As we head into 2023, Joe Myers, our executive vice president, global banking, explores some of the key themes having impact and driving change for the banking industry.
1. Creating an Impact
What are the main drivers in the banking industry right now?
As the industry continues to navigate a path of change, I see three main drivers right now. First, it’s all about the customer. Keeping the customer at the heart of all strategic decisions is not just a ‘nice to do’ but a ‘must do.’ Influenced by experiences within the retail sector, customers are more demanding than ever; therefore, the need to keep pace with these expectations is forcing banks to revaluate when, how and where services are offered.
Second, efficiency is top of the internal radar. Increased competition, costly legacy infrastructure and complex regulatory requirements are all driving the need to improve the efficiency ratio. To achieve this, we are seeing the concept of simplicity being introduced with heightened vigor. Striping out complexity and focusing on the areas that drive customer satisfaction or generate revenue are all strategies the industry is adopting to drive a laser focus on efficiency.
Finally, the third driver we are seeing is futureproofing. We’ve seen more change in the banking industry in the last few years than we have in the last twenty years. Therefore, there has never been a more critical time to take a step back and re-evaluate what future success will look like, as well as how to get there. As a result, banks are streamlining operations, collaborating with joint ventures, outsourcing and introducing value-added services for customers to drive new revenue streams.
How are banks that are leveraging technology able to engage clients across channels?
Technology provides the backbone for integration, and integration is what enables the delivery of a more connected consumer experience across multiple channels. Whether it’s through mobile banking or at the self-service channel, the ultimate goal is to make the end-to-end experience as seamless as possible.
The industry has taken huge strides towards more connected experiences, but the gap between physical and digital still exists. This is where technology makes the difference. We’ve been supporting banks across the globe to get the right technology mix and navigate the migration path between physical and digital services. Essentially it is about creating more convenience and more value, enabling services to be presented in a way that the customer wants to consume them.
2. The Digital Dial
How does digital transformation improve customer experience, optimize operational efficiency and create new opportunities within the banking industry?
The rise of digital has touched every part of our lives and the banking industry is no different. This increase in digitization has ultimately provided the opportunity for two key factors for consumers – convenience and choice. From 24/7 mobile banking to pre-staging a cash transaction on your mobile phone, which is then fulfilled through the self-service channel, digital is creating the opportunity for consumers to bank on their terms.
As consumer behavior changes and with many routine transactions shifting to digital channels, banks have naturally been able to optimize operations, as well as re-evaluate branch networks. However, this leads to the vital question of how to maintain the balance between physical and digital channels, as well as how to leverage existing investments. We believe self-service continues to be this bridge and through open APIs, flexible software and advanced functionality, we’re shifting the ATM from a simple “cash & dash” machine to a strategic point of engagement.
What can banks do to ensure their services remain meaningful in an increasingly digital world?
At the end of the day, we all want to feel like our banks know us and can meet our financial needs. Gone are the days when branch staff would know us personally, but maintaining an emotional connection is still possible in the new era of banking. In order to achieve this, personalization and delivering fit for purpose services are incredibility important.
Banks hold a huge amount of data on individuals, and this must be harnessed in order to maintain meaningful relationships. Using this data to create customer profiles and develop multi-layered segmentation can help support this process, alongside embracing the power of technologies such as artificial intelligence.
Applying this data effectively can also ensure optimized customer journeys are in place, making sure the right services are delivered in the right way. This may require new customer journey mapping, re-evaluation of product offerings and a shift from an internal process driven mindset to a customer centric view, but it’s the essential foundation of any interaction, whether physical or digital.
3. Working Smarter
There seems to be an increasing industry openness to outsourcing. What trends, challenges and barriers are impacting this?
The industry has hit an inflection point where the balance between achieving customer satisfaction and delivering operational effectiveness is becoming challenging for some organizations. Banks need to become more nimble and more adaptive, and that requires both a modernization of solutions and systems, as well as a strategic plan to remain competitive.
Delivering solutions that allow banks to compete at the same speed as fintechs often means a shift from the status quo. As a result, we’ve seen many banks outsource services and elements of their organization to industry experts, allowing them to focus on their core business, customer retention and revenue generation.
Inertia, trust and mindsets of ‘this is how we’ve always done it’ can sometimes create barriers for such change. These initial worries are soon dispelled as banks’ operations and service offerings elevate and excel – allowing customers to be served in a quicker, easier and more profitable fashion.
How important is industry collaboration for the future?
Collaboration is a trend we will see continue to accelerate. With the rising competitive pressures and increasingly complex regulatory environment - alongside of course the more demanding consumer - partnering has given many organizations the ability to remain relevant, as well as new opportunities for growth. Whether it’s teaming up with a fintech, strategic partnering with industry experts or joining forces with other financial institutions for shared banking services, working together is the future of banking.
Self-Service is more critical today than ever before. Your consumers expect frictionless experiences that move seamlessly between channels. To meet these changing demands, we’ve developed banking solutions and services that will help your organization deliver more agile, efficient, integrated and personalized banking experiences. Learn more about our industry-leading solutions
that will help you drive efficiency, grow revenue, improve consumer experiences and manage risk.
First appeared in Global Banking and Finance Review