We had the pleasure of attending the Banking Transformation Summit yesterday, it was a fantastic opportunity to gain valuable insights into the ongoing transformation in the banking industry.
Here are some of our key takeaways from the event:
1️⃣ Shifting Customer Expectations: The primary driver for banking transformation lies in meeting changing customer expectations. People now desire a “touch button” experience, where services are frictionless, and issues are swiftly resolved through phone calls or seamless in-app support.
2️⃣ Focus on Customer Experience: Consumer duty has become a positive regulatory requirement, prompting financial institutions (FIs) to delve deeper into understanding customer experiences. This emphasis on fairness and customer-centricity challenges banks to go beyond mere compliance and work towards continuous improvement in customer experience (CX).
3️⃣ Challenge to Universal Banking Model: Fintechs and challenger banks are actively challenging the universal banking model. By offering better services and personalized experiences, they are successfully targeting various segments of the end-to-end supply chain. Universal banks must strive to maintain a holistic view of their customers and provide tailored solutions to stay competitive.
4️⃣ Repurposing Branches: Traditional banks face the significant challenge of repurposing their branches effectively. It remains uncertain how branches can provide superior value compared to mobile and digital solutions. Nevertheless, the human element plays a vital role in maintaining the trusted advisor relationship historically associated with traditional banks. Repositioning branches as “well-being” hubs, where customers receive personalized support and advice, is one potential solution.
5️⃣ Digital Solutions and Human Interaction: Challenger banks view branches differently and don’t necessarily equate them with human interaction. They argue that digital solutions are equally effective at delivering the human element. Traditional banks must find innovative ways to balance digital transformation with maintaining meaningful human connections.
6️⃣ Mutuality as a Differentiator: Building Societies distinguish themselves from other banks through the concept of mutuality. While legacy IT remains a common challenge, building societies should focus on striking the right balance between technology and the human aspect of their services. Technology transformation efforts should aim to enhance the mutuality concept further.
7️⃣ Evergreening for Technology Modernisation: Evergreening, a concept often overlooked, plays a crucial role in successful technology modernisation. Building societies, like Nationwide, recognize the importance of including evergreening in consulting proposals. Its absence indicates a lack of understanding of the key components necessary for a successful technology transformation.
8️⃣ Customer-Centric Digital Transformation: Many traditional banks approach digital transformation without placing the customer at the center. Instead, their primary focus is on driving efficiency, reducing costs, and modernizing technology infrastructure. To ensure effective digital transformation, FIs should start with the customer, prioritize improving CX and services, and make this the guiding principle when choosing their approach and solution providers.
9️⃣ Frictionless and Optimal Outcomes: Frictionless experiences do not necessarily equate to quick or fewer clicks. Some FIs have key performance indicators (KPIs) centered around the number of clicks. However, adding an additional step in a process, such as a confirmation step when sending money, can lead to better outcomes and increased accuracy. This highlights the importance of optimizing the customer journey, even if it means including additional steps.
Overall, the Banking Transformation Summit conference shed light on the crucial factors driving banking transformation and highlighted the need for customer-centric approaches, innovative branch strategies, and the right balance between technology and human touch. By embracing these insights, the banking industry can successfully navigate the evolving landscape and deliver exceptional experiences to their customers.
