Digital transformation has been a buzz word for some time, with banks of all sizes scrambling to adopt it across the board. But, if you’re moving towards digital transformation, what does it actually mean? Digital transformation in banking largely entails the shift to offering online and digital services, as well as the massive number of backend changes required to support this transformation.
Many banks make mistakes by taking on a series of separate digital initiatives, which struggle to succeed because they don’t have the support or coordination to compete with digital-native solutions. Instead, digital transformation in banks must entail a top-down approach, integrating digital systems, customer experience platforms, apps, and infrastructure in the form of AI, big data, and blockchain technologies.
While digital transformation in banking can and does mean many things, the following tenets will get you on the right track to strategizing your own bank’s digital transformation journey.
Create a Digital Customer Journey
All banks have a website, most have some form of a digital app, and likely online services and features to go with it. These digital features encompass most of what people think of as “digital services” but don’t encompass digitization in any way. However, they do allow you to take a major step towards digital transformation, which is digitizing the customer journey. How? And what does it entail?
The most important aspect of digitizing the customer journey is that the customers are moved seamlessly from marketing to sales as part of an online application for financing through in-app billing, all the way to customer support, directly in the app.
Traditional customer journey or sales pipeline often starts with marketing building leads, transferring those leads over to sales, and then transferring those sales over to customer service. An individual must go through several departments before they ever receive a product or service, resulting in a disjointed and disconnected or often impersonal result.
Creating a digital customer journey means taking steps to integrate everything into a single online platform so that the customer is handled through the same tooling, sometimes by the same people, and with the same information throughout the process. Here, practices like changing how teams are organized, integrating technical people into sales teams, and possibly merging marketing and retail into the same team can help a great deal.
The most important aspect of digitizing the customer journey is that the customers are moved seamlessly from marketing to sales as part of an online application for financing through in-app billing, all the way to customer support, directly in the app. Achieving this means mapping the customer journey and building tools and applications around it, with a focus on specific critical points. For example, a digitized customer journey allows a customer to click on an ad, sign up for an account online, receive tutorials and on-boarding information through their app, receive automated loan decisions, and pay bills or send funds online.
Most banks have too many customer journeys to map all of them, but focusing on key consumers and mapping points like initial prospecting, sales, onboarding, transactions, and management will cover most of your base needs.
This sort of digitization in banking means understanding customer wants and needs and investing in those wants and needs. However, it will save you money in the long-term as it improves customer satisfaction, frees up staff for value-added activities such as relationship building, and eventually saves time by automating processes.
Digitalization and Big Data in Banking
Modern banks have more data than ever before. The more digital services you offer, the more data you automatically collect. This data allows you to take huge steps in terms of updating and managing your operational model, your customer service, and even your business strategy. Data allows you to understand customers in new ways, using that information to identify opportunities, optimize products and services, and automate solutions.