• David Titterton, Engagement Director, Banking, Insurance and Financial Services at Monstarlab


• 06.09.2023 12:15 pm
#banking

After neobanks, or 'challenger banks' in the UK, made headway in the market on the back of the 2007-2009 banking crisis, their impact on conventional banks has been significant. Promising a more customer-focused, transparent and technology-oriented service, they represented a faster, easier and more convenient alternative to traditional banks. This, combined with digital disruption across the board when it comes to customer experience, not just in banking, has made gaining a competitive advantage tough for incumbent banks. To keep up with the pace of change and meet their customers’ evolving needs, retail banks and building societies need speed and agility, as well as investment in technology and services. They must transform the way they empower their employees, serve customers, adapt to change and get ahead of the curve.

The traditional bank’s inherent strengths are the key elements to getting back on track against digital-first competitors. Incumbents should build on their brand familiarity and (often) trusted reputation amongst consumers for keeping customer money and (in most cases) data safe. They should seek to frame their digital future by leveraging expertise, especially the human element, and carry it into the realm of digital. Selecting and successfully implementing the best-fitting technology with the right strategy and service design can help banks turn today’s challenges into opportunities; catching up with their neobank rivals and even getting a nose infront of the digital curve to accelerate their growth  - while also responding to and exceeding changing consumer demands. 

By marrying the more traditional elements of their banking heritage with new digital experiences, banks can provide value, enable a seamless user experience, convert consumers, and remain visible in the face of digital disruption. In this article, we’ll highlight the digitalisation strategies that will help banks and financial institutions to go beyond the legacy migration of digitised core products and services.

Localisation and curation of digitised experiences

Research shows that there is still a demand for that ‘local feel’ and friendly ‘human touch’. Replicating this within the digital space will therefore be a critical transformation factor. Apart from the ongoing effort of banks to compensate for closing physical branches, recreating these intimate, engaging interactions will ingrain a higher sense of satisfaction and connection on the customer side.

Improved identity verification

With studies indicating that ease of registration or application represents a critical success factor for online banking and fintech access adoption, safe and frictionless IDV through open banking or data-sharing initiatives will be key to accommodate on-the-go consumers and catalyse complete consumer conversion by shortening the time between application and approval - a strong selling point for potential customers. 

Maximised hyper-personalisation

Every individual manages their finances differently, which creates unique preferences, and hyper-personalisation takes these preferences to provide users with the seamless, bespoke experience they expect. Providing AI-led, tailored suggestions for unique consumer groups, like the option to automate repeat transactions such as autopay or autosave, allows the bank to put each customer first. 

Integrated (and perfect) cross-platform services

Digital finance transactions frequently intersect with other industries, from retail to healthcare or utilities. The emergence of third-party providers such as ApplePay has largely capitalised on making the most of this crossover, often at the expense of online banking direct payments. By embedding payment services such as developing mobile pay or hybrid wallets in cross-platform transactions, banks can win this business back. 

The strategies outlined above offer a roadmap for traditional banks to not only catch up with neobank competitors, but also stay ahead in the rapidly changing financial landscape. By blending the strengths of their banking heritage with innovative digital experiences, these institutions can provide exceptional value to customers, deliver seamless user experiences, and remain resilient in the face of digital disruption.