While we have gone through the necessities of Digital Banking, along with the foundations of making it successful, it is also necessary to avoid some obvious errors that most first-timers end up making.

Think like a Customer, not a Business!

But how?

• Start with customer journeys. How do you plan to offer an easier and compelling experience to your customers as compared to your competitors?
• Focus on your mobile device. The first touchpoint for customers nowadays is mobile devices, and they have become a critical tool to sell, service and retain customers. One should always keep in mind that the customer will be on a small screen, with touchscreen input, and a number of distractions.
• Personalize the customer experience. This is where Data Analytics comes into the picture. Use all the available information about your customers and make offers that not only resonate with them but also demonstrate how well you understand them.
• Identify key customer pain points. Identify where their activities stall, incur errors, drop off, or are abandoned. Then drive your focus towards making incremental changes on those pain points and measure the improvements over time. The true measure of a successful digital bank relies on how much time customers spend to satisfy their actual needs.

Separate Out the Distribution from the Manufacturing

Unlike monolithic bank IT structures of the past, a digital bank cannot function efficiently with a single integrated system that requires a manufacturing change every time a new distribution feature has to be added.

In the digital banking space, the manufacturing has to be designed for the long haul, while the front-end has to be agile enough to adapt to the changing needs of the clients. Naturally, the front-end has to be flexible enough to have different features for different clients.

This presents a challenge, as the flow of data between Manufacturing and Distribution is critical to the entire process. In modern digital banks, the key is the separation of the systems through documented APIs and loosely coupled micro-services. In simple terms, it means that changes in one system do not affect the other.

For manufacturing, a key constraint is capacity. Adopting a cloud-native, cloud-agnostic back-office will help providers meet changing demands at a lower cost. Agility is the key to distribution. The digital front office should unify all customer journeys on architecture optimized for rapid iteration and improvement. And by creating a core-independent distribution, a user interface change would no longer require coding and integration changes in the core.

Do not become Responsible for Everything!

For a complex and scalable digital bank, there will be a number of features and services that may be required in order to provide the best experience to the users, and trying to build all of these features internally can overwhelm your ability to deliver. Services like identity verification, risk scoring, fraud detection, and payment services need to be integrated into the complete digital banking solution. But why not try to take advantage of the existing, already proven services that have been pre-integrated or are available off the shelf?

For example: Say your bank starts experiencing a rapid escalation of fraudulent transactions linked to a new product offer, and it needs a new fraud screening approach – ASAP. Instead of having to wait for months of design, development, test, and release cycles to integrate with your chosen FinTech solution, your bank can access this as a pre-integrated capability – ready to be called via API from the digital banking platform. This new process flow would only take days, not months.

The takeaway here is to use APIs and services that have already been created and proven. Then use your internal team to understand and adopt the external services the digital banking platform already offers.

Don’t Choose the Wrong Implementation Partner

This is perhaps the biggest mistake that a bank can make while going digital, to go ahead with an implementation partner that does not align with the strategies of your bank.

A digital banking platform is just like an iceberg, shining visibly above the surface, but the bulk of it is hidden underwater. And if you just pay attention to the obviously visible part of the iceberg, your ship can run into the big piece underneath, inviting a disaster.

To avoid trouble, a lot more attention needs to be placed on the platform that customers never see, but that supports the weight of their user experience. This underlying infrastructure is where rapidly changing product catalogs, integration to new FinTech services, and the ability to start, save and resume an onboarding transaction are managed. These less visible elements make up the difficult parts of building a new banking platform, hidden from view but critical to the operation.

This is exactly why while implementing a digital bank, we should be mindful of the fact that if we only focus on the look and feel, and don’t plan on building a scalable and flexible platform underneath, it will eventually turn out to be a Titanic mistake.

This is where Maveric Systems stands out from the rest. Since our inception, we have only focused on Banking, and in the last 21 years, we have built a competency that is as good as any other IT organization, especially when it comes to Digital Banking implementations and support.

As I have mentioned in the blog as well, we follow a customer-centric approach to our work, and we do not want to service our clients, but to become their partners in their success journey. We realize that transitions like the one into digital banking are particularly significant and irreversible ones, and we commit to promising the best solutions and the most competitive results.

This is also one of the reasons why we have partnered with Temenos, being the world’s #1 banking software. Be it Core Banking, Digital Banking, Payments, or Wealth Suite, Temenos always stays ahead of its competitors in terms of its innovations and its solutions, and we work closely with them on the implementation of all of these solutions.

The largest banks in the world choose Temenos because of the depth of their advanced technology:

• Design-led, customer experience-focused front-end ‘distribution’ capabilities adding enticing new features and differentiation
• The flexibility of a cloud-native, cloud-agnostic digital banking architecture, with associated cost and scale benefits
• An API-based microservices architecture, enabling easy integration with other services, and continuous enhancements
• Packaged model banks on a commercial platform to reduce cost, risk, and time to market.

We wish you luck on your Digital Banking journey, as it is the only space where banks would survive and compete in the future.

Keep a human-centered approach

All your questions while designing an onboarding experience must be customer-centric:

• Why is my customer applying for this banking product?
• What could be their needs?
• What could be their goals?
• How are we simplifying it for them?

The answer to these questions will have a direct impact on the content that goes on the application pages.

It is also important to consider the questions that your customers might be asking:

• How long is this going to take?
• What information/ documents will I need?
• Am I stuck? What do I do now?
• Is my sensitive information protected?

These questions help plan an onboarding experience and make them easier and effective. For example, your customers might get overwhelmed with the online experience, or could be intimidated by the length of the application process. In such a scenario, informing them about where they are in the process (“Step 1 of 4”) can help ease their anxiety. Similarly, listing the required documents, providing clear information about how the customer’s progress can be saved, or adding a note about who will have access to their documents will help increase the customers trust in the digital route of banking. Hence, to think like a customer is of paramount importance in order to onboard them.

Customer Intimacy

In a post-pandemic world, where the digital experience is going to be the primary differentiator between competitors among financial institutions, banks will need to look at offering digital experiences that connect with the consumer on an emotional level, rather than a traditional transactional app. Thus, a deeper customer intimacy and engagement has to become the new normal of digital banking.

Digital Banking should make use of emotions which have a positive impact on the minds of users, and help them emotionally connect with a brand.

An example of this could be the Google Doodle – a witty and interactive alteration of Google’s logo that changes daily and often induces positive emotions among users, or triggers interesting discussions among them.

By offering a digital banking experience that not just meets the customer’s everyday needs, but also connects with their values and aspirations, banks can elicit a more intimate engagement with the customer.

A great example of this would be Flowe, an environment-friendly challenger bank launched in Italy in 2020. Flowe attempts to help customers build a more sustainable future through a range of initiatives, including a debit card made of recycled wood. Flowe’s digital banking app similarly helps the customers to be eco-friendlier by offering personalized advice based on the CO2 impact of their transactional behaviour. By connecting with the customer’s values and aspirations in this way, banks not just develop a more meaningful and emotional relationship with their customers, but also increase their recall among customers for new products.

Another way to maintain a close relationship with customers is by always providing them with an option to connect with a banking personnel. This would ensure that a customer never feels lost in his/ her customer journey. Enabling access to real-life interactions via audio/video chat or offering easy access to human interactions in digital banking journeys whenever the customer needs it can significantly improve the overall customer experience while also building stronger emotional bonds with customers.

In the future, we might also see the widespread use of emotional AI technology to gauge the user’s emotional state. Emotional AI technology measures reactions in real time by analysing the user’s interaction with a digital device, for example, by tracking mouse cursor movement patterns. This can help banks measure the emotions triggered by digital banking. We might even one day see emotionally intelligent banking applications automatically, and in real time, adapting the user experience and digital marketing based on the individual user’s emotional state and reactions measured using emotional AI technology.

Speaking of AI, we now focus our attention on the most important aspect of being successful, deploying the latest technologies.

Top 6 Technologies for building your future digital bank

In order to survive in the digital space, the offerings from the banks have to be the best and the latest, as unlike the legacy times, there are plenty of options for the customers, and any delay results in customers switching their loyalties. Hence, it is extremely important for banks to stay on top of the latest technologies disrupting the financial industry.

Let us look at some of the top technologies to build your future digital bank

Robotic Process Automation(RPA): RPA is improving the user experience by allowing bots to handle repetitive tasks without the need for human intervention. This reduces errors and enables bank staff members to focus on more intricate queries and provide better customer service.

Data Analytics: In the present times, success is achieved by driving intelligent conversations with customers based on a data-driven understanding of them. Using insights fetched from historical customer data, banks can offer potential products and smartly upsell and cross-sell to existing customers.

Application Programming Interface (API): An API is a software intermediary that allows two applications to talk to each other, so that the services of a third software can be provided to you by the software in use for you. Through API platforms, banks nowadays are working with FinTechs to build banking stacks that give them the liberty to be a platform on which customers and third-party service providers can connect to deliver more meaningful and personalized experiences to the end-users.

Cloud Computing: Another technological advancement that has been revolutionizing the banking industry is cloud computing. By leveraging cloud-based services, banks can cut down on their data storage costs by saving on capital and operating expenditure, ensure that the business is easily scalable, while also promising that the customer data is protected. Cloud computing also forms the basis of safe online payments, digital money transfers, wallets payments, etc.

Artificial Intelligence & Machine Learning (AI & ML): Nowadays, the FinTechs are increasingly using AI and ML in a number of applications across multiple channels to make use of all the available client data to predict how customers’ needs are evolving, what services would benefit them, what fraudulent activity has the highest possibility to attack their system etc. Banks can leverage the power of AI and ML in banking, along with data science, in order to improve the current customer service as well as enhance the customer’s portfolio offerings.

Explainable AI (XAI): As we already know, AI uses machine learning for optimization. However, it is possible for AI to learn things incorrectly, leading to biases, errors, and negative results. These systems are highly complex, which means that most businesses will not even realize that this is occurring, because the underlying logic about how the results are derived is not explained anywhere.

Let’s assume that for a job role, so far 10 females have been hired, while no males could get selected yet. An AI/ML system could make the inference that females are more suited to this role as compared to males and could get biased against males while shortlisting CVs. This biasness will only increase with time, and since no one would even be aware that the system has learnt incorrectly, this problem will persist. So how do we tackle the negative side of AI?

Enter XAI: an in-depth analysis of AI systems by experts to detect any biases or self-taught errors so that the companies can trust, understand, and explain their AI results. It is vital to ensure that the AI is ethical, fair, and in compliance with relevant laws.

Other than the above points, for small and mid-sized banks, the Open Banking revolution ushered in with the enforcement of PSD2 regulations, was expected to pave the way for FinTech and bank collaborations in Europe. Open Banking is not merely just a compliance requirement. Once small and mid-sized banks start leveraging Open Banking, they can enter the same playing field as large banks and disruptive FinTech’s, offering their customers products and services beyond their portfolio. As was aptly put by the CEO of leading FinTech firm Finastra, Simon Paris, “Open banking is the concept of banks assembling a service for customers even if some of the products don’t come from their bank. There’s no doubt that power returns to the customer and those who embrace it will benefit first.”

Also, learn more about – The “DON’TS” before your bank goes Digital