A Five Step Framework for Digital Banking

By Anthony Nakandalage, Head of Digital, Fiserv

The foundation of any financial institution is its relationships with customers.While that once meant a friendly face and a handshake, the way customers want to engage with the companies with which they do business has evolved.

Our world is an increasingly digital one, and financial institutions are dependent on technology to deliver services to customers.Successfully delivering the capabilities and experiences customers expect requires more than implementing the brightest and shiniest new capabilities. It requires translating the personalization of face-to-face experiences to the digital world. This can only be done through a comprehensive digital approach grounded on key principles. Here are five to consider as a framework for a digital journey.

1. Honest Self-Assessment

Before deciding where to go, it is important to understand where things stand.Start with a comprehensive and honest assessment of digital assets and competencies. This includes an objective analysis of digital strengths and weaknesses, including internal capabilities, staff, processes, technology and leadership. Additional assessments include evaluating the market in which the financial institution operates, and surveying customers to determine their wants and requirements.

Understanding the digital maturity level of an organisation, how it compares to others, and the demands of customers,will shape the strategy and vision for the future. 

2. Create the Right Digital Strategy

The right digital strategy will vary depending on an organisation’s goals and the needs of its customers. It is therefore important to take a comprehensive approach that considers customer engagement at every touchpoint – from online and mobile, to call centres or in a physical branch.

Each touchpoint should complement the other, making it easy for customers to move seamlessly from one channel to another,regardless of where they are or how they choose to interact.

Change can seem daunting. However, many financial institutions turn to a partner to help kick-start the digital transformation journey. These partners offer external insights through strategy sessions and other discussions, which can help turn digital vision into an executable strategy.

3. Implement the Strategy

Successful strategy execution depends on multiple factors, such as leveraging the right technology, choosing the right providers and partners, and implementing across-the-board staff training.

There is no ‘one size fits all’ set of digital capabilities. The best approach is to offer the capabilities that will best suit customers, prioritising what is important to them. Some to consider include digital frictionless customer on boarding and account opening, engaged personal financial management, and intelligent alerts.

Staff training is also a crucial component of strategy execution. Exposure to and education about digital banking capabilities can help foster a digital mindset, which is particularly important among customer-facing staff.Digital advocates in the branch and the call centre can explain digital services to customers encouraging them to give the services a try.

Digital advocates strengthen relationships with customers and can help the organisation rise to the challenge posed by non-traditional digital providers.

4. Tailor Experiences for Different Customers

Different customers want to interact in different ways, and digital solutions can facilitate a tailored yetcost-effective member experience. Capabilities can be offered to customers depending on their financial needs and digital preferences.

One effective way to tailor experiences is by creating person as that reflect customer segments. While it may be tempting to segment based on age or gender, that may not always be an effective way to create digital personas. Many other factors, such as the income or assets of a customer, or the complexity of their financial life, are often better predictors of digital financial services needs.

5. Sustain Customer Relationships

Digital experiences provide an excellent opportunity to nurture relationships, and digital data can help shape an understanding of the customer and provide insights to help create value in a variety of ways.

For instance, access to data can help financial institutions determine which products are being used and adopted by which customers, and under what circumstances. And the marketing team can identify which segments of customers are most likely to use certain services, so that they can launch targeted outreach promoting these services to other likely users. Of course, it must be ensured the necessary data use permissions are obtained, which often can be done with the help of technology providers.

The Digital Mindset Imperative

As financial services innovation continues to accelerate, financial institutions with a robust digital strategy will be positioned to foster higher levels of communication and personalisation with customers, opening the door to a deeper level of engagement.A successful digital strategy isn’t only about technology and processes. It’s focused on meeting the wants and needs of the customer with services that are intuitive, inspired and innovative.