The banking industry is undergoing a sea-change. The gradual shift towards digital and especially mobile technologies, alongside changing customer demographics- particularly the heightened importance of millennials- offer significant opportunities for innovators.
Advancements in the device ecosystem, along with the rise of the internet have clearly implied that everything- from TVs to cars to wristwatches- have the potential to become banking tools. The expanding arena of technologies has increased customer expectations and demands. The movements in the digital world and the various mobile devices became seemingly ubiquitous and are rapidly being seen less as a part of technology but more as an indispensable part of modern life. Studies suggest that an average smartphone user checks it 150 times a day.
To further illustrate, mobile banking is being embraced much more whole-heartedly than any other service; all that is demanded is complete transparency, control ease and above all data security.
These changes are sufficient to imply that banking has a digital future. Retail banking services are used by almost 1 billion people. The landscape of banking completely changed with the introduction of mobile banking for retail customers and a similar kind of innovation is awaited for corporate customers.
Technologies have undoubtedly contributed to changing the face of banking but several issues remain. Today, consumers have innumerable banking options and are free to switch banks anytime. Factors such as a lack of security can lead to significant customer churn. There are a number of customer expectations from banks and some facts based on studies suggest that:
- Any lucrative offer from another bank can make 1 in every 3 customer switch their existing banker.
- 54 per cent customers want their bank to offer discount of transactional fees
- 53 per cent customers demand proactive bill payment services.
- 52 per cent customers desire proactive product recommendations
- 79 per cent customers limit their banking relationship to just being transactional.
A major percentage of consumers (86 per cent) trust their bank to securely manage sensitive data. Thus, security becomes a priority for every bank. Therefore, the more a bank invests in technology, the higher the chances of it fostering its customer relationships, managing churn and increasing loyalty and customer acquisition.
So, what should the banks do to become more relevant?
In a nutshell, high transactional fees and poor loyalty programs are coined as the top reasons why a customer is dissatisfied. Consumers today require convenient banking services, which can be supported by the latest technologies.