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May 03, 2019

How the Digital Age is Transforming Banking



In the age of one-click buying and instant gratification, consumers are expecting that sort of service in all aspects of their life, including banking. To survive, banks need to adapt to new technology to meet their consumer’s changing expectations.



Hybrid Banking

Have you ever tried to call a customer service number and became frustrated with the automated robotic responses when you were trying desperately to get a hold of a real person?

There is still a desire for in-person customer service for complex problems and products. Banking consumers want instantaneous self-service for tasks such as depositing checks, withdrawing, and money transfers. But old school tactics remain superior in most people’s eyes for complex tasks such as investments and mortgages.

With a new tech-savvy generation, it is important to move more and more towards digitizing the banking process. It can be extremely overwhelming to convert everything at once, so experts suggest researching customers’ histories and starting with the most impactful part. You can break down different parts of the customer experience into prospecting, onboarding, advice and sales, administration, and transactions.

Switching to Automated Services

The transition into the digital age is not only beneficial for bank patrons, but for bank franchisees as well. Many banks find that switching to digital, modern equipment delivers a substantial return on investment.

For example, banks are switching over from dot matrix printers and preprinted check stock over to MICR laser printers that digitize a check image to print checks on the spot. This reduces the cost of printing checks for the bank and is more convenient for customers. Source Technologies, a manufacturer of MICR laser printers, found that with manual checks, tellers were waiving the fees more often than not, losing banks money.

Utilizing Data Analytics

Data analytics can be utilized by banks in a variety of ways, such as:

  • Data mining: This targets clients’ needs and prioritizes offering products and services relevant to them instead of wasting time trying to sell clients on irrelevant services.
  • Advanced analytics: This data identifies customers who are underpaying and adjusts their prices.
  • Behavior analytics: This data finds customers who are at flight risk so you can create a unique, personalized plan to keep their loyalty.

Digital Literacy in Leadership

Having the ability to anticipate changes in the market, solve problems, and the ability to change and take risks are assets of an effective leader.

With the rapidly increasing emphasis on technology digital literacy comes a new skill set that is important to have. Understanding how to utilize technology in marketing and analytics is becoming a requirement for success.

There are multiple ways for banks to promote knowledge of technology to their employees. Some examples are:

  • Require mandatory attendance for technology conferences.
  • Engage with fellow companies that are flourishing in technology-driven strategies.
  • Form events and meetings focusing on digital opportunities and threats.
  • Hire new leaders who have a background in technology.

Cybersecurity

The idea of bank theft has recently shifted from men in ski masks holding up a bank to someone sitting on their computer confiscating banking information. Banks now have to worry about data breaches and investing more and more money into keeping consumer’s financial information safe.

Phishing scams and unsafe, easy to guess passwords also put consumers at risk. Banks must learn to adapt to these new threats.

Conclusion

Making the digital transformation is beyond supplying a mobile app and paperless banking. It involves combining the in-person customer service experience with the speed and convenience that technology can provide. With technology rapidly evolving it is not a transformation that will happen overnight, but over time, it is a change necessary to thrive in the evolving market.



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