Rapidly evolving technology and changing customer expectations are forcing banks to rethink business models.
As customers become indifferent to brands and channel agnostics, opportunities for new entrants to make a real claim for market share present themselves. Digital-native competitors, customer-centric from inception, are moving in to challenge the banking status quo.
New industry players, born out of evolving technology and customer expectations, are shifting the banking ecosystems. In this setting banks' digital transformation is imperative, with a changing environment necessitating a culture of innovation and customer-centricity.ã
Banks face growing pains as they develop an increasingly customer-centric model. Invisible silos that have inhibited innovation are devolved in favor of agile start-up like principles, so banking cultures start to reflect the pace of change in technology, and subsequently, customer expectations.
Despite growing pains, banks must evolve with culture of customer-centricity at the heart of their digital transformation. The industry has historically been slow to change. But as the pace of change intensifies, with technology enabled competition threatening the status-quo, banks must create internal structures geared to be agile and open to innovation.ã
Winners and Losers
The winners will be those that effectively organise their operation around the customer, as opposed to channels or products. The advancement of digital channels is paralleled by the customers’ expectation of a seamless, and integrated omni-channel experience. But, paradoxically banks aren’t structured in a manner which reflects this.
The ability to develop a single customer view, offering relevancy and personalisation at every step of the journey, is the holy grail. To achieve this, banks must create an organisational structure built with the customer at the front of the mind. The development of customer-centric banking models, therefore, will be crucial in 2016.ãã
By becoming truly customer centric, banks can deliver the right services in the right way, at the right time, and through a channel that fits customer expectation. In order to do this, a complete focus on the customer is a fundamental requirement.
Banks must ask themselves some simple questions: What do customers need? What do customers want? And what might customers like if somebody else invents it?
With an ever increasing number of fintech players entering the market, these fundamental questions are as important as ever.
Banks face a battle against systems designed for a bygone era. The challenge today is how to remove friction, empower customers, offer value and support, and personalisation in real time. Intelligent use of data is key.
Naturally, not every fintech challenger will have longevity. Some will come and go; others will alter the banking ecosystem for some time to come. But, what is clear: if banks don’t want to lose customers to new digitally-native entrants, customers’ needs must be placed at the heart all thinking.
The blooming fintech industry offers opportunity as well as threat. Bank-fintech collaborations fantastic opportunities for personalised, seamless customer experience (for those who can spot who the fintech winners will be).
By Jamie Harding, Head of Research, One Connected Community.â