The advent of COVID and the subsequent acceleration of digital transformation has caused radical changes in customer behaviour, shifted significant portions of the economy online, and increased customers’ comfort and willingness to engage digitally. The challenge now is for banks to deliver compelling, emotive digital products and services that elevate the human experience to meet the demands of this new normal.
What Is Digital Banking?
Digital banking means digitizing every aspect of banking, from front end to back end. In other words, digital banks rely on artificial intelligence to automate back-end operations, such as administration and data processing-which, in turn, reduces the pressure placed on the employees. Besides the ability to make deposits and transfers remotely, digital banks also provide customers with customized money management services and an easier way to apply for loans.
What Can We Expect?
The growing demand for digital banking services has driven numerous technological innovations within financial institutions in recent years, with artificial intelligence (AI) playing an integral part. How else will the digital banking trends of 2021 shape the banking industry?
Leading banks are placing banking automation near the top of their agenda. Banks can benefit from branch automation programs in several ways, including improved customer satisfaction and loyalty, more responsive and efficient operations, and tighter compliance and fraud detection.
Adapting to meet heightened consumer demands for more efficient ways to self-serve digitally, there has been an increase of more customers ‘setting and forgetting’ auto payments.
In addition to being able to manage their finances all in one place, customers also seem to expect banks to manage their finances for them.
Pivotal to the advancement in the banking industry is how Real-time Payments (RTP) offer immediate availability of funds, settlement finality, instant confirmation, and integrated information flows, all in a payment made within seconds. Combining speed, data, and communication, RTP is the answer to long-standing challenges.
P2P payments are gaining traction beyond being able to instantly pay a friend or split a bill, according to a study. In addition, P2P payment solutions make spending easier to track safely and conveniently.
In every facet of their daily lives online, consumers have come to expect and crave personalized experiences, and banking is no different. Customers view companies that provide fast, easy, and personalized connectivity as caring.
Since consumers are doing their own competitive shopping online and getting their information without ever venturing into a branch or calling customer service, banks and credit unions need to ensure they are using the right technology to accommodate the new digital paradigm.
Despite several uncertainties about the future, the outline for how financial services will look post-COVID-19 is beginning to emerge. In the next six to twelve months, banks have the unique opportunity to reimagine their retail banking offerings in order to build trust and loyalty among customers through frictionless and emotive digital propositions. Rather than view digital as a cost-saving tool, banks should consider how they can offer banking value through digital. It will be a challenging journey to transform business models digitally because the challenges are many. The first step is deciding where to start, and then prioritizing the actions and journeys that will yield the best results. Since digital transformation is no longer optional, there is no reason not to start sooner rather than later.