the way.

Here are two examples of being digitally native:

1. Rob is a new customer looking for a new car loan. He has a medium credit rating with three existing loans with other banks. Traditionally, the decision would take way longer after deliberation with the loan officer and the bank manager. Now, a bank that aces the digital revolution has inbuilt exception handling, integrations with credit agencies, and dynamic business rules, to automate this process end-to-end. The decision of ‘Yes’ or ‘No’ comes within minutes.
2. A new bank, People First, believes in serving its customers with the best quality. It offers access to customer saving accounts via online portals and mobile. However, a customer can only access one account at a time. If s/he has a deposit account, a checking account, a home loan, and an auto loan, this customer will have to separately log in to these accounts every single time. Hence, People First decided to bring all accounts under one login to ease the process. This also made it better placed to offer personalized offerings with a higher chance of conversion.

To start, banks need to have a digital strategy:

·         100% Digital Journeys: Provide enhanced customer experience with 100% digital banking journeys, meeting modern consumer expectations for speed, convenience, and accessibility

·         Platform Approach: Utilize a comprehensive and configurable platform for Banks to automate the complete lending lifecycle across consumer, commercial, MSME, agri, and corporate verticals

·         Flexibility with Low-Code Development: Be able to quickly adapt to market changes and develop new lending products with its low-code platform, ensuring rapid deployment and customization

·         Lead with AI: Imbibing artificial intelligence and machine learning models into banking processes to automate tasks like customer KYC, fraud detection, risk profiling, and more

·         Security at Every Step: Ensure a safe banking experience by complying with various state/federal regulations and protecting their customers’ data

Understandably, banks must be cautious considering the stakes involved – customer’s emotions, money, and trust. And these customers are also cautious and their want from the banks is digital, digital, and digital.