"We want to go digital; move away from traditional banking to digital and transform our business,” said a senior banker. But in all conversations, he overlooked one component: the customer. My response is simple, ditching the digital for a better customer experience is a priority before considering a transition.
Banks around the world are moving towards digital. According to BCG, this increased online banking by 21% and mobile banking by 30% over 2021. This shows that today’s generation or the banking customer wants convenient, fast and accessible banking services.
Unfortunately, banks tend to overlook what can only be done successfully if the customer experience is satisfied. The platform is tailored for customers to satisfy their needs, not the bank alone. The business strategy is built around customer behavior. It consists of needs and wants. In order to successfully achieve a smooth transition, banks need to assess their digital, leadership, and operational capabilities.
It is an eye-opener for most banks which sometimes it’s too late to realize. Some traditional bank faces issues where the money to spend on building technology, but they lack leadership capabilities. While others might be strong in leadership capabilities but lacks digital capabilities. So, banks need to be truthful in knowing where they stand.
Once identified, the most important factor is working on their operational capabilities. As this is inside out where the processes and legacy systems need to be developed. Sometimes it becomes a major roadblock to going digital. So, all three, i.e., Digital, Leadership, and Operational capabilities, need to perform together.
“Banks need to move away from just offering products and services to customer-centricity”
Banks should realize a few things while building a digital platform for their customers. Digital is not only about bringing the technology and assuming the tech will do most of the work. This is the common mistake most organization makes, i.e., Putting the solution before the problem. One of the common misconceptions is treating digital transformation as a tech issue. First, improving our underlying processes is very rigid in its approach. It then becomes easier to attract new customers and keep engagement with existing ones.
This can be done by having a front-to-back approach that focuses on three things firstly front end focuses on customer relationship, customer insight, and channel, while the second part back end, focuses on product and services, user insight, and developing better user experience based on their need, the third part is simply connecting both, i.e., front-to-back.
Once the approach of front-to-back is considered, the customer journey takes the preceding. The customer journey begins when a customer perceives the need involving decision-making. So, we need to think about how to get involved with customers in their decision-making process through a chain reaction. This involves the bank’s process and operating model, including some invisible functions such as Risk and Compliance, technology, change management, and agile delivery.
Banks needs to move away from just offering product and services to customer-centricity. This can be done not only from the technology or strategy point of view but making changes internally. Banks who wants to bring these changes needs to motivate their people to go above and beyond their duty and basic requirement of the customer.
Banks who want to win the digital race need to ditch the digital and focus on the customer first.
