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Digitisation Is Helping Banks Develop Customer-Centric Business Model
Digitizing the process of loan lending and fulfilment experience will speed-up and deliver flexibility to the consumers to view and sign their documents online.
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The banking & fintech sector has embarked on a radical integration across virtual and physical environments. With more and more of us adopting a digital lifestyle, banks are focused on revamping their websites and conventional channels to simplify and make it contextual based on the usage pattern of the customer than the earlier one size fits all approach. In an ecosystem with ample online and offline buying options, digital channels are not only confined to offer a cheap interface to customers but are now crucial for expanding market share, executing promotions and stimulating sales 1 . Having said that, consumer banking is only one side of the proverbial coin.
Corporate customers are equally, if not more important for banks and fintech organisations. It isn’t difficult to assume what the next decade would look like for organisational operations. McKinsey 2 predicts automation of almost 40% of strategic activities (reporting, analysis, financial controlling and planning, treasury) and 75 to 80% of transactional operations (payment processing, general account operations). Consequently, operational staff will use technology to deliver superior customer experience by offering faster issue resolution, customised products, and more.
Shifting business paradigm from traditional to digital – A holistic approach
Today, banks focus more on what their consumers want, and how and when they need it. Lucrative and qualitative results of technologies such as AI, RPA, data analytics, etc. are further encouraging them to go digital.
Let us explore how such technologies are benefiting banks in streamlining their internal processes and attracting tech-savvy user base.
Extensive automation minimalizes process timings
Automation has already become an integral part of consumer banking. In the coming years, it will penetrate deeper within operations to benefit the cost structure of banks and their consumers. For instance, digitizing the process of loan lending and fulfilment experience will speed-up and deliver flexibility to the consumers to view and sign their documents online. As a result, automating the loan approval process would shrink wait times from days to minutes and would eliminate the margin of error.
To illustrate a fintech company is being trailing out customer onboarding by simplified just a consent to access data from his google id, the details needed like his basic details , his residence address , work address gets auto populated by using his location co-ordinates and the time he spent in each location 3 . This not only enabled a superior customer experience, it also increased the loan applications significantly for the bank. While not only capturing his must details the fintech has also getting a better view on his life style which is making them apply more intelligence before loan disbursement so that there are few NPA.
Unified customer experience enhances convenience and reduces cost
While business are aiming to provide contextual solution the technology arm of banks are trying to keep the IT cost to minimal by embracing more open source technologies than earlier days where it was firm no no! As a classic example NPCI is embarking on moving the whole payment and blockchain architecture of there’s into cloud native as well as completely built on Open source. This is helping them to keep the cost low and helping wider adaption of UPI and with wider adaption by using cloud native its also helping them to do auto scaling of the infrastructure based on the volume.
Prompt response and 24x7 availability – Absolute customer delight
Embracing interactive technology such as AI chatbots, banks have redefined the way to interact with today’s high-tech consumers. Digitally advanced customers prefer to avail banking services from opening a bank account to getting reliable advice of better financial management, simply by tapping on their mobile screens. And AI chatbots meet up to their expectations effectively and at the same time, simplifies the backend and frontline banking operations.
For example, a US based commercial bank launched a chatbot to analyse complex contracts proficiently and quickly. Subsequently, the chatbot saved 360,000 hours 4 of labour for the organisation. Furthermore, the bank used it to find sources of income, innovative ways to reduce risks and ways to cut-down expenses.
Frame a roadmap to accelerate digitization and get future ready
Banks must look at the bigger picture and think from a 30,000 feet perspective in order to mobilise their marketing organisations for the challenges ahead. Although, banks are already investing in technology for structural redesigning and launching innovative products and services. This approach will require a pivot in thinking about digital channels as it would not be fair to consider them in isolation and cost containment tools. Instead, banks need to strategically think on how to choreograph their sales and marketing promotions across offline and online channels, delivering the perfect, engaging experience that offers the utmost value to consumers and prompt customer loyalty.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.