Digital banking is a growing phenomenon and is provided by almost all financial institutions in our constantly increasing technological age. It is offering good and user-friendly experience and services for all users which facilitate their business and personal banking, Like anything else, Banks to be more successful, need to follow the digital way. Innovation-led change can help banks become digital leaders. These steps show you how to improve digital banking services.
How to improve digital banking services
1- Use Open Banking APIs
Any organization in all industries seek to provide a superior customer experience. In fact, as digital banking applications have grabbed a greater share of customer transactions, the need to provide an easy-to-use, frictionless experience, with new digital services offered across a greater number of touchpoints has never been greater.
Open APIs will enable banking organizations to gather actionable data from various internal and external sources, including buying habits, financial goals, risk tolerance, and even social interactions. Open banking presents opportunities for creating and distributing a wide variety of both financial and non-financial products and services with the banking retaining the customer relationship.
In short, open banking allows consumers and merchants to execute direct transactions without going through banks, making it more difficult for banks to have a full view of customer transactions and maintain customer relationships.
2- Commitment to Phygital Delivery
traditional financial services companies are introducing digital-only banking entities. Some banks are launching digital-only banks to collect deposits, while other financial firms are using digital platforms to provide lending, investing and speciality services.
The pressure to create an alternative delivery model is driven by the cost of maintaining branches. Obviously, the raw cost of operating a branch is high, which makes a return on assets significantly stronger for a branchless bank. While new entrants will usually pay an increased cost for funding with brokered or online deposits, existing organizations that build a digital-only sub-brand benefit from already having a low cost of deposit funding.
3- Have a Fintech partnership
The relationship between traditional banks and Fintech firms has moved from competition to collaboration. The challenge is trying to cultivate an environment where collaboration can flourish as opposed to stifling the beneficiary attributes of either partner.
The rationale for any strong collaboration is the ability to bring a synergy of strengths together that create an entity stronger than either individual unit could bring on their own. For most Fintech organizations, the primary differentiators are an innovation mindset, agility and speed to adjust, consumer-centric perspective and infrastructure built for digital. These are obvious advantages that most legacy organizations don’t possess.
Alternatively, most Fintech organizations lack the ability to scale adequately due to brand recognition and trust. They also usually lack capital, knowledge of compliance and regulations and an established distribution network. These are inherent strengths of traditional banking organizations.
4- AI Banking
For the first time, the banking industry can consolidate all internal and external data, building predictive profiles of customers and members in real-time. This enhanced use of data will enhance the consumer experience while increasing security and efficiency. By moving from a rear-view-mirror perspective of customer communication to services deployed by robot advisors and AI chatbots.
5- Make Payments Everywhere
The payments industry has been and will continue to be, one of the most dynamic areas of innovation in the banking industry. Impacted by changing consumer expectations and driven by technological advances, innovation will continue to come from traditional financial institutions, Fintech firms, and big tech players.
As the infrastructure of payments continues to evolve, innovation will move the payments industry from a series of specific products to part of everything consumers do. Differentiation will be driven by data, technology and delivery, changing the dynamics of how and where we pay and receive payments. Payment innovation trends will occur in conjunction with the Internet of Things (IoT), the point of sale (POS), mobile wallets, cryptocurrencies, and the blockchain.