The banking core is undergoing a transformation to be able to connect with the customer at any time and at any place: with the cloud, Business to Business (B2B) connections, Business to Consumer (B2C), Bring Your Own Device (BYOD), Big Data and IoT sensors. All these ways of communication must coexist and the challenge for banking is to improve them every day to meet current expectations.
Customers today are omni-channel and in addition to communicating with the company through different channels (and devices) they can start the contact with the brand on one channel and end it on another. This is why it is essential for all sectors, in this case the financial industry, to be able to be present on all possible channels and also to offer their services on them in the best possible way: simpler, more accessible, more useful, more innovative and leading-edge.
To be successful, they must excel in cooperation and coexistence of all ways of communication, such as services in the cloud, Business to Business (B2B), Business to Consumer (B2C), Bring Your Own Device (BYOD), Big Data and IoT sensors, since the latest studies on digital transformation agree that handling that omni-channel approach will be the key in the coming years. This is why banking should be aware of the challenges it entails.
The main strategies mentioned by the different recent studies related to digital transformation include:
1. Creating a specific plan with priorities. According to the report by IDC on the evolution of IT in banking published last May, the experts consider that banking will need to identify the areas that require a special effort and establish measures to achieve that new experience. In other words, they will need a very clear roadmap so as not to be left behind and continue to adapt to social and technological circumstances at all times.
2. Constant innovation. The essential features of this new banking model also include an ongoing orientation toward innovation, providing services on different platforms and omni-dimensional marketing, as well as other services that consolidate customer loyalty and business performance.
3. Promoting interaction. The creation of interactive experiences among companies, customers, partners and digital employees will also help boost services more and more to adapt them to individual demands and needs. In the age of virtual reality, social media and over-communication, banking must also take part in that race.
4. The quest for customization. “The greatest challenge facing banks is offering a customized omni-channel experience that attracts and satisfies customers. Banks that drive this experience on all channels are on the right track to succeed”, says Marc de Castro, Research Director of IDC Financial Insights. The truth is that something that has not changed in the relationship with customers is the customized service they seek and require. It is important for customers to feel that this customized service is provided on all communication channels. Indeed, with new technologies it can be even more customized and banking should be committed to this.
5. Infrastructure upgrading. The Financial Services Technology 2020 and Beyond report published in 2016 by PwC analyzes the financial trends for the coming years. They all need swift data assimilation and transmission. To remain competitive in terms of costs and have the flexibility that innovation requires, financial institutions will have to be more agile and sensitive, and for most of them this will require a significant realignment, a transformation process.
Gartner also stresses this point when it mentions that the tension of demand will shift to providers with intense pressure to increase efficiency and cut costs in the sector, while next-generation digital services will also have to be offered.
In fact, according to Gartner, traditional application providers have been slow in responding to the new needs, and the consultancy firm predicts that one fourth of the institutions will have commissioned their provider to replace their old mobile banking infrastructures by the end of 2019.
It will therefore be essential for all financial institutions:
- To work with the cloud. Cloud computing is becoming a relevant tool by making everything easier to handle and also by facilitating Big Data analysis. Internally, this also enables technology teams to develop and test solutions in the cloud without having to rewrite the test code. Ultimately, it enables companies to organize and provide their products more quickly.
- To develop an API catalog. Just as BBVA has done, developing a catalog of open financial APIs is a means of facilitating the use of their services by the customer. Application programming interfaces (APIs) have come of age in financial services, and just like online or mobile banking today, nearly all financial institutions will provide external APIs in the future.
- To make renewed use of data. In addition to using their data in their API catalog, for example, the study by PwC suggests that the new business models will probably influence the use of data by banks and other companies, and this will also have technical implications.
Being committed to an omni-channel transformation process will no doubt be very positive for any banking institution. It will help them increase the loyalty of their customers by achieving a more efficient management of operations, through a better organized work team, and by keeping up to date with all the technological innovations, which are also essential in the battle to become leaders.