The world we live in is constantly evolving, and so are the businesses. They are becoming more customer – centric, more accessible, and most importantly - more digital.
But what does it mean for banks? Almost half of banking customers are using only digital channels for their transactions. In the last three years, over 2,800 branches of banks have been closed. So, looking at these facts, are we right to assume that changing preferences of banking customers are going to influence the way banks operate and inevitably lead to the great Digital Transformation within financial institutions?
But ‘Digital’ is about much more than that. Digital is a complete transformation of the fabric and foundations of the organisation. In most cases, it is a massive, fundamental transformation to the business model of any company. And when talking about financial sector, becoming digital requires the replacement of industrial-era business model of banks based upon branches with the digital-era model of banks based upon servers. This is a completely different business model, which focuses on the digital distribution of data through software and servers on a global network of systems known as the Internet. Thus, 'going digital' is a great business, cultural and organisational transformation based upon an enritely new business model. In order to be successful, it involves significant investments, resources, and acceptance and effort of everyone within the company, including employees, top management as well as the C-suite.
Why Banks Need to 'Go Digital'?
As like for any other company, there’s a great number of reason why banks should ‘be digital’.
1. It Is Cheap
First of all, digital banking is more than likely to give a boost to your business bottom line. Of course, at the beginning you need to invest some money to transform your business, but as an investment, in the long run you can expect it to bring you more revenue. Moreover, all transactions done online are dramatically cheaper than those done in the branch. As stated by PwC, branch transactions cost roughly $4 each, while online and mobile transactions cost $0.09 and $0.19, respectively. It is a great difference and seeing how many people prefer mobile banking, you can be sure that they are going to use your online services.
2. It Is Agile
Becoming digital native makes banks much more agile. It allows them to adapt to rapidly changing tastes and preferences of their customers. By going digital, financial institutions can test, learn and when necessary – fail fast. Utilising modern infrastructure, banks can quickly and easy tailor products or services they offer, for example new advisory services or accounts types, as well as change prices for their offerings when suitable. Let’s not forget about the fact that digital core along with open architecture enables flexible partnering with third parties, what can result in offering a great variety of new products and services. Going digital makes it possible to set up functional, digital native bank by using third-party architecture in the cloud.
3. It Is Customer - Focused
Becoming more digital, does not only make it easier for you but it also makes it easier for your customers. Banks can provide their clients with seamless experiences, which will perfectly match their preferences as they are designed based on their needs. Moreover, banking processes, which used to require a lot of time and paper work will become much less time consuming and more convenient. Just imagine, if your customers have problems with opening new bank account, they’re not that likely to further use your services. Nowadays, people want everything to be quick, easy and convenient and if you can’t deliver it to them, your competitors will.
4. It Is The Future
Digital Transformation, isn’t going anywhere – it is here to stay and change the way businesses operate. And if your bank won’t accept it, then most certainly, you’re likely to face big challenges in the future. The internet, mobile devices and emerging technologies are all changing customers’ habits and the way they bank, and in order to survive in the industry, banks must respond to these changes.
B60 is a global leader in delivering Digital Transformation and Technology Development and works with ambitious firms in the U.K. Europe and USA across multiple sectors. Since 2012 B60 has been embracing digital change by utilising our unique operating models, frameworks and methodologies to truly drive innovation and change from within our clients businesses.
If you’d like to discuss with one of our experts on how you could successfully deploy Digital Transformation and Technology Development in your business drop us an email at email@example.com or alternatively call us on 0121 405 0270.