Technology is a critical conduit for connecting with customers, and financial institutions (FIs) recognize that adopting new solutions is necessary to deliver the experience consumers expect. They want always-open access to their banks, and beyond portability they expect interactions to be personal. How are FIs doing in the new tech department?
According to a Capgemini report, banks are lagging behind—and in fact, the financial services industry is in danger of losing up to 35% of its total market share to digital pure-plays. No longer are banks merely competing with banks. Every one of us is in the tech space, too.
Because of this, banks have introduced a range of new technologies, from upgrading ATMs with iPad-like interfaces to smartphone mortgage applications. Some FIs are diving in to digital faster than others. Most are slow to adapt because with the influx of technological tools, they’re concerned that too much change could upset operations.
What’s the answer? How can FIs stay relevant and leverage technology without overwhelming their operations, staff and even consumers? In 2019, we’re seeing a fresh approach to adopting technology—it’s focused and specific. Rather than a do-it-all mindset, FIs are honing their technological direction by choosing one area to perfect. Here are nine things to consider:
#1 Beyond the Pilot. We’ve seen many banks implement new technology pilots—from Natwest’s Cora to the National Bank of Canada’s experiments with blockchain. Banks must focus more on ROI, which requires a more strategic, thoughtful approach to technology adoption.
#2 Talent First. An uncertain political climate could potentially impact the free movement of tech skills across borders. A possible result: supply shock. FIs should focus on nurturing and developing their own talent to accomplish tech goals.
#3 A Comfortable Pace. Not every consumer wants to jump into the latest technology. While Millennials and Gen Z customers are fast-paced adopters, Baby Boomers prefer to take it slower. A challenge for banks in 2019 is to develop technology strategies at a rate that accommodates all customers.
#4 No More Gimmicks. Next-gen apps and banking robots are exciting—but what will consumers think? That’s a question FIs should seriously consider as they determine which technologies will enhance customer experience and not just produce a wow factor.
#5 Open Banking. The industry thought PSD2 would be a game-changer last year. Legislation can be a threat and an opportunity. But as we move into 2020, we can expect legislation to truly impact consumer trends.
#6 The Modern Branch. From pop-up and mobile branches in convenient locations to flagship stores in high-traffic areas, banks are transforming branches to elevate customer experience and strategically deliver technology. Branch evolution is speeding up, not slowing down.
#7 Settling into Tech. Consumers are more comfortable with technology today. In 2014, just 19% of bank customers had biometrics on their smartphones, but by 2018 that number rose to seven in 10 consumers. We can expect to see a growing amount of banking technology like biometrics.
#8 Value-Add Analytics. Globally, we create 2.5 quintillion (!!) bytes of data every single day. That’s a staggering number. Banks are challenged to put this data to work. This year, we’ll see more FIs use data intelligently across multiple platforms to improve the customer journey, provide a more personalized experience and even predict how consumers will interact next.
#9 More As-a-Service. The United Kingdom’s As-a-Service economy is well underway, with analysts expecting XaaS to grow 38% by 2020. In today’s competitive environment, banks can leverage internal teams to take advantage of this opportunity.
Technology has never moved faster—and it will never slow down. FIs should recognize that the range of new technologies gives them opportunities to connect more personally with consumers, and deliver service in a way the modern consumer demands. As you plan your 2020 strategic plan, identify technology focus areas to master so you can integrate innovation into your organizations in a meaningful, sustainable way.
The good news is, you don’t have to go it alone in your pursuit to leverage new technology. We offer end-to-end Total Implementation Services, including Branch Transformation and Digital Innovation solutions tailored to your organization’s singular needs.
This post originally appeared on Finextra.com.