Published : 7 years ago, on 02/04/2018

by Mark Greenaway, Head of Emerging Business, Adobe

With the rise of smartphones, smart watches and voice assistants, consumers have the opportunity to interact with companies through more channels than ever before. These technologies have also totally transformed consumer expectations, with customer satisfaction now measured not only in terms of the overall quality of their experience, but increasingly by the speed and efficiency of their interaction.

Historically, consumer banking has involved going into branches during the correct opening hours, and manually signing contacts to open a bank account or get a mortgage. Now customer expectations have changed in line with other digital solutions. This culture of immediate gratification with a seamless customer experience across all digital touch points can no longer be considered a ‘nice-to-have’ across any industry – and banking is no exception.

With British banks closing more than 700 branches in the last year, it’s obvious that consumers, particularly millennials, are increasingly opting for (or are required to search for) digital alternatives over visits to their local back branch. Mobile banking transactions are expected to more than double by 2022, and interactions at retail bank branches are expected to decrease by as much as 36% during the same time frame.

As the financial sector moves towards a mobile-first, customer-led model, retail banks need to look at adapting current business models in order to remain competitive with consumers. The rise of exciting challenger banks such as Monzo, which was granted a full banking license in 2017, mean that the competition amongst established financial institutions and emerging fintechs will be fierce. These challenger banks are offering digital alternatives to traditional banking methods and changing the direction of consumer behaviour. So how can banks leverage such a shift in attitudes to their advantage, in order to remain viable competitors?

Starting with Customer Experience

Banks need to start considering how they marry their online and offline processes together, to ensure they’re operating in line with changing consumer expectations. This doesn’t need to mean an upheaval in existing infrastructure, rather, banks can look to integrate existing technologies with new services to improve efficiency for customers – offering them alternatives that are more in keeping with their increasingly digital lifestyles.

Take, for example, the simple task of signing documents such as mortgages or loans. Electronic signatures or ‘e-signatures’ present huge potential for banks to improve operations and provide digital authentication solutions for customers remotely.This not only improves the experience for the customer, but also helps to improve a bank’s overall security and potentially increase revenue, due to encrypted digital documents and time saved through efficient processes.

When RBS integrated e-signatures into their digital offering, they saw the time taken to receive signed mortgage documents from their customers decrease significantly. One mortgage switch was completed in just seven minutes using e-signatures, when the process would have previously taken between 5-14 days using paper documentation.

E-signatures offer cross-border document verification and multi-tiered authentications – all essential for retail banks operating in an increasingly digital and mobile environment. This also means that consumers are not tied to the physical store when it comes to interacting with a bank; they can complete processes anywhere, on any device, at a time that’s convenient to them.

The latest research from Adobe, around outdated administrative processes, reveals that consumers are becoming much more accepting of these digital alternatives; as many as 79% of people agree that they use handwritten signatures much less these days, with nearly half (49%) saying they would feel comfortable using digital or e-signatures going forward. By integrating existing applications with an established e-signature solution, banks can ensure that they are not only providing an efficient and easy-to-use option for their customers, but that they are also compliant with the broadest range of legal requirements and security standards.

Transforming Digital Transformation

The pace of digital transformation continues to accelerate exponentially. Going forward, banks can expect the rise of emerging technologies such as AI, machine learning and blockchain to have a significant impact on their overall structure and the ways in which they interact with customers.To keep up, banks need to rethink the way they approach digital transformation, considering it as an investment, rather than simply a cost.

Digital transformation cannot be a case of updating existing strategies with the latest technology. As digitisation takes over, retail banks that have layered digital over their core branch component may need to change their model and take digital as the core focus going forward. This will not only improve the customer experience, but also have a positive financial effect; according to IDC, companies that are embracing digital transformation are already 26% more profitable than their peers.

Currently 90% of retail banks across Europe invest less than 0.5% of their total spend on digital advancements. Customers won’t wait for the banks to catch up. Recent analysis shows that over the next five years, more than two-thirds of banking customers will be “self-directed” and “highly adapted”.With so many clear benefits to investing in digital solutions, including reduced costs, increased efficiency and improvements to the overall customer experience, it is up to banks to innovate or risk being left behind by their tech-savvy customers and competitors.