The client has long ceased to be a passive consumer. The reason? The emergence of the internet has given consumers greater control in their relationship with companies.
Nowadays, consumers of financial services have higher expectations and more information at their disposal, while being less loyal to a company.
Digital banking has become the preferred channel for many customers, especially among young and high-income clients, and banks must try to gradually increase sales through this medium.
About 67 percent of global bank customers already use digital platforms, and 515 million people worldwide have opened a digital account through a mobile financial provider in the last three years, according to studies done by business software company Oracle and the World Bank, respectively, cited by the American Banker magazine.
The president of Spanish bank BBVA, Francisco González, indicated in a panel during the World Economic Forum in Davos that the challenge is “to become a digital company as soon as possible”. Half of the bank’s clientele was in the digital world in 2018, he added.
The arrival of this more sophisticated and less brand-loyal customer has led banks to expand the distribution of their products and resort to analyzing large data sets, or big data, and cloud computing to fine-tune their offerings.
The new distribution channels are basically three: online banking, mobile banking, and social networks. As numerous studies have shown, these tools allow banks to develop services in low-banking countries and regions, particularly in developing countries.
Social networks, in turn, are communication and attention channels and have become key factors in the brand image development of companies. Thus, they constitute a way to connect with customers in a medium where they feel comfortable.
At the same time, and as a study by KPMG points out, "the digital age is marked by omnichannel”, meaning that these channels complement each other.
For these reasons, adaptation to digital media, notes a report by PricewaterhouseCoopers (PwC) and Spain’s IE Business School, "must go beyond the goal of reducing costs and must be integrated into the corporate strategy." The potential revenue that banks can obtain "by attracting young clients are an incentive to develop sophisticated digital platforms," the report says.
Does all this mean bank branches are to become a thing of the past? Certainly not, but they should focus on specialized advisory tasks and personalized attention.
Technology within reach
The application of new technological resources points to a new era in banking. Data analytics, for example, allows banks to gather more and better information from their customers.
The use of big data also improves cross-selling of products based on purchase patterns or interests shown online. It helps control fraud, minimizing the risks of improper use of payment methods and improving credit rating systems, as well as incorporating elements such as interactions in social networks. It also contributes to customer loyalty and retention.
Cloud computing, on the other hand, is a new model for the provision of business and technology services based on Internet servers that the user can access at any time and from any device connected to the network. This new model is cheaper than traditional technological infrastructure, which are more difficult to adapt to real capacity needs. The cloud adapts to any demand, facilitating innovation and improving the supply of products and services.
Finally, another new web technology mentioned by the study, the APIs (application programming interfaces), are the basis for developing banking apps, which offer data and news about the bank’s offerings, provide personalized information and allow customers to carry out the transactions they need. They also have other mobile features, such as a camera, NFC technology and GPS.