What do the consumers want from banks today? Are they happy with the traditional in-person service or have they moved on to the digital world and expect banks to offer services on the same?
There is no debate that over the last few years, digital banking has become a preferred method of conducting business. An alternative to the brick-and-mortar banks, even though there is a large percentage of the population that still relies on the traditional format. It is time the world moves towards digital banking.
So, what is digital banking? It is a system, where all banking activities are done through one/more digital platform[s], and where the amount of paper based transactions is next to non-existent [cheques, deposit slips, Demand Drafts, loan applications and so on] and information is available online. It basically means all activities can be carried out through the website or mobile banking applications [apps] or other digital channels.
Banking services are made accessible from any time and across any hand held device. There is also a high level of automation within the system to allow for self service. The digitally savvy customer looks for organizations that offer seamless digital services at their “time”. These digital banks utilise open banking and API’s for all third parties to stay connected and offer high levels of banking experience for their customers. All this makes them the ideal open source banking platform for customers.
Across surveys and studies carried out by leading banks and research firms, the conclusions were pretty similar.
Customers are looking for banks that:
- Make it easier to manage their money and finances [including investment & loans]
- Help them take better informed decisions about their finances
- Help prepare them for their future
- Provide products and services that meet their preferences and demands
- Provide seamless transaction that can be completed from wherever they are
- Access their accounts, or obtain updates with the click of a button
- Provide real time updates and information on any changes
Customer behaviour with reference to Banks
Some reasons why traditional banks are failing..
COVID-19
Traditional banking is what most of us are familiar with. It was all about “face-to-face” interactions and attention to customers, even if it meant waiting for hours. While the entire strategy behind banks was to build strong relationships with customers, and continue the journey together, the system has been failing over the years. With COVID-19, the number of customers walking into a bank is negligible, and so banks have been forced to rethink their business strategies and adapt digital technologies.
Operating expenses
Operating expenses are quite high in the traditional banking system as the need to maintain a large physical space, resources, and branches that customers can access is the foundation of their business. Having branches across the demography is another added necessity that adds to the operational costs.
Set working hours
Traditional banks have fixed working hours, beyond which customers need to wait until the next working day. Customers cannot access their account any time they wish to, and they need to visit the branch for clarifications or other activities.
Slow processes
All said and done, the way processes are set in a traditional bank is fairly slow when compared to the digital banks. There is a protocol, a hierarchy to be followed and if one person is unavailable, there are further details. Similarly, the need for paper based transactions causes delays. Transaction between banks is also slower, especially if there is a holiday or a weekend in the midst of it all.
Limitations in virtual banking services
While almost all traditional banks have a website for the customers to access, the services offered are limited. Many come with a clause that requires the customer to visit the bank, present documents required and same applies to using few products [debit or credit cards for example]. All these are limitations that prevent customers from enjoying the services offered and causes undue delay [in case of emergencies or unplanned contingencies].
Four Major Advantages of Digital Banking
- Higher Interest Rates
When moving to online banking, there is an increase in the interest rates for both savings and current accounts. Even though the difference is minimal, it does make a difference in the long run, especially if you maintain a fairly large sum in your account. - Fewer Fees & Charges
With the traditional banks, there are quite a few additional charges and fees levied — non maintenance of minimum balance, cheque books, Demand draft charges, debit card fees and so on. Since online banks work with lower operational costs, the customer enjoys additional benefits. While ATM withdrawal limits and credit card charges are applicable, it is negligible at the end of the day. - Convenience
The biggest advantage of digital banking solutions is the level of convenience it provides. Customers can access their account anytime, from anywhere, and on any handheld device. They can check their account balance, transfer/receive funds, apply for loans and other activities online. Infact, digital banks offer instant alerts and notifications whenever a transaction is made. This also helps customers stay assured of their money. The alerts and notifications help keep track of spends or incomes and notifications in case of fraudulent activity. While most traditional banks offer these instant alert services, they’re not available at all hours and you need to make a visit to the branch to clarify. - Security
One of the concerns associated with anything digital is security lapses. Digital banks are secure and your data is protected. If ever someone other than you tries to access your account, you will receive an alert. Similarly, there are passwords and two step authentication features available that adds a layer of security.
When compared to the traditional banking system, digital banking is all but the physical branch used extensively. Banking too has moved beyond the four walls and is now exploring the virtual world to offer customers unparalleled service and is sure to become the way of the future, even in small towns.
At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. Some of the reasons to work with Neutrinos are:
- Create intelligent, data driven, customer-centric experiences.
- Integrate technologies like AI, ML and RPA in banking & financial services for faster, more transparent and automated processes.
- Automate and transform business processes for faster TAT, maximized efficiencies, minimal expenditures and efforts.
- Create intelligent omnichannel experiences tailored and personalised for the customers.
- A single window view of the customer with data unified from both structured and unstructured sources, to enable superior customer engagements.
- Empower customers and agents with quick, easy and seamless digital account opening in simple steps.
- Provide reliable, secure and user-friendly e-payment & billing solutions, with all regulatory rules and documentary evidence requirements enforced.
We are a company offering low code in banking solutions along with being an omni channel banking platform. All solutions are all customer centric and ensure you offer the highest level of customer experience.To understand how you can achieve digital transformation in banking sector, reach out to us now.