Demand for innovative digital services is increasing in the banking world
Consumers are increasingly asking banks for innovative digital services. If the banks fail to respond to this need, they run the risk of losing customers. That is the main conclusion of a new study by Capgemini Invent, conducted in collaboration with the European Financial Management Association (EFMA).
“Indian banks have already made considerable progress in the field of digital innovations. Nevertheless, many banks in our country are also faced with the task of abandoning their outdated ways of thinking, ”says Alexander Eerdmans, Market Lead Financial Services at Capgemini Invent . "They will have to go beyond their core products to create new services and provide customers with personalized experiences."
Over the past decade, nontraditional banks have captured a significant share of the market, attracting more than 39 million customers. The report by Capgemini Invent and EFMA shows that for 81% of consumers ease of use and flexibility are reasons to switch to financial providers who do meet these needs with the help of digital innovations.
Many traditional banks are already trying to get a better grip on the changing needs of consumers. The corona crisis has also forced financial institutions to significantly accelerate their efforts in this area, as many customers today expect to be able to conduct their banking affairs fully digitally, be offered hyper-personalized services and have 24/7 customer service.
However, nearly half of bank managers (46%) say they are unsure how to embrace all of the changing consumer needs. In this new banking era, labeled “Banking 4.X” by Capgemini Invent - platformization and data, among other things, play an essential role.
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Platformization in the banking world
If traditional banks want to win, say the researchers, they will have to keep up with the open banking era . They should start using banking-as-a-service (BaaS) platforms.
In that case, banks no longer only sell their own products or services, but also offer customers products or services that have been created through partnerships with external parties that sell these products or services - often partly under the bank's brand name. their customers.
BaaS uses an online platform on which a bank grants external parties access to customer data via so-called 'application programming interfaces' (APIs). These offer banks a secure way to allow various external and internal applications and systems to communicate with each other. For example, external parties can develop tailor-made services for bank customers, which respond to changing needs.
Already 66% of the banks say they use a BaaS platform, while 25% are in the process of developing one. “This new way of banking will enable financial institutions to acquire more customers,” says Eerdmans, who indicates that banks can also retain these customers more strongly because they have more to offer them via the BaaS platform than before.
Hyperpersonalization through the power of data
A BaaS platform also offers banks the opportunity to collect a great deal of customer data. All kinds of insights can be obtained from this data. However, consumers must give their consent for this. And according to Capgemini Invent, they do so in droves: a whopping 86% of respondents say they would share their data to get a better, more personalized experience.
However, there is still a lot of work to be done in this area. For example, the survey shows that 61% of banks do not have a special customer experience team that takes care of the demand for hyperpersonalization.
“Banks can dramatically improve their customer experience by deploying a digital customer experience layer and transforming branches into centers of experience to provide a consistent and secure omnichannel experience across all touchpoints,” said John Berry, CEO of EFMA.
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