The rise of the self-service bank

Amin Lalani, CIO Executive, Financial Services, Huawei Western Europe

The proliferation of mobile devices and digital technology has changed the way financial services do business, with customers seeking electronic, virtual and mobile experiences more than ever before.

As a result, the banking industry is under pressure. Firstly, to provide a service that can be accessed “anytime, anywhere” and promises customers’ services whenever and wherever they need them. And secondly, due to a lack of investment in technology innovation and limitations imposed by regulation, new entrants such as Atom Bank are disrupting the market with new and more flexible online services to customers. This will become even more prevalent with legislations such as Payment Services Directive 2 (PSD2).

In order to transform channels, products and services, banks need to digitise and look at omni-channel and smart banking platforms that can be flexible, accurate, innovative and secure to provide the best possible customer experience.

A smart banking strategy

The Internet is changing the relationship between consumers and physical money. With technology companies providing more convenient financial services online, many customers now prefer to conduct transactions over their mobile devices as it saves time and is much more flexible. A recent Deloitte research revealed that 63% of consumers now use banking or finance related applications, while 28% use mobile devices to transfer money.

To remain competitive, banks need a smarter strategy. This can be done by looking at three separate areas. Firstly, banks and other financial services should transform physical channels from being transaction centered to socially centered, where customers treat branches as a value-added digital service that involves mobile online banking and ATM interactions. Banks should also ensure physical branches are modernised for those customers who prefer face-to-face communications. Given the cost of running branches, consideration should be given that a branch footprint could be  Virtual Teller Machines in a shopping centre. These devices could provide all the services currently available in branches and extend further by allowing account creation and card embossing in a matter of minutes.

Secondly, financial services should look to improve their digital channels. This can be done by upgrading online banking by simplifying processes and providing direct banking to allow customers access to the services they need without assistance. It’s important that banks also explore mobile banking. By promoting mobile banking with built-in features and developing applications that incorporate payment solutions and other products, customers are more likely to be engaged. Banks should also leverage social media platforms to build the brand and also learn customer needs and expectations to enhance the overall banking experience. If you look at solutions such as WeChat it allows real time messaging, calls but has integrated banking services such as peer to peer money transfers; paying for a taxis; splitting a restaurant bill amongst friend to name a few scenarios. Banks are ideally positioned given access to propriety data they have. Banks also have the size to enable an unprecedented scale of social purchasing power.

Finally, financial institutions should look at multi-channel integration, to ensure customers in different channels are presented with a consistent user experience and can seamlessly move from one channel to another without interrupting or re-doing the business flow. The future of omni-channel should be focused on the online services, supported by branches, ATMs and call centres.

Combined, these three factors create what we term the ‘self-service bank’. These allow customers to access banking services “anytime, anywhere” through any device seamlessly, securely and with ease, raising customer satisfaction significantly.

Implementing the technology to support the self-service bank

To be successful, smart bank strategies must be supported by the right technology, which flexible and a materially lower cost point. If deployed correctly cloud technology and big data should be the foundation on which to build your future roadmap.

Cloud computing and open platforms provide optimal solutions for banks’ business systems. An open platform IT system supports a bank’s real-time transactions and provides dynamic, continuous operation. Cloud technology introduces a number of competitive advantages to the financial industry, including cost reduction by transferring large capital expenditures into small-scale operational expenses that provides higher quality storage and backup services with lower costs. It also helps with business continuity. Cloud technology delivers data protection, repair and disaster recovery. Gone are the days that you needed to buy complex and expensive hardware from one of the traditional technology providers. Hardware and networking is increasingly being considered as commodities and provided it supports Open standards and meets the reliability and price points is a sound buying decision.

To fully support a digitisation strategy and transform into smart banks, banking institutions must also use big data technology to support cross-sector platforms and omni-channels. Implementing big data technology moves banks from a narrow understanding of their customers to multi-dimensional insights. Smart banks provide superior customer experiences via touch-points discovered through the use of big data analytics.

Future of banking

With the Internet continuing to shift customer behaviour and expectation across a number of different sectors, it’s more important than ever for financial institutions to implement smarter digital strategies. It will be those banks who embrace IT in new and innovative ways and provide a exceptional value adding banking experience for customers that can be accessed “anytime, anywhere” which will be most successful and truly self-service.

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