Even before the COVID 19 pandemic, mobile banking digital services had become an integral part of banking. The pandemic has reinforced this trend, which is likely to continue once the crisis has passed.
Although we are yet to enter a post COVID world, signs point towards an increasingly customised digital experience, mirrored after mobile consumer experiences with tech companies like Netflix and Amazon.
It is thought that e-commerce digital businesses that know how to adapt to their users’ unique behaviours and preferences have brought about a change in the mindset of the average consumer. They are no longer happy to wait for goods and services, instead, there is the expectation of an on-demand, on the go, all-encompassing service, where nothing other than the here and now will do.
This shift in consumer behaviour and expectation has found its way to the banking industry and is forcing banks to revamp outdated processes and explore new digital offerings. They have had to modify their approach to business, moving from a product-centric approach to a customer-centric one.
As this shift continues, banks need to support a wide variety of customers and the many ways they prefer to interact with them. For instance, banks need to ensure that the functionality of mobile apps is increasing at the same speed as the demand to use these apps. It’s all too often the case that online banking has far greater functionality compared with mobile apps. As more and more consumers turn from online banking to app-based banking products, banks have a duty to provide customers with the highest quality service in the way they desire.
Fintechs have an important role to play in supporting banks to improve their digital offering and helping them provide personalised, customer-centric service. They are, by their very nature, experts in technology and banks can benefit tremendously from a Fintech’s technological know-how and user experience knowledge to provide consumers with superior products. For traditional banks, there becomes less of a need to build a service when there is the option to consume it.
Good Fintechs focus on a particular element of banking with teams of people focused on building the best technology for that product. They will continue to invest heavily in their product making it less competitive for traditional banks to build their own offerings. Instead, partnering with FinTech can allow a traditional bank to easily improve its digital offering, providing cutting edge solutions to customers. The use of APIs provides an efficient means of integration and speed to market, and the relationships with Fintechs can be easier to foster with smaller more nimble challenger banks who can make strategic decisions quickly and help to influence the development roadmap. Challenger banks are able to invest in these partnerships, road-test them and take them to market at a very fast rate which works to their advantage.
As we move towards an increasingly digitally focussed banking world, the importance of human interaction should not be underestimated. Research shows that consumers still value human interaction, especially when dealing with a complex transaction or complicated banking issues. Consumers want to know that there is a human they can talk to who can provide expert advice and ensure a frictionless experience, and banks need to remember that a move to a completely digital model could be detrimental to the customer experience.
The banking industry is the lifeblood of economic activity. In its long history, we have seen the industry change beyond recognition. Banks need to keep their finger on the pulse of new technology, which means keeping close to Fintechs and remembering that human interaction and customer expectation remains key.