The Undeniable Profitable Power of Digital Banking
Profitable Digital Banking
A new wave of technology is revolutionizing the way customers engage with their finances. The banking sector is moving fast towards digital transformation and is rethinking the way they do business to deliver a better customer experience for retaining and increasing the gain from their customer base.
Digital Transformation for any financial institution goes far beyond the operation changes from the normal process of branch operation into the digital and online operations. It is a huge move by which financial institutions are able to connect with their customers, understand their behaviors and deliver and exceed customers’ expectations while acquiring more customers. This process starts from understanding the proper digital channels for connecting with customers, collect and digest customer’s preferences, what they like and dislike, their interests and lifestyle and most importantly: the customer . Consequently leading the institution from being a product-centric to a customer-centric organization.
HOW DIGITAL PLATFORMS BENEFIT THE CUSTOMER
The overall consumer culture has the chance, the idea of achieving tasks on the move is the dominating direction Digital banking platforms enable customers to access all their banking services and perform multiple types of transactions based on the unlimited possibilities for banks to add new digital financial services and to even manage owned marketplace of services. Self-banking services create a real virtual banking experience where customers are able to perform all traditional in-branch customer care services such as requesting a cheque book, confirming a cheque, adding a new account, anywhere, anytime with no need for branch visits. Additionally, banking products are available for enrollment, subscription, and usages such as prepaid card, loans, savings, and more. Moreover, banks are establishing open communication channels with customers beyond the bank’s working hours; by being available 24/7/356 days a year even during all national and seasonal holidays. Banks use this channel to share content, news, product updates, and offerings by pushing them directly to customers on their own smartphones. In addition, brand new possibilities and innovation are available only for the digital banking channel such as transferring directly to a mobile phone or using social media contacts for sending find and others that are available for delivering a unique unconventional digital banking experience where customers have full control over their finances and expenses, often from the comfort of their home. Therefore cutting all efforts and time consumed for the journey of branch visiting results in a better customer experience and increasing customer satisfaction.
IDENTIFYING CONSUMER BEHAVIOR
Regarding the banks, digital transformation helps in extending their understanding scope of customers by stretching the customer reach and eliminating the need of physical presence, resulting in acquiring new customers through digital channels, wider access for customer segments, in addition to a better solid connectivity between banks and their customers.
Digital channels enable the bank to observe and analyse consumer behavior through collecting the users’ actions and usage timings; e.g. when do customers review their accounts, when do they pay their bills, what do they request for or complain about most, what kind of transactions they use most and others. Consequently leading to a better understanding for customers’ interests and needs.
SERVICES TAILORED TO FULFILL CUSTOMERS’ NEEDS
Granting banks the power of establishing a digital connection with their customers concludes that they can identify their users’ behavior and interests, accordingly banks are able to customize various digital services to their different customer segments. In addition to, customizing the same services to various customer segments to meet their diverse needs. For example, a loan service offered to an employee for purchasing a house is designed and delivered differently from loan service that is targeting students for university education funding. It is the same service but the bank can customize to different segments.
For boosting banks’ ability to understand customers and react quickly with different services and adaptation due to the diversity of customer demand, market and regulation changes, CIT VERICASH has created an innovative digital banking platform designed specially to empower banks to handle the high dynamics of the digital market. VERICASH platform allows design, build and aggregate just-in-time services where customers can use the services they want, the time they want, and the way they want. The platform provides multi-level UX management tools enabling the fastest delivery of innovative service-driven user experience, customized for different users across various programs and still offered on the same platform; covering different customers’ needs and priorities from high net-worth professional banking customers interested in high-profile services such as international remittance, to simple banking customers who looking for micro-financing services and remittance to their families into a mobile money accounts. Moreover, VERICASH includes a multi-level user experience customization when offering a digital banking channel for customers so it is ensured that banks can easily customize and configure services to various segments instantly with minimized time-to-market for new systems and nor maintenance or downtime for live systems.
VALUE ADDED SERVICES (VAS)
For Banks to build a sustainable and successful digital strategy and to grow their market share, they need to focus on providing various types of traditional and non-traditional digital financial services. Traditional services include bringing transfers, loans, overdraft services to the digital channel, which nontraditional services are concerned with bringing lifestyle services to the digital channel which helps customers to adapt the new channel. Nontraditional digital services are usually called Value Added Services (VAS) which refers to any service that is not related to the banks main business and provided by an external service provider. Such services can be brought to and performed on the digital banking platform. Such services will allow the bank to monetize the digital platform by collecting revenues and commission from customers and service providers once these services are consumed. Additional benefit of bringing VAS to the digital platform is facilitating and enhancing the customer journey with the bank. Famous examples for VAS are tickets reservation or purchasing via the digital channel, bill payment, airtime, etc.
Other business value feature is to support banks current business through digital channels including customer acquisition through digital banking where any user can access bank digital channels and register for opening a bank account. In case the bank does not have many branches in a specific region, the digital channel will be a competitive edge for increasing the reach for customers at a lower cost among competition thus increasing consumer-base for the bank. Moreover, the digital bank channel can be used for sending notifications and updates for the customer with all bank products and offers.
In view of the above it is clear that, digitalization is leading and changing the future of the banking sector. Accordingly, banks should seriously consider a strategic shift towards digital transformation with related major investments. Since it is a profitable and beneficial process for both the banks and the diverse segments of customers, through the value-added services which is a tool for making a successful digital banking business.