By Hamish Thomas, UK Head of Banking Technology at EY
Consumers' digital expectations are now evolving faster than anyone would have imagined just a few years ago. Across multiple sectors, including retail, leisure and transport, consumers have grown used to personalized services at their fingertips, and the banks must keep pace.
The pandemic has further accelerated digital adoption – achieving years of progress in a matter of months – and expectations of service providers' digital offerings continues to grow. This is evident in the prevalence of on-demand services, the ubiquity and rich functionality of smartphones, and increasingly advanced digital products and experiences.
Beneath the surface of the visible evolution of digital products and services, advances in technology are generating vast amounts of data, and increasingly enabling the use of that data to provide insight and understanding of people's behavior, circumstances and needs. Being able to harness this data and associated insight in real-time is critical to meeting customers' expectations and delivering differential service and experience. This creates both opportunity and challenge for banks and the pace of their digital transformation.
Following a year of lockdown, the switch to digital banking will become permanent for many customers whose digital footprint had been more limited before 2020. Accelerated adoption of online and mobile banking and the increasing use of digital payment methods have added to the rich pool of data that banks, particularly established institutions with large customer numbers, can use with appropriate consent to better understand what their customers need, and to shape services accordingly to create richer, more relevant engagement.
Context is key to improving customer experience
Many institutions are already making good progress in catering to consumers' heightened expectations by developing improved digital offerings. Banks that want to create long-term value now need to adapt business models to help customers navigate through the crisis and beyond. They must build new revenue streams in a low interest rate environment; find ways to give customers the products and services they want in a post-pandemic world; and deliver these in a way that is sensitive to their circumstances.
Technology can now deliver on past promises
Knowing that a more contextual and personalized service is required is one thing – delivering it is quite another. The key to success will be leveraging the increasingly rich data that banks have access to – from both internal and external sources – to create ever more insight-led journeys in real-time. As a concept, this is not new, however, the technology and the pace at which it can be deployed has only now caught up with the vision. This is exciting, as it means the next stage of digital banking progress is truly in the offing.
Technology is now at a point where powerful, cloud native, robust, intelligent solutions can be rapidly deployed by financial institutions to create value from data, often without the need for wholesale modernization of the technology estate. By implementing these solutions, banks have the opportunity to deliver what a customer needs in the right way and at the right time for that specific individual or business. In doing so, they can offer a greater experience, which will drive more sustainable business growth and enable more engaging and accessible digital banking.