Source: The Economist Intelligence Unit
For the FI’s, their investments in digital have paid off well. Most of them have seen growing volumes of interaction over digital channels. Most have a robust omni channel offering with the ability to allow their customer to acquire products or services without having to go to the branch.
External competition to accelerate the speed of change: Technology led innovations have been ongoing in the banking industry. However, with the arrival of technology players like Facebook, Amazon, Apple, and Google (FAAG) in the traditional turf of FI’s, the pace of innovation has increased rapidly. In addition to the big-tech players, FinTechs are also creating superior customer experiences for small portions of the banking value chain. From mortgages, to payments, to cards, the new age players are continuously breaching the bastions of banks.
What next for Banks: Personalization in the context of Banking is not just about the next best product offer however, using data and analytics to anticipate customer needs, which could be a product or service or advice and offering it to customers at relevant interactions with the bank creating a “nudge”. Meanwhile, doing this in real-time i.e. ‘hyper-personalization’ can expand or deepen the current customer relationships and increase trust. Today, the marketing offers from the banks are mostly mass mailer-based campaigns, offering credit cards, investment accounts etc. There is an opportunity for the banks to move away from mass marketing campaigns into hyper-personalized and targeted individualized offerings for their customers based on their interactions. This can potentially increase the acceptance rate of the offer and improve stickiness, trust, and loyalty.