Updated: April 26, 2022
This is an exciting time for banking and finance. After spending two years digitising core products and services to catch up with the consumer’s growing appetite for digital , firms in the sector are ready to innovate and maximise technology beyond legacy migration. And here’s where to start:
Localising Digitised Experiences (EU)
The vast majority of large and mid-sized companies in the sector have developed and digitised core products such as mobile applications and online websites in the last two years. In fact, KPMG believes that “digital platforms will likely become the preferred and dominant business model for banks and financial institutions in the future” . But with that being said, as going digital becomes the norm, what becomes a solid differentiator in the market?
Although significantly enjoying the efficiency and mobility of going digital, research shows that there is retained demand for the human touch and local feel from consumers . More evident within Europe and patrons of regional banks, the local in-branch experience has been identified as a significant asset and a valued factor across stakeholders in the vertical. With people enjoying immediate attention from staff and enjoying what seems to be close, first-name-basis relationships with them. And we believe that replicating it in the digital space will be a game changer.
Apart from this effort compensating for financial institutions closing down physical branches to reduce costs, this will allow more familiar or even intimate engagement to ingrain a better sense of satisfaction and connection on the client side.
Closely tied to the consumer’s call for localisation is the popular expectation of a seamless and personal customer experience . And as each individual manages their finances differently and actualises unique preferences, hyperpersonalisation is providing stakeholders with the bespoke and convenient experience they want.
May it be an option to automate repeat transactions – such as autopay and autosave, the provision of niche products for distinct consumer groups, or tailored suggestions for investments each individual can make, the AI-enabled initiative to truly put each customer first is going above and beyond expectations. In the long run, maximising your knowledge of your clients beyond the normative KYC and putting that to action can deeply cultivate a strong and long-lasting relationship with each valued customer.
On the topic of improving the consumer experience, businesses in the trade can also expect big things from changing their approach towards Identity Verification (IDV). This is more popularly known as the Know Your Customer or KYC process. As several studies have identified ease of registration or application as a crucial factor for online banking and fintech access adoption, safe and frictionless IDV through open banking or data sharing initiatives will likely become a big hit.
As the trend of open banking and data sharing is being pushed by regulators (most notably in Europe, Australia, and Hong Kong) and is slowly crawling into neighbouring markets , an increasing number of organisations are realising the value of IDV. In fact, the projected market revenue for IDV is expected to reach 18.12 Billion USD by 2021 .
Digital IDV solutions are now capable of verifying a broad range of official documents in seconds and analysing extensive user records from accredited databases in minutes. Because of such developments, not only do companies avert repelling on-the-go consumers, they also significantly catalyse complete consumer conversion. How? By shortening the time between application and approval – a small but dangerous window quick-acting competitors can steal your prospects through.
Digital finance transactions frequently cross over to various other industries such as retail, healthcare, and utilities. On point, the emergence of third-party payment providers such as PayPal and AliPay largely attribute their success to making the most of this phenomenon .
Due to the commonly lengthier transfer process and tediousness of going back and forth between banking apps and other business sites, many consumers are turning to third-party providers who most likely have already made themselves available in growing digital spaces such as e-commerce. In terms of proportion, the global tally of online banking direct payments are 5.3% lower compared to third party payments accounting 39.7% .
By embedding payment services such as developing mobile pay or hybrid wallets available for cross-platform transactions, your business can turn the situation around. Evidence of this can be observed in the growing popularity of Payment Mini Program Integrations within WeChat in China. By integrating services such as payments or transfers as a bite-sized app or service in the multi-purpose WeChat app, many finance vendors have not only increased awareness but also significantly raised their total revenue outside of interbank and intra fintech transfers . This goes to show that in the advent of digitisation spanning industries serviced by the financial sector, visibility will be the key to sustaining business.
Circumstances have opened up the opportunity for banking and finance companies to reinvent themselves and future-proof the business. And technology and digital have afforded you a ticket to seize this opportunity.
Monstarlab’s global pool of technology experts can help you find your way to the right technologies and uncover executions that would make the most business sense and value. Working closely with you to understand your goals and align the most relevant technologies.
 Deloitte, “2021 banking and capital markets outlook”
 KPMG, “The rise of digital platforms”, 2018
 Forbes, “Financial Institutions Think Consumers Are All About Digital, But Customers Still Want That Human Touch”, 2021
 Deloitte, “Open Banking around the world”, n.d.
 Identify, “Identity Verification in The Financial Services Industry”, 2020
 Atlantis Press, Jingyi Liao, “Research on the Influence of Third-Party Payments on the Business Operations of Commercial Banks”, 2018
 SilkPay, “The complete guide to WeChat mini-programs for your business”, 2020
The Journal of Asian Finance, Economics, and Business, “Factors Influencing Customers to Use Digital Banking Application in Yogyakarta, Indonesia”, 2020
Alhassany & Faisal, “Factors influencing the internet banking adoption decision in North Cyprus: an evidence from the partial least square approach of the structural equation modelling”, 2018
Ananda, Devesh & Lawati, “What factors drive the adoption of digital banking? An empirical study from the perspective of Omani retail banking”, 2020