In the light of innovations like Fintech and Blockchain, Traditional Consumer banking services face high competitiveness. This has made it highly difficult for Retail banks to satisfy and retain customers. This article will educate you about the challenges and the innovations the Banking Industry will bring, in the year 2020 and beyond.
Let us take a look at the factors that will shape the future of retail and consumer banking.
Banking is a customer-oriented service industry and hence; Customer Service should be the most important aspect of any banking activity in the face of immense competition.
What are the Determinants of Customer Service
Having worked in call centres and BPOs where high levels of Customer Service where a mandate, I have a fair understanding of the Standards of Customer Satisfaction expected. Delivering a great “customer experience” is the best way to make your bank stand out. With everyone offering nearly the same products and services, it leaves you without much room to compete on price.
To assure customer satisfaction; is easier said than done. You need to hear out your customer’s issues and respond to them in time. Even though AI and Bots may be considered as advanced technology, customers appreciate speaking to a real person, much more than a chatbot. You need to represent your brand and hence, should look at the bigger picture and remember the “Customer First” approach. This means proactively coordinating with other departments and ensuring the “final resolution” of the customer’s issue. Taking “ownership” of the problem helps in building a “Customer Relationship” and “Brand Loyality”. All these services are just some of the consumer banking concepts that should be emphasized.
Banks will need to provide “Easier Resolutions” to the new age customer. The hasty lifestyle and other services demand Millennials to be multitasking and hence they are impatient and don’t have the novelty of time. The banks need to be quick and flexible to please them. This will see the rise of more smart banks who have decided to finally break-free of their stubborn framework and experiment with FinTech Solutions.
The Relationship with banks is based on “Trust”. Customers will expect 100% security of their assets and will not tolerate any inadequacies. To be more competitive, banking establishments will join hands with other financial services providers, software companies, online marketplaces etc. Customers expect the bank to make the right associations and take correct decisions when needed.
What Technologies will help the Future of the Consumer Banking Services
Banking and Financial service providers are already using to online transactions and payments. Information Security on Mobile phones and the internet will give them an extra edge. Security of Customer Data will be of Prime importance and Banking software companies will need to make sure that their technology (Apps and other payment gateways) will ensure security.
The enormous data collected by the technology, also gives businesses access to critical information that can be used to analyse and study the customer’s needs. These are really personal data about consumer behaviour. While this is an incredible opportunity for organizations to access the insights inside and give customers what they really want. This data too, is vital and hence it is necessary to be guarded against any fraud.
With the introduction of new innovations in banking and financial services such as FinTech, payments, retail banking, insurance and wealth management; soon Traditional banking will merge and find its way to adapt with the modern banking culture giving rise to the emergence of NeoBanks. It will need to stringently follow revolutionary digital identity verification technologies that keep customers and banks secure.
Application of Technology
Future customers will enjoy the advantages of innovations like mobile banking, allowing them to do their wealth management without having to visit a real bank. Banking and Financial services will invest in new and exciting ways for people to bank digitally. Banking software Companies looking to invest in new technologies, will grow and influence customized banking services.Other customized digital banking services that are enabled with Chatbots and WhatApp can respond to more complicated questions and submit push notifications to remind you to pay bills etc.
Interactive IoT devices such as wearables etc. will not be a trend or fad. It can be very useful in providing banking and financial service.IoT offers a range of opportunities in the form of customer management, business process automation, new forms of payment and much more. Without a doubt, IoT can drive the financial industry to the next level.
But, If you doubt that all these innovations are the end of retail banking, it may not necessarily be. Banks should make use of every contact points they have and attend to customer’s expectations by making banking as easy and convenient as possible even over the phone. We’ll then continue to see more people craving that personal experience that comes with visiting a bank in person. In order to retain customers, banks will need to provide quality service to ensure Customer satisfaction.
This will be a great opportunity for Incumbents banks. The changing banking ecosystem has brought in new unexplored opportunities for banks. It is encouraging banks to move beyond traditional products to meet changing customer needs. Banks are looking to collaborate with their FinTechs and RegTechs counterparts. Incumbents are exploring point of sale financing and unsecured consumer lending, and also enhancing their digital channels expertise to reach a broader customer base. Banks are also embracing the open banking API-led economy and collaborating with third-parties to create an open-shared marketplace.
Exploiting the business opportunities, one gets from the Gen Z generation is one you should not miss. They are Authentic and experiential. Personalized content and conversations are central to purposeful engagement with them. Gen Z is the digital age of communication and has no knowledge of anything before the Internet or the mobile phone. There are certain obvious factors with which the banks need to operate. Unlike Millennials, Gen Z lack predigital world experience. The consumer behaviour towards banking services has changed.
Banks need to understand in their typical approaches that Gen Z makes no distinction between the online and the offline environments.Mobile banking seems to be the obvious medium for engaging with Gen Z since using a laptop to access things is less popular for them. This will hasten the decline of “traditional” online banking. Gen Z users don’t choose a bank , but they choose a banking service App that they ike. And like other apps, they’re likely to ditch that App when it loses relevance or functionality.
Though it may seem like Gen Z will have little connection to commercial banking, they can be engaged on financial affairs by traditional banks if they address this generation’s real interest in money.As a group, Gen Z shows healthy signs of wanting to take greater control over their financial affairs, so some aspects of traditional banking can still appeal to them.
New fintech firms are proving that traditional payment rails can be combined with web dashboards, business software and new technology, like blockchain, to put the power of payments back into the hands of the users themselves, saving time and money while increasing security.
From making everything move smoother and faster to the evolving and changing role of banks; Experts don’t necessarily agree on what’s coming next. The Blockchain technology for instance is an innovation that is revolutionary, however, customers are yet to understand it and use it to it’s full potential.
Quicker payments to better customer experiences, the banking industry is continuing to evolve. There has been a rush of cryptocurrencies powered by Blockchain, along with the AI automation that has disrupted the banking and financial space. It is now but obvious that the customer banking service definition has changed.
There is however a large consensus, that customers will be the ultimate beneficiaries as there will be healthy competition that will result in better innovations.