It’s no surprise that the world faced a need for better digital banking services when the whole world was locked inside their homes due to the global COVID-19 pandemic. Currently, it doesn’t seem like our lifestyle will return to normal anytime soon, that’s why the need for digital transformation is ever prevalent. Online banking services are the only seamless way to conduct financial transactions without having to go to brick and mortar locations and stand in line for hours.
While online bank account verification and digital banking platforms have already become mainstream in the industry before the pandemic, they were far from being perfect. According to reports, an Omni Channel customer experience is required for financial institutions to stay relevant in the time where FinTechs offer financial services.
Online banking platforms are the key to delivering an Omni Channel experience. While the financial institutions focus on online banking upgrades every couple of years, the customer needs of 2021 have pushed the need for these services even further. Banks and financial institutions often underestimate how well needed these engagements are. To successfully build a digital structure for banks, a significant amount of money, planning, and oversight is required. The complexity of implementation differs on how vast the bank is. As a bank, if you’re focused on digital transformation, then there are certain factors to avoid.
Factors to Avoid for Ideal Digital Transformation
1. Lack of an Integrated Program
A detailed, end-to-end program is vital for succeeding in building an integrated program. Identifying all the parties involved (internal and vendor-related) is vital to determine a path that holds teams and individuals accountable for their actions. A full end-to-end channel needs to be designed before building any online banking platform channel.
The majority of financial institutions ignore the need for this level of planning. These sample plans, however, are never focused on and don’t consider the full scope of the need for digital channels. An integrated program should focus on determining all the risks associated with a digital channel.
2. Ignoring the “Customer-First” Rule
Where most banks fail while trying to offer a digital experience is that they ignore the needs of the customer. Regardless of the type of financial service you’re trying to offer, you should always keep the needs of customers in focus. In the next five years, most of Europe’s banking customers will be self-directed as to how the online world operates. The whole world on the other hand isn’t familiar with how digital banking services work and how they can help customers in enhancing their customer experience.
Another essential aspect to consider is the demographic of digital banking customers. As of right now, the most technologically acclaimed customers are between the age of 16 and 34. Focusing on this particular demographic will help in building a broader and more loyal customer base.
When it comes to digital banking, banks don’t have to leave the older generation out of the process. Providing a customer-friendly UI for the older generation is also a part of building an ideal digital banking system.
3. Ignoring the Need for Technologies
It may seem simple to offer digital services while still keeping up with traditional banking practices, but ignoring technologies will only result in inefficient digital banking services. While focusing on building a digital bank, both financial institutions and FinTechs need to make a list of services that are essential for customers. The main concept behind a digital bank is to make life easier for customers and businesses in conducting financial activities.
The use of technological services like online document verification solutions, online KYC verification software, and open banking APIs is the key to building an ideal digital banking system. When it comes to combining technologies, partnering with digital verification and customer onboarding companies is the best method available.
The first step in building a digital bank is to ensure that customers have a positive onboarding experience, but it is equally important to ensure that the customer data is safe, and protected.
4. Don’t Be Afraid of Innovation
As the number of digital-only banks is growing, so is the competition among the banks to gain a huge consumer base. When it comes to building a successful digital bank, being first isn’t as important as providing digital services that are secure, fast, and trusted. Most banks are focused on copying the growing FinTechs that are offering better financial services. To become an industry leader, banks can’t be afraid of innovation.
It’s important to find a style and system that fits your brand and the needs of your customers. This is a major factor to consider while trying to build a digital bank. This doesn’t mean that you can’t offer similar services, almost all the banks offer similar services but the key is to find your unique style.
5. Beware of Regulatory Changes
One thing that’s constant about the financial industry is that it’s ever-changing. As fraudsters evolve, so do the KYC and AML regulations. The last ever thing that you want to avoid while building digital banks is the ever-changing regulatory regulations. Additionally, failure to comply with important regulations will result in fines and an inability to operate further.
The EU recently passed an open banking mandate that requires all banks and FinTechs to collaborate and operate using Open Banking APIs that offer access to customer data. When building a digital bank, it’s essential to make sure that regulatory changes can be handled as quickly as possible. The reason for constant changes in regulations is to provide customers with better financial services all the while diminishing the risk of fraud.
