Banks haven’t always been known as the early adopters of technology. In an industry that’s highly regulated and exceedingly complex, proactive innovation can be a real challenge. But these days banks around the world are answering the digital transformation call to arms. In 2018 alone, for example, banks spent billions upgrading their digital banking capabilities in the front office. The reason for this massive and ongoing investment is simple: Banks know that in the digital age they need to be able to curate the same kinds of relevant, always-on services that their customers have come to expect and are already getting from companies like Amazon and Netflix. Simply put, banks need to disrupt their own business before someone else does.
Practically speaking, the race is on. And banks aren’t just in a battle to delight existing customers while attracting new ones. They also want to work faster and more efficiently, develop new and innovative products, and tap into new revenue streams to stay ahead of their competition.
That’s why as we look at 2019 and beyond, banks will become increasingly focused on putting their customers at the center of everything they do. That includes creating better experiences for them along with much more personalized touchpoints at every stop along the way. Of course, that’s easier said than done and they’ll have to work smarter to pull it off. In doing so, they’ll need to embrace several key trends. These include:
1. Banks today are shifting away from a product-centric view of the world to be more customer-centered
Traditionally, most banks have been focused on developing products that they then try to shoehorn into any situation to meet their customers’ needs. And while that worked well enough for a long time, today’s customers aren’t looking for a one-size-fits-all solution. They want products and solutions that are tailored to their situation and that meet their unique and very specific needs. That means banks must upend their traditional thinking and put their customers and the journeys that they are on at the center of what they do. Looking ahead, expect to see a much wider range of custom products and solutions that can be modified to meet individual customers’ requirements.
2. Banks today are focused on earning and maintaining trust
At a time when massive data breaches make headlines with shocking regularity, trust is paramount. This is particularly true in the financial services industry where banks not only have access to vast amounts of highly sensitive information, but are also hungry for more so that they can create better customer experiences. As they collect more and more information through an array of digital touch points, ensuring the security of that data is critical. Not only are the stakes high thanks to regulations like GDPR, but today’s customers no longer have blind loyalty. They’ll happily switch to another bank if they have any reason to believe that you’ve broken their trust. In commercial banking, in particular, where the loss of even a single large customer can make or break your bottom line, maintaining trust couldn’t be more important.
3. Banks today are looking to work with the right partners
The reality is that digital transformation can’t happen in a vacuum. To create the best customer experiences, banks need to partner with others. That includes embracing leading fintech companies that can bring highly specialized services and solutions to their customers. That might include anything from AI-powered chatbots and online and mobile payment capabilities to innovative new ways of streamlining the commercial payments process. Meanwhile, beyond identifying the right partners within the fintech community, savvy banks are also looking at opportunities to collaborate with companies in other industries, including retail, insurance, and healthcare. One example is JPMorgan’s collaboration with On Deck Capital to provide small business with loans more efficiently. These historically nontraditional partnerships are critical for creating seamless, hyper-personalized experiences in today’s financial landscape, no matter where or how customers interact with their banks.
4. Banks are focusing on building trusted relationships with clients through targeted interactions
All of the trends above boil down to creating and maintaining a positive relationship and building loyalty with clients. Client engagement should be banks’ #1 driver of positive client experiences, but if client interactions aren’t personalized and tailored to the client’s needs, retention will suffer. Banks should look into ways to automate the more manual tasks that keep them from meeting with clients, like hunting for content, putting together presentations and collateral, and keeping up with product offerings. Banking professionals devote vast amounts of time to finding the right content, ensuring that it’s accurate and up-to-date, and then manually packaging it up for use with clients. Not only is this not a good use of their time, it also prevents them from doing higher-value work and spending time engaging with clients. Building trust by focusing on the things that matter to clients will take banks to new heights in 2019.
Banks are embracing digital transformation in 2019 and beyond
Over the course of 2019 and the years that follow, banks face an enormous challenge. They need to not only fully embrace digital transformation, but also try to become leaders within their space. And while there’s certainly no shortage of role models to follow in other industries, to get it right, they need to carefully consider what digital transformation looks like in the context of banking.
To win the digital arms race, banks need to focus on their customers, work to earn and keep their trust, and build alliances with the right partners to support their efforts. They also need to find ways to work smarter and not harder by streamlining inefficiencies so that they can devote more time to clients and address the challenges that lie ahead. There’s a lot of work to be done, but the banks that get it right stand to reap massive benefits.
This article originally appeared in Seismic.