The great innovators typically share the characteristic of questioning why things are done, and when the get they answer the “it’s how it has always been done” that they seek to redefine the task in question. The author raises a similar point in the article, positing that the technological advances employed in digital banking are largely to make an existing processes perform faster and more efficiently.
It could also mean that the banks are focused on their own issues — streamlining processes, reducing costs, and using data to pitch more products more accurately to consumers — creating a faster horse rather than developing something customers want, such as an automobile.
Missing among all the technical talk to AI, APIs, machine learning, big data and analytics was any sense of the customer, especially any sense of the customer as an active agent, or a larger view of the purpose of financial services in an individual’s life. My feeling, reading the report, is that banks and other financial institutions (FIs) are scrambling for better ways to push products at customers.
Mercator Advisory Group contends while there is indeed the short-term goal of many FIs to realize operational improvements, market participants form both the challenger and the traditional banking service delivery quarters are taking fundamental examinations of how individuals and small businesses could soon come to expect financial service delivery. Will it be aligned with the current trends and approaches employed by online retailers? More than likely in some cases. Will it resemble the way healthcare delivery is leveraging technology to maintain closer engagement and influence behavior to align with stated goals. We believe this likely as well.
At the core of the migration to digital banking Mercator Advisory Group recognizes the need of going concerns and start-ups to balance of near term goals of implementation adoption with the and long-term strategic objectives related to the shifting nature of how banking is carried out. Just as apt as the reference to the “faster horse” is the old example of the wagon bench manufacturer that navigated to broad shift in the transportation industry to succeed in delivering automobile springs. We anticipate movement to digital banking is part of a level set in how FIs will handle to a move to delivering financial services in the coming years on an individual by individual basis.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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