Consumer expectations are changing quicker than many institutions can keep up. Regulatory requirements are becoming more stringent. Even as operational costs grow, low borrowing rates are pressuring profits. Meanwhile, competition is heating up too. Global banks, community banks, fintech businesses, and now Big Techs are all competing for the same customers by out-thinking and out-innovating one another. With the COVID-19 pandemic added to the equation, there’s been a perfect storm.
Consumer banks must do more than just sell their products and services to survive and grow. They must innovate and embrace digital transformation for the future, utilising technology to improve customer experience.
Here are three ways consumer banks, in our opinion, may differentiate themselves and remain relevant:
Start with the Customer and Work Backwards
Amazon, Google, and Apple have lifted the bar on customer service to the point where 49 percent of American customers told Deloitte they would be prepared to use Amazon’s mainstream consumer banking services if they were accessible.
Consumers are tired of their banks spamming them with generic financial products and costs that are neither customer-friendly nor transparent. They desire a more customized and seamless banking experience across all touchpoints. They want to know that their bank understands their needs and has their best interest in mind.
This necessitates reorganizing banks’ operations, equipment, and channels to focus on their customers rather than their goods. It entails interacting with clients on a one-to-one basis, creating value for them at every stage of their journey, and personalizing products to their specific financial requirements and aspirations.
For example, with SunTec Dynamic Offer Management, banks may instantly create hyper-personalized and contextual offers that customers consumers appreciate. These offers might be standalone or coupled with competitive pricing plans for different customers. Banks may also use the technology to enable customers to design and modify their own product bundles and offers. The result? Customers are happier and more loyal, which translates to a better customer lifetime value.
Embrace Digitalization Without Ripping Out Legacy Core Infrastructure
The digital transformation requirement has never been more vital or urgent than today. The frequent cry is, “Go digital or bust.” But, from a digital standpoint, rethinking entire business models, ways of working, and customer experiences is a tall order — especially for large global consumer banks with complex operating models and a plethora of systems, applications, and channels built up over the years. How can these institutions speed their digital journeys while remaining stable? How can they become more flexible and responsive to change?
The good news is that they don’t have to create a brand-new technological landscape from scratch. Old and modern technologies may coexist. For example, the Xelerate Digital Core platform enables consumer banks to accelerate their digital transformation without needing to replace stable core systems. The platform simply extracts customer engagement tasks from the core and manages them as a horizontal cross-enterprise overlay. This enables banks to swiftly embrace new technology, offer customized products, improve client experiences, and, transition into flexible, digital companies in a low-risk manner.
Keep Calm and Collaborate
Consumer financial requirements are continuously changing. Banks that do not keep up risk losing customers competition.
However, banks cannot afford to develop every single product or service that clients desire. What they can do is collaborate with fintech companies, digital lenders, and even non-banks that specialize in fulfilling specific client demands. That is the ambition of platform banking: to create an ecosystem of partners to offer value throughout the customer journey, eventually becoming a one-stop-shop for all consumer financial requirements. Banks can swiftly develop and extend their product and service offerings with platform banking, changing them from simply utility service providers to genuine value aggregators.
SunTec’s Ecosystem Management Capabilities enable consumer banks to easily manage and collaborate with partners. The APIs of the solution connect with both internal and partner systems without interfering with the core. In conjunction with partners, this enables banks to improve their offers, monetize partner ecosystems and provide consumers with a broader range of goods and services.
Looking Ahead
The problems that consumer banks face are numerous, but so are the opportunities. Now is the moment to rethink consumer engagement, update old technologies, and fortify alliances. Banks that fulfil these objectives will lead the way.