The banking industry has reached a turning point. Financial institutions are on the path to digital adoption to meet new age customer demands. The rise of digital technology in the fintech space has created new models to attract, expand and retain long-term relationships with customers who are demanding changes and expecting excellence. To meet this demand, institutions must create exceptional differentiated user experiences to enable convenience, personalization, and flexibility.
According to the Digital Banking report, over 80% of financial institutions globally cited the use of new technologies – such as big data, analytics, IoT and blockchain – as a key priority for 2018. These innovations provide the speed and agility to help customers deliver new services to their customers – a critical piece of any customer-centric endeavor. In the banking industry, these include the ability to conduct transactions on the go, access to next-gen technologies such as remote expert consultation over video or chatbots, intelligent trading platforms with analytics, personalized attention and more.
The increased focus on innovation has created a need for partnerships across the industry. According to PWC, mainstream financial institutions are rapidly embracing the disruptive nature of FinTech and forging partnerships in efforts to sharpen operational efficiency and respond to customer demands for more innovative services. In fact, 82 percent of financial institutions expect to increase FinTech partnerships in the next three to five years.
Financial institutions like JPMorgan have been leaders in this space. In early 2016, they became the first US Bank to partner with a fintech company when they joined with OnDeck to unveil a small business lending partnership. Over the last two years, the program has offered a seamless small business lending experience to customers that the bank would likely not have reached if not for the partnership. And last fall, the company launched Finn by Chase, an app aimed at millennials that allows customers to open accounts, make deposits, issue checks and track spending – all from their phones.
Banks have also partnered with service providers to improve their customer service through easier communications access. For example, one of India’s biggest investment bank has embedded ‘in browser’ video conferencing for their VIP customer relationship management team. This helped to develop a more intimate, premium service for the bank’s most important customers, ultimately delivering higher financial returns and increased loyalty as well as unleash the potential of real time communications.
This is just the beginning
Keeping up with technology innovations is not easy. Cyber insecurity, cost pressures, regulatory mandates, as well as next-gen platform and process changes resulting from new technology, are just a few challenges. But, according to the 2017 innovation in retail banking research report, the biggest threat to financial services industry is keeping up with increasingly demanding consumers, integrating new technologies and using advanced data analytics to provide predictive recommendations.
Understanding how companies are keeping up with these shifts can be eye-opening.
For example, to Standard Chartered, the challenge of digital transformation is about much more than just technology, it is about changing the way the company works and satisfies the needs of its customers. In the constantly changing digital world, it is important for them to learn new innovations and partner with companies rather than compete, to provide new solutions and experiences. To this end, they are investing heavily in blockchain applications in trade, artificial intelligence for better scanning of paper documents or scrubbing the internet to know the customer better as well as machine learning for analysis of internal accounts to optimize liquidity management or risk assessment.
Ultimately, the challenge is not only to understand the technology-driven influencers that will shape competition and create that agility and responsiveness to address them, but also to compete with new, aggressive, non-traditional innovators. So, whether you are exploring blockchain applications in trade, AI and machine learning for customer intelligence, security measures for detecting network intrusions, or video and chatbots as efficient helpdesks, you need a strong partner who can understand your need, help you embrace new digital platforms and work together to get across the finish line.