As we all know this is the era of science and technology, our young generation enter into a new digital world that speeds up the process of the traditional banking industry to branchless banking. Digital banking can be defined as moving online all traditional banking activities using technology and innovation that will allow customers to join a bank and handle their banking activities without physically ever entering a bank.
Customers have quickly shifted to online and mobile devices and banks have had to invest in their digital transformation as customer requirements now include paying bills, mobile payments and loan applications online.
With this said, banks must continue to stay abreast of digital banking trends that are all necessary to improve their customers’ digital experience.
Let’s see the digital banking trends for the year 2021:
Many banks started testing bots to automate customer service and make it available 24/7 on customer-preferred channels such as Facebook Messenger or WhatsApp. This will be beneficial both for the bank and for its end customers. Customers do not want to search through FAQs, or wait for the primary customer service representative. In the past bots in the banking system were a low-cost alternative to human-based customer service that help customers to locate the nearest branch or ATM, get information on exchange rates and banking products or monitor their latest transactions.
SMALL AND MEDIUM ENTERPRISES:
Banks also have to consider the small and medium enterprise (SME) segment. In the past, business customers have been divided into product based customisation according to the needs of customers and due to complexity of each business.
However, banks have come to know the potential of such a market. They are slowly moving to standardised value-added services offerings. Banks can increase their revenues by increasing their traditional customers and retaining them. Banks have started offering their business customers products and services like business financial management (BFM) solutions, as well as digital transformation like ecommerce set up or digital marketing campaign management.
Digitalise the workforce:
Banks should invest in intelligent tools to digitise its workforce. Artificial intelligence (AI) is the key technology behind the evolution of working processes, and the challenge of integrating human work with AI applications is a paramount concern for the industry. The good news, however, is that structured applications and pilots are starting to produce interesting results, both in terms of savings in eliminating repetitive tasks and in sharpening the focus on customer service.
Select a niche:
Banks have to select a niche and identify and approach niche customers with a dedicated value proposition. In the last few years the most forward-looking customers have joined the banks that use innovative technologies to shape niche-specific products and services. These banks are developing new customer touchpoints and relationship models in a cost-effective way, something that was always difficult to do in a physical-first distribution model.
Many banks have initiatives aimed at targeting demographic-based clusters such as young people, Millennials or older people, but some banks are now targeting customers based on lifestyles, values, aspirations, mindsets and underserved needs.
Use of APIs for the transformation to an open banking platform:
Application programming interface (API) is the most important topic in the banking industry today, and many people believe it will become even more important with the introduction of the Payment service directive. API’s change the way banks open their boundaries to deal with changes in technology and demand
Building partnership between banking and fintech:
Fintech companies provide the technology that enables financial institutions to automatically process their financial services, using specialised software and algorithms that are used on computers and smartphones. People want to conduct transactions via mobile, and these activities include managing their financial needs for example applying for a loan, or optimising their investment strategies. Fintech companies provide both individuals and businesses the digital tools which give innovative ideas and software solutions.
Advanced technologies money and personal finance management (PFM) tools:
Customer-focused banks are changing their way of banking. They are now concentrating on the next phase in the evolution of personal finance. The potential benefits of the strategy include enhancing customer engagement and retention through ongoing “non-sales-only” interactions with the brand, and opening new fee-based revenue streams by charging for certain types of high-value alerts, such as overdraft probability notification and management.
Expansion of digital payments:
Cash is not king and banks are focusing more on digital payments in 2021. All banking processes are automated and real-time updates are used for many services while customers are offered support via in-app chat.
Bank executives believe that new technologies such as blockchain and artificial intelligence (AI) will have the greatest impact on the banking sector.
Technology has changed the global finance system, Blockchain can bring new technology and can eliminate the threat or the risk of fraud in all areas of banking, this could equally apply to a trading platform. Also, Blockchain solves problems related to banks such as operational risk and administrative costs creating transparency for all..
Humanising digital experience:
Digital Interaction means banks are on the spot to provide interactive experiences, on demand tailored and consistent with each individual’s unique needs. Most customers still depend on human interactions to solve their problems.
Financial institutions that learn how to blend human touch with digital interactions can be successful in building trust and emotional connections with customers.
Over the last few years, traditional banking shifted to become more intelligent and experiential. Banks have to find new ways to satisfy their customer needs and emerging technologies support the financial institutions to survive in these critical times.
Open platforms are becoming more popular and some banks are offering nonfinancial services to their customers. Banks can transform their product and services to gain new clients and retain them. More than ever, banks realise the importance of flexibility, adaptability, self-sufficiency and teamwork during the pandemic. Banks have to offer customised products and services to their customers while being innovative, that will be the most demanding trend in the future.