The benefits of complete digital adoption and increased data flow

By Chris de Bruin | 16 March 2017

Chris de Bruin – President, Digital Platforms, Zafin

Over the last decade, banks have become increasingly aware that the only path forward is digital. We’ve seen banks launch digital strategies, enhance their digital channels, or even launch “digital arms” to their businesses.

But this isn’t enough; banks cannot simply re-design a website and or launch a mobile app refresh, only to sit back and proclaim themselves “digitised.” If banks want to play a commanding role in the digital ecosystem, they need to run a fully digital business – and to do that successfully, digital transformation must be ingrained as a key strategic pillar of responsibility, with investment allocated and prioritised accordingly.

A half-hearted attempt at digital transformation from a bank can actually do more damage than good to the enterprise. As soon as banks make good digital capabilities available to their clients, they expose the inner workings of the company. Any flaw in the process, anything that’s not real-time or illogical in the mind of the customer very quickly becomes public to people that are using the service – and digital outages as a result of messy core infrastructure can ruin customer relationships. So the first step banks need to take is to improve the health of their core process and technology infrastructure.

Once banks have addressed this core, they are in a strong position to realise the true benefits that come with being a digital business – namely the increased data flow. 

Banking data can be broadly categorised into three forms. The first is basic data, which is used to characterise clients – their demographic, their behavioural patterns, and their needs. Armed with this information, banks are in a strong position to understand their customers and market products and services to suit their basic profile.

However, humans don’t tend to fit seamlessly into neat profiles, so data that sets customers apart and identifies their unique usage patterns is incredibly important. Unfortunately, many banks are not equipped to capitalise on this capability. By becoming a fully digital business, banks can ensure that all of their systems talk to one another. This empowers them to sync up data from their front-end digital channels, with information including when and how often the customer tends to visit the bank. By using every interaction as an opportunity to learn about customer behaviour, banks can build a real understanding of how clients use their products and services, and use this insight to consistently make improvements.

Performance tracking data is the third and final set of information that can provide invaluable insights to a bank. To truly reap the benefits, banks should be ready to incorporate performance tracking data into everything that they build. If my expectation as a client is that I will get an answer when I click the button on the screen, I should get an answer when I click the button on the screen. Banks have to deliver what is expected. If someone else delivers it better elsewhere, they are out of business.

Being a truly digital company means never sitting back and considering the product or service as final. The Amazons, Facebooks and Googles of this world are barely recognisable from their original offering. Truly digital enterprises are in a constant state of R&D and testing, and using performance tracking is crucial to this. Every client interaction should be tracked in terms of how long the process took for the customer, or how well systems responded to requests.

It’s understandably tempting for banks to take a “softly softly” approach to digital banking, After all, a complete digital overhaul can be daunting. However, this is a short-sighted strategy, which will lead to repeated investment later down the line. Introducing a middleware layer between core banking and other legacy systems and customer-facing channels provides banks with the benefits of replacing the core without the associated risks and unmanageable investment requirement.

By operating as a digital-by-design enterprise, banks are in a strong position to reap the full rewards of playing a role in the digital ecosystem.

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