However, due to lack of focused and longterm approach, creation of disjoined systems, rapidly changing business and operating scenarios, etc., the intended goals might not have been fully realized. Some of these « failed » initiatives has been driven by the institution’s urge to be an early adaptor of a technology or trend (betting on a wrong horse). On the contrary, we may lose a massive opportunity, if we don’t recognize and bet on a profitable horse. So, the key is betting on the right horse, at a right time – i.e., when the odds are low. Typically, industries use what is called a Hype Cycle to judge a fresh technology or trend. If you are interested to know what is really a « hype cycle », please see Gartner’s methodology. I will attempt to string together some of the key facets of Digital Banking, as unlike a lot of the buzzwords, it is neither an individual service nor a technology.
Just around the time (2008-10) I spent about a year plus in Brussels, three big banks (Fortis, Dexia and KBC) which always found as extremely risk averse bankers from the BeNeLux region, started facing major pressure and their value eroded significantly and triggered heated debates in the community – who thought their money is definitely safe with the banks (either as a depositor or share holder). What really happened there, is quite complex. Key factors being, huge sovereign debt hovering between 84 to 99% of GDP, lack of Government for 533 days, etc. These triggered liquidity issues. If you add to the other upheavals in the banking industry globally, it is simple to realize that the « trust » within the system was under threat. How would we build trust? By being transparent. Customers need (not want!) transparency in the entire system. Younger the consumer base, that require felt is more acute. This, whenever you look from the changing customer experience and expectations from retail industry (Amazon, Flipkart), transportation (Uber, Ola), food industry (Zomato, FoodPanda, ZaptheQ), you understand where in actuality the banking industry is. Customers have reset the expectations with regards to value, experience, and options.
Lots of people I have interacted with recently on this topic, opined Internet Banking or Mobile Banking as Digital. Yes, that is only the beginning of what could possibly be Digital Banking. Probably, they cover earlier pair of customer expectations. Moving forward, could we see a day soon, where there is no paper in some of the banking transactions? When I say paper, I am not merely discussing currency! Few things which already are in practice in few banks and gaining momentum across are – digitizing processes within the financial institution (like customer on-boarding, loan application), cheque truncation systems which enables you to take a photo of the cheque on your own mobile and send to your bank, etc. – there by bringing efficiency in decisionmaking, power to customize processes to specific customer requirements, save some unnecessary trips to the branch, etc. This could mean quite simply, implementing document/ image management systems, business process management and monitoring systems, integrating these components within the prevailing IT solutions. European bank account
Social Media in the last couple of years have brought biggest impact across borders – be it, Tahrir Square revolution, Ice Bucket Challenge, which mobile to buy, exactly how we order and buy lunch or identifying an excellent dining place and going Dutch while sharing the bill. Social Media is already bring disruptions when it comes to which bank to trust, what they could expect from a bank with regards to services, lend a voice with their dissatisfaction. Which means, banks have to be on the same Social Media listening to their customers, selling their services and also ultimately, attracting clients, retaining the customers and more importantly, becoming « The Goto Bank » if the customer has multiple accounts. As an example, what could not have been expected several years back, in Kenya, among our prestigious client’s Twitter handle (@ChaseBankKenya) uses Twitter to get in touch, launch and share CSR activities, and address customers’queries and concerns very effectively.
Besides these key components, there are many others which could make the bank more « digital » – chat and video discussion facilities to create bank closer to the customer when he or she needs it, or educating customers through online tutorials like financial literacy, tax planning, etc., integrating various solutions and systems in the financial institution to reduce data replication and redundancy and helping the lender make more Straight Through Processing systems there by reducing errors, cost of operations, and increasing efficiency in the whole system. Banks could significantly increase seamless data exchange with others partners like regulatory bodies, clients, government bodies thus making entire process a whole lot more transparent and efficient.