Banking 2020: Technology Disruption in Banking

By: Virender Jeet, Senior Vice President, Newgen Software

How would you like to transact with your bank in 2020?

  1. On vacation – relaxing on a beach
  2. From the convenience of your home
  3. Banking on the go

Well, I would prefer all three where time, place and medium don’t matter. Today, Banks are adapting to changing consumer behavior and are focusing on building new channels for interacting and transacting with them. The millennials in particular prefer banking anywhere, anytime and is therefore demanding innovative methods for availing banking services.

Hence, banks are trying to achieve the balance between delivering innovative, high-touch transactions and the traditional modes of services. They continue to innovate to find ways of interacting with the customer that are more direct and relevant.

Combining the physical with digital

It is possible that in future we could see banks serving fewer clients but having deeper relationships with them. They may focus only on those products that they are really good at rather than trying to provide all things to everyone. Digital touch points are proving to be a viable answer to several consumers’ basic banking needs, while in-person interactions at the branch could continue for critical and sensitive issues.

The branch can remain the central hub of activity; however it needs to blend physical presence with digital technology to create a ’phygital’ environment where consumers can design their own experience through their preferred channels. Phygital transformation has in fact already begun in banks with measures such as moving current functionalities online to making banking convenient.

The visionary banks have gone one step further to reinvent customer experience by providing newer ways to engage and provide value to customers. Banks have also started partnering with technology start-ups to accelerate innovation and create new propositions. One such example is that of “Virtual Banker”, a collaboration tool that allows video conferencing between customers in branches and remotely located bank advisors. The tool is supported by an integrated document sharing functionality as well as an integrated scanner and printer to send, receive and retrieve signed documents. Thus, by integrating digital channels into branches and vice versa, banks provide customers with a true omni-channel experience, where branches and online platforms are used interchangeably!

In another example, some leading banks have begun to incorporate the in-store digital properties and interactive product displays for localized promotion (such as loans targeted at the boat owners of a seaside community) and creating new opportunities to engage consumers. Providing tablets to bank employees enables them to demonstrate the complete suite of banking products to customers and assist in guided selling. Other avenues that banks are looking at are complimentary Wi-Fi access which enables customers for BYOD making assistance with mobile or online banking issues easier.

Banks should not ignore mobile wallets

With Mobile wallet witnessing a higher level of adoption across geographies, it is quickcly becoming aa robust customer engagement tool and an imperative to increase the customer base.The true value of mobile wallet lies in the time and the money saved as well as the convenience experienced. According to a leading tabloid, the number of transactions through mobile wallets has more than doubled to 5.3 crore this August from just 2 crore a year back.

With the introduction of payment banks, prepaid instruments will have a higher usage. A major chunk of population has already switched to using such instruments for settling radio cab service bills and other ‘app’-driven transactions such as utility bill payments and online purchase of merchandise. Moreover, with the inclusion of cash-out system along with the payment banks, their usage is only going to expand faster.

Social media and the banking industry

Social media is also dramatically impacting the banking industry and pushing banks to establish their presence on prominent social sites. They are engaging with their customers via social media, analyzing the conversations and creating another exceptional channel of experience. By being proactive and responsive, they are ensuring a better experience for their customers.

A leading survey showed that customers consider ‘in-person’ interaction with the bank as one of the most important attributes of banking. Social media is able to provide that personal connect by facilitating a two-way communication. With an improved targeting, enhanced advertising, full compliance support, more efficient ROI tracking and more – social media now has the potential to play a meaningful role in a bank’s marketing plan.

A robust social media strategy helps banks connect with their customers, give a human interaction experience, and make their communication more effective.. If executed with diligence, social media posts can add another dimension and the much-needed depth to the bank’s relationship with consumers in a marketplace where there’s intense competition and nothing like brand loyalty exists..

Robots and AI invade banking

Banks are even looking at using robots or artificial intelligence to augment human-driven processes. In the latter (AI or Robotic Process Automation), the systems automatically detect that the customer had recently checked out a specific bank offering on his mobile device and immediately alerts the thinking customer service concierge – a role that has nothing to do with telling and transactions – allowing a personalized greeting to be dispatched to the customer. Robots could therefore serve as a repository of new insights and perspectives. They could work side-by-side the humans, allowing them to serve customers more effectively. In April 2015, Bank of Tokyo-Mitsubishi UFJ took the first step toward employing non-human staff with the introduction of a customer service humanoid robot at its flagship Tokyo outlet. At a height of 58 cm, weighing 5.4 kg, the robot works at the reception area. The robot has been named Nao, and speaks Japanese, English and Chinese. It is speculated that this bank is the first amongst the world’s major financial institutions to employ a customer-facing robot.

How new technology such as IoT can meet changing needs

It has been projected that by 2020 there will be a staggering 75 billion devices digitally connected to each other- a phenomenon widely referred to as the ‘Internet of Things (IoT)’. This hyper-connectivity can help turn information into a potent force that could boost efficiency, productivity and lead to fundamental improvements in customer experiences.

Advancements using IoT platforms have already been made in the endeavor of providing a more convenient and rewarding experience for the credit and debit card customers. For instance, banks analyze the frequency of ATM usage in a certain area and target specific zones for ATM installation, where traffic is recorded the highest.

Change is a must if the banking and financial services industry aims to keep up with the advent of intelligent devices and communication technologies, thereby paving the way for its own future. Proactive banks that choose to transcend the curve of technology to improve customer experience, engage their audience and boost productivity could well be the tomorrow’s market leaders.

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