Will traditional banks switch to mobile-only banking?
In light of the Covid-19, we have seen global economies getting hamstrung with budgets being pushed back significantly. The banking sector is under a tremendous amount of strain to keep their businesses running smoothly. A significant amount of volatility has been created in capital markets around the world. Traditional banking systems were primarily engaged by the baby boomers. However, it has been lacking lately due to trepidation in engaging with in-person / physical banking processes.
So where do traditional banks go from here in this new normal?
Let us first understand, what risks do traditional banks face if they stay dated? The last 8 – 10 years saw the introduction of Fintech startups and solutions as new entrants following the economic crisis of 2008. This was further amplified with the massive penetration of affordable internet-enabled smartphones into the market which completely changed consumer behavior. Online banking, mobile apps, and wallets became widely accepted by businesses and people (especially millennials) as a primary means of transaction.
What should traditional banks change?
Adopt a new strategy and leverage digital channels
Traditional banks with their brick-and-mortar approach are still vied by the older generation. This can be attributed to the fact that not all people are inherently tech-savvy. However, consumer preference tells us a different story. Mobile banking reigns as the primary means of transaction with the larger populace being on the Gen X, Millennials and Gen Z. Mobile banking is also more convenient, secure, works 24×7, and eliminates the need to visit a branch for transactions and enquiries. In fact, this is a critical factor that helped Fintech companies thrive onto the new generation cohort. They clearly prefer engaging with a digital platform on a handheld device over traditional banking, as they have started their lives with mobile devices – including their first toddler game. This does not spell doom for traditional banks. Many banks have revamped some legacy systems and adopted digital means on mobile. These banks have been trying to address consumer demands by:
- Personalizing transactions and engagement
- Personalizing products (banks are doing away with a one-size-fits-all approach)
- Promoting an online banking culture as opposed to in-person engagement
Even if mobile banking becomes the norm everywhere, banks must be ready with the required technology as well as be prepared to address the following points.
- User Experience: The success of any banking mobile app depends heavily on a sound user experience. Pre-cursors for a great user experience include – an impactful design thinking, a good and easy-to-navigate user interface, an aesthetic layout with visual elements that nurtures an emotional connect with consumers, and great responsiveness on part of the application itself.
- Frictionless Customer Journey: Today’s tech savvy consumer base yearns for convenience, speed, and automation. Higher wait time, pop-ups, excessive forms, and latency in query resolution can impact engagement and deter consumers. Banks need to address these pain points at every stage of the customer journey to retain customers as well as attract new customers.
- AI-driven Customer Experience: Improved personalization, the introduction of chatbots and virtual assistants have made customer query resolution and escalations a lot more seamless. Round-the-clock support coupled with promoting relevant products fuels a sense of desire for customers to opt in.
- Realtime engagement and marketing: Bank’s systems should practice usage of contextually-relevant messaging to forge connections with consumers, react to their immediate intentions rather than attempting to predict them and give them a best possible offer to make a sale.
- Analytics for a Superior Experience and Continuous Improvement: Measuring the app’s performance is important to learn how customers engage with it. This will encourage banks to market more effectively to their target audience.
According to a report released by Business Insider, mobile banking is estimated to grow at a CAGR of 2.83% between 2019 to 2024. Digital banks in some capacity are preferred by consumers as far as the enormous multitude of services on offer goes. Security with online banking is debatable but mobile banking is touted to be very secure with two-step verification and other options fail to prevent unauthorized access. Personalization is a huge advantage with digital banking services. While cold calling and random sales-related calls are often unwelcoming with consumers, personalized engagement boosts potential conversions as well as improves a consumer’s relationship with the bank.
In this competitive market, most banks have developed a mobile app/s to help customers perform banking transactions with a single click. The current Covid-19 situation has intensified the need to adopt digital banking services, applications, and cloud infrastructure. Today, adopting these tenets is pivotal for finance businesses to scale up their demand while providing personalized digital experiences to their customers at the same time.
Temenos infinity comes to the rescue!
Temenos Infinity drives awe inspiring customer experience journeys right from the stages of customer acquisition, servicing, and retention. The new age omni channel platform offers breathtaking propositions as mentioned below
- With open APIs and extensible architecture, Temenos delivers customer experience solutions that lets banks expand products as per their vision. You will not be locked into a closed-end solution or tied to a single back-office silo again.
- Temenos Infinity analytics use customer behavior to improve customer outcomes, drive upsell, and improve profitability.
- Temenos Infinity gives your bank the agility to create dynamic products, support instant decisions, and increase speed to market.
- Temenos Infinity helps you personalize the banking experience to match your customer’s financial future and at the same time engage your customers and drive more cross selling.
As a certified Temenos partner, Maveric systems re-energizes your connected core by extracting maximum value through full lifecycle implementation of Temenos Infinity. Our close alignment with Temenos as a certified partner, help banking customers to get rapid and easy access of Temenos Infinity’s application features. With our certified Temenos specialists, we orchestrate and articulate unmatched Temenos product stack mastery to lay the success path for your future.
With a dwindling aging population and young consumers on the rise, the traditional banks may not do away totally with their branches but there will be a significant reduction of branches and mobile-only banking will gain tremendous impetus for a foreseeable future with many banks looking to adopt a mobile-only future. The past few years have seen the gap in capability between a digital platform and a mobile platform reduce drastically. Mobile apps are now on par to provide the same or better services than a digital platform may have previously – the two are almost synonymous. Most consumers would welcome mobile banking. However, for the small minority of technophobic people, call centers and bank branches may remain relevant.