Grasping the opportunities of new digital customers
As customers migrate to digital alternatives throughout 2020, banks have had to react. A flexible approach is needed to ensure newly digital customers aren’t frustrated.
“One is that banks irrespective of their stature, nature, size or region, are comprehensively moving to an all-digital environment,” says Rajashekara V. Maiya, vice president and global head of business consulting at Infosys Finacle.
“Now banks are looking at digitalisation from an efficiency point of view, and that point of view is from the customers’ perspective. Whether its corporate customers, retail customers, senior citizens or younger generations, every bank is looking at how to become relevant to all.”
PwC data shows that 27% of customers in the US said they have logged onto their bank’s website or app as a result of the COVID-19 pandemic. A quarter also said they had reduced their time in the branch. Meanwhile in the UK money management apps have seen a surge in use as 30% of people turn to them to plan their futures.
Transactions that once happened in the branch for lots of customer have moved completely online. This offers a challenge and an opportunity to financial institutions. Capturing the custom of people who for the first time are switching from branch to mobile app will require a change of tactic.
Maiya uses the example of booking airline tickets in the past. Before, people would have to go to agents multiple times to book their flight, get tickets, and receive advice on prices. Now with an app experience being so easy to use and understand, very few people will go back to using a travel agency.
“If you introduce a version of the branch experience into your digital experience, very few people will want to go back to the old branch way of doing things.”
Maiya adds that While the younger generations want a social-media style experience, the elder generation is looking for simplicity, ease of understanding, and no training required to complete basic banking tasks. A customisability will be crucial to enable banks to cater to the influx of both demographics over the coming months.
Multiple forms of banking and payment have emerged across the world. QR codes in China, the proliferation of mobile money solutions in Africa, and the rise of contactless cards in Europe. With companies like Tencent trying to make a move into other regions, banks have an opportunity to take advantage of this cross-pollination.
Maiya also believes that a cross-pollination is occurring between the traditional banking sector and the wider technology sector. An example he gives is Amazon in India providing an Amazon payment and mobile money account within its shopping app. The company saw customers would be unable to visit branches due to the COVID-19 pandemic and activated payments between its app users.
This goes the other way, too. It wasn’t too long ago that Apple’s iTunes allowed customers to buy singular tracks from albums.
The idea is similar to the ability for users to use buy now, pay later services at banks to issue instant digital credit cards, with an instalment already decided. Maiya says this has changed the game. “The mobile application is now converted into the role of a traditional bank teller.”
By Rajashekara V. Maiya, vice president and global head of business consulting at Infosys Finacle
For more visit www.finacle.com