As we age towards digitalisation, new fintech startups emerge and spare no effort in pleasing tech-savvy customers. These startups are also Neo-banks or BNPL lenders amongst many others. Their user interface tends to outshine even the large commercial banking giants. However, the unfair advantage of large banks is their wide customer base. So how can these banks keep up with the digital competition?
Challenges faced by traditional banks
During the past few decades, the banking industry has undergone an astonishing shift as technology digitised every operational banking element. While the new normal was the ease of business for many newcomers in the market, it posed a challenge for traditional banks, operating conventionally for many years.
How can traditional banks create their digital footprint
While the large banks still have a user base, they have the opportunity to sustain them with various operational changes in their banking models. One way to do so, is to partner with fintechs. Fintechs are known for their impeccable back-end technology. Collaborating with them will ensure faster growth of traditional banks and enhance user experience. Another option, is to strengthen themselves technologically. Here are a few ways through which banks can modify their services to comply with the digital era:
1. Provide better banking value to customer experience
Along with providing banking services, banks should take the extra mile to look beyond. For instance, they can extend their services from providing home loans, to consulting in decision-making for buying one. It makes the entire journey substantial and fulfilling.
2. Revamp the bank-operation model
With changing times, the financial needs of the customers also evolve. Banks should make sure to keep themselves updated on the status quo. Their services should keep updating both in terms of technology and customer experience.
3. Leverage the power of data
Using analytics to drive better performance is inevitable in today’s banking environment. Analytics help reduce cost, increase efficiency and assist in making better decisions. Investing in good data scientists and analysts will pay an incredible ROI in a long term.
4. Explore open banking
Open banking allows third-party applications to securely access customers’ financial data with their consent. Such data is used by businesses and fintechs to provide better-customised services. Hence, it allows financial institutions to communicate better.
While the digital transformation of the banks is still in process, there are innumerable approaches and scope for innovation. To survive the competition with Neo-banks and challenger banks, it is inevitable for commercial banks to embrace futurism. This approach combined with consistent evolution will induce better customer experience, superior business operations, and long-term evolution.