Survival of the Tech-Savvy

Written on 6 July 2016

FinBanks strive to embrace their digital side for their customers

As more and more of the world goes online, many different industries are having to create new levels so that their companies can not only survive, but thrive. With smartphones, tablets, and laptops becoming almost necessities, it is not really a surprise that face-to-face interactions have dwindled in the world of trade and profit. The digital era is now, and businesses that do not upgrade to a competitive status will almost certainly be left behind.
This issue is certainly true for the banking world. Banks, in their pursuit of success, have to discover how to go digital so that they can meet the needs of their customers, many of whom prefer the personal and non-interactive experience that smartphones make available instead of the confrontational ways of the past. The happiness of the customers must be prioritized, as without customers, there is no business- and without business, the banks will wither away.

The Nature of Banking
The climate of banking has drastically changed over the past decade, particularly in the last five years. As the millennial generation enters the workforce, the push for the “newest and latest” form of technology in all aspects of life has become quite prevalent. Having the world constantly at your fingertips makes it much more difficult to endure what can be considered as “stone-age” techniques, such as having to take time out of your day to go to a bank and wait in line to ask a question or deposit a cheque when you could just open an app instead. With that demand for complete convenience delivered in as efficient a way as possible, it is no wonder that many people would rather drop the business suits and teller windows of their old banks and move on to one that is more convenient.
Banking as a whole has always been quite traditional in a business sense. The nature of commerce is now changing to be almost- if not entirely- online, leading to many in the finance sector to try and figure out how to do the same. Many customers have grown accustomed to being able to access the world on their devices, leading to banks everywhere beginning to individually go online.

The Importance of Digital Engagement
A conference discussing this very topic took place recently in London. Entitled “The Future of Digital Banking”, the symposium focused on new methods to enhance the customer experience while bringing the industry forward into the technological age. Many of the speakers focused on the need to keep building a personal relationship with customers that go beyond simple interactions. At the conference, the speaker from the Appian bank emphasized the importance of getting to know customers personally, which was a theme during the event. The bank Fidor shared polls that they did with their customers in order to improve the quality of service. About half of the clients polled were interested in real-time and forward-looking spending analysis, and want their bank to assist them proactively in figuring out what to do with their problems. However, half also believe that their bank does not offer anything different than other banks, and around 70 percent consider their relationship with their bank to be solely transaction-based and not relationship-driven.
Fidor was not alone in this revelation. Abanka bank spoke about their decision to implement an Omni-channel strategy in order to make everything as efficient and customized as possible for their clients. They hope to obtain their goal of combating the stress of delivering both instantly and resourcefully by creating a flexible platform that establishes and emphasizes a personalized client approach.
The main result of this pressure, according to Jason Greenspan, the Head of Business and Development at Tobias & Tobias, a design and innovation consulting firm, is that ‘the digital banking ecosystem is now trying to do digitally everything that local managers used to do. The information structure has been changed to be quicker and more efficient’. This new-and-improved system that some banks have embraced so readily must be adapted by all banks if they wish to survive into the next era. Millennials, especially, like everything to be personal and easy to access, a system that is not necessarily guaranteed by the old rules of banking.

At the “Future of Digital Banking” conference, Tandem Bank also shared statistics about creating a “new world” for the millennials. According to them, 85 percent of millennials want to use their smartphone for banking, but 67 percent want help from the bank in managing their finances. At the same time, 75 percent believe that businesses are focused on their own agendas instead of them and society. That mistrust makes it even harder for banks to deliver the needs of their customers.
Another key point in the debate of going digital that was brought up during the conference is the split between innovation and strategies in banking. Though the combination of them is rare, that mixture is often the most convenient for customers. At the same time, when you focus on data and not technology, these results greatly depend on the individual bank itself. An idea that came up a lot at the conference was that both predictive analytics and empathetic analytics need to be used to understand absolutely everything about a customer- which will, in turn, help the bank. Figuring out this split could prove to be quite beneficial for the business industry.

The Customer is Always Right
With all of this in mind, the approach to banking IS, for the most part, changing in order to accommodate those who use banks. Services that previously had to be bought as a special package now come at the price of a basic membership, and the barriers between the different classes of the clientele are vanishing. “These benefits used to only be accessible to the top bankers and most invested customers,” says Jason Greenspan. “They are now accessible to everyone”. By placing everything online but keeping an actual site open, the customer gets to choose what is the most convenient for them.
That convenience is key. In banking, customers must be the main priority above all else, a point that was made over and over again at the conference. Any changes made to the banking system while going digital need to be made for the customer, not the bank. Being proactive with customers and trying to anticipate both their financial and personal needs is essential in order to make the flip to digital worth it. If its customers are satisfied, then the bank will profit; if they are not, then the bank will suffer.

There are many sides to the digital debate, but banks must find a way to embrace this technology while still prioritizing their customers if they wish to survive. Despite the climate in the banking world changing a lot over the past few years, the number one goal has always been to help clients get what they need, and that has not changed. With so much of the world now online, digital engagement is the next logical step for banks. Unwillingness on their part to commit to this new set-up can only result in the banks themselves failing, as the customers, if they do not get what they want, will simply move on to the next business that prioritizes them. All businesses need to remember to keep their customers at the heart of all of their philosophies as they move into the digital age. As Charles Darwin said, “it is not the strongest species that survives, nor the most intelligent, but the ones most adaptable to change.”

[Hero Image by Domenico Loia on Unsplash]

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