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It’s about building a frictionless customer centric experience that goes above and beyond what is there today. At a recent financial services summit, I asked several senior banking executives how they defined digital banking. And the responses were varied, although they all had a common theme: customer centricity.
Some talked about embarking on a different customer journey. Some said it’s about really starting to think customer not channel, others mentioned complementing existing channels. And the one that struck me as being most spot on was “incremental innovation”. Because I think that’s currently what we, as customers, are receiving from the big banks. It’s not a radical shift, it’s a slow burn. Understandably, because, as one senior executive put it, “Big banks are like sleeping giants.” Read, slow, unresponsive and lacking agility. Therefore, incremental change is the reality.
Change is afoot in the banking world. But, according to Hilda Jenkins, Digital Experience and Engagement Director at Barclays UK, , it’s five years behind retail. Having worked in retail, she saw the transformation take hold at UK supermarket giant Tesco five years ago. And she puts some of it down to demand. After all, all services respond to the expectations of their customers. And according to Jenkins, “It’s only when customers are comfortable with mobility that they’ll demand the same from their banking.” It was only this year at Barclays that they saw the number of customers on mobile supersede the number of customers using the retail online banking site.
That ‘getting comfortable’ piece has one hold-up when it comes to banking – the big element of security. While customers may be ready to use their mobile phones for purchases (in the UK) of £30 or less, there’s a big mindset shift between accessing all things financial via their phones. Of course, once you make the leap of faith there is no going back. But until you’re convinced, the thought of cybercrime and bank accounts being more easily hacked is an easy dissuader.
Defining digital banking may not be straightforward. But ultimately most big banks are aiming for the same overall goals: building a frictionless customer centric experience that goes above and beyond what is there today. This is how Ana Perales, Strategic Transformation Director at Barclays put it, “Our digital offering to our customers is amongst one of the best, but there is still a long way to go. Change happens too fast to be able to be ahead of the game ever. So there is still a lot to do.”
The new order of banking will mean less loyalty. And banks need to prepare for that. It used to be that we were more likely to get divorced than change banks. But digital banking will change that. Customer habits are changing. In the same way that consumers look around for the best deal online and purchase from the lowest priced competitor, so too will they start using different banks for different services. As Roberto Mancone, Global Head, Disruptive Technologies and Solutions at Deutsche Bank told me, “It won’t be about products anymore, but services.” And that’s a commonly held view these days. So, does that mean we’re heading towards banks becoming commodities? And would that be such a bad thing? Fintechs would say not…
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