According to the 2017 report by The Financial Brand on retail banking trends and predictions, major trends focus on consumer data, the use of advanced analytics, the ability to personalize the customer journey, and improving the customer experience. Big or small, digital banking does, in fact, apply to all financial institutions today as we head into the modernized world of user experience design and technology.
Large and established financial institutions have already begun the first leg of their digital transformation, using web and mobile applications to create convenient and personalized experiences for their customers. Some have already incorporated services like banking chatbots into their systems. Bank of Montreal, for example, recently launched AI-powered chatbots on Facebook and Twitter while Bank of America introduced “Erica,” a virtual financial assistant. More than ever, small banks and credit unions need to integrate a seamless digital experience if they want to keep up with the trends of retail banking today.
Retail banks that pursue a full digital transformation can realize improvements in earnings more than 40 percent.
McKinsey’s recent publication on the rise of the digital bank indicated that retail banks that pursue a full digital transformation can realize improvements in earnings more than 40 percent over the next five years. “Almost two-thirds of this potential value comes from the impact of digital on the cost base and loss provisions rather than from revenue uplift, which is why a focus beyond front-end investments is critical.” Automation can realize 40 to 90 percent cost reduction by improving internal processes with workflow tools and self-servicing capabilities. On the frontline, tools such as digitalized application forms delivered on an iPad instead of paper can also enhance the overall customer experience.
As a CTO of a small bank or credit union, you are most likely well aware of where banking is headed. You know you need to create or rebuild your digital banking app so that your bank can stay relevant and up-to-date with customers and the competition. As you evaluate your options to hire an internal team of technology specialists or partner with an organization that’ll build the technology for you, consider the speed of delivery on the execution of your product.
The banking industry isn’t traditionally known for shipping out products quickly, and understandably so; banks have regulations and legacy systems in place. Establishing a partnership with an agile digital product development team that can build the technology for you will actually give you access to specialists who are accustomed to working fast and building something based on your customers’ needs.
Working with external specialists also gives you a new perspective on areas you may not have considered. For example, when you’re working with many stakeholders within the same organization, it can be challenging to come to a firm decision in a timeframe that can get your project moving. Agile organizations are accustomed to making decisions fast and with data to back it up. Working with them will allow you to move along faster in your process to build a better application.
