If you are a lender, techie, agent or most notably a customer in BFSI Segment, I would take it for approved you need to have listened to the brand-new neologism "Digital Banking". In my circle, I did chat with several people and remarkably, no two persons seem to regard this in exact same manner - well, this is type of exaggeration, but you understand! This made me take a time out as well as believe what this can imply to someone like me who is an insider in the industry, to address if a associate, buddy, or somebody at my box asks me about this. As a real CrossFit professional athlete I follow at the very least the very first policy - inform every person you find regarding CrossFit.
The reason I raise CrossFit is not just because of my attraction or, also obsession. CrossFit is a little bit of complex and also intimidating to those uninitiated, yet to put it just it is strength and conditioning program, which enhances health and fitness. CrossFit defines fitness itself in regards to 10 parts - Cardiovascular Endurance, Stamina, Flexibility, Toughness, Power, Rate, Agility, Sychronisation, Accuracy, Equilibrium. Yet, normally if you ask any of your good friends what is physical fitness, you might obtain numerous feedbacks. E.g. a jogger will state capacity to run half-marathon, or a weight lifter could claim deadlift of a minimum of 1.5 x body weight, or a person right into yoga might say doing 108 Suryanamaskaras. Well, each of them may be right in their very own method. Your meaning of physical fitness might be doing all of those, or you can just claim I am in shape enough if I have the ability to do my 9-to-5 job without taking any sick leave in an appraisal cycle.
On the exact same lines, banks can interpret Digital Banking in their very own terms as well as similarly, people like you and me will have formed some viewpoint based upon our very own exposure.
For many years, banks of all shapes and sizes maximized a lot by adapting to IT/ ITES (IT Enabled Services) and also they have actually accomplished diverse degrees of success. However, because of absence of focused as well as longterm approach, development of disjoined systems, quickly transforming business and operating scenarios, etc, the desired goals may not have actually been fully recognized. Some of those " fell short" campaigns might have been driven by the organization's impulse to be an very early adaptor of a modern technology or fad (betting on a incorrect steed). However, we might lose a substantial chance, if we do not identify and also bank on a winning steed. So, the trick is betting on the appropriate equine, at a correct time - i.e., when the probabilities are low. Commonly, markets utilize what is called a Buzz Cycle to evaluate a new technology or fad. If you are interested to understand what is a "hype cycle", please see Gartner's method. I will try to string with each other a few of the key aspects of Digital Banking, as unlike most of the buzzwords, it is neither a solitary service neither a innovation.
Just around the time (2008-10) I spent about a year plus in Brussels, 3 huge financial institutions (Fortis, Dexia and also KBC) which always stumbled upon as very risk averse lenders from the BeNeLux region, started dealing with major pressure and also their value deteriorated significantly and triggered heated disputes in the community - that thought their cash is always secure with the banks (either as a depositor or share owner). What truly happened there, is very intricate. Secret factors being, significant sovereign financial obligation floating in between 84 to 99% of GDP, absence of Government for 533 days, and so on. These caused liquidity concerns. If you add to this other turmoils in the banking market around the world, it is very easy to realize that the " trust fund" within the system was under threat. Just how would we build trust fund? By being clear. Customers need (not desire!) openness in the entire system. Younger the consumer base, that need felt is more severe. This, when you look from the transforming client experience as well as assumptions from retail market (Amazon, Flipkart), transport (Uber, Ola), food sector (Zomato, FoodPanda, ZaptheQ), you know where the financial industry is. Clients have reset the assumptions in regards to worth, experience, and alternatives. The Key takeaway for the banker - Customer Experience - rich, consistent, mobile (anywhere), safe, boosted value.
Lots of people I have actually engaged with recently on this topic, believed Electronic banking or Mobile Banking as Digital. Yes, this is only the start of what could be Digital Financial. Most likely, they cover earlier set of consumer expectations. Moving on, could we see a day quickly, where there is no paper in any one of the financial deals? When I claim paper, I am not simply referring to currency! Couple of things which are already in practice in few banks as well as obtaining energy throughout are - digitizing processes within the bank (like client on-boarding, lending application), cheque truncation systems which permits you to take a photo of the cheque on your mobile as well as send to your bank, etc - there by bringing performance in decisionmaking, capacity to tailor processes to particular consumer needs, conserve some unneeded journeys to the branch, etc. This might indicate to put it simply, executing file/ image management systems, business process monitoring and also tracking systems, incorporating these parts within the existing IT remedies. The Key - digitizing inner procedures.
Social media site in the last couple of years have actually brought most significant impact across borders - be it, Tahrir Square revolution, Ice Bucket Obstacle, which mobile to get, just how we order and pay for lunch or recognizing a great dining place and also going Dutch while better banking sharing the costs. Social media site is already bring disturbances in terms of which financial institution to depend on, what they can get out of a financial institution in terms of solutions, lend a voice to their discontentment. Which subsequently means, financial institutions have to be on the same Social Media listening to their clients, selling their solutions and also eventually, drawing in brand-new consumers, maintaining the clients and more importantly, coming to be "The Goto Bank" if the consumer has multiple accounts. As an instance, what might not have actually been expected few years back, in Kenya, among our distinguished client's Twitter manage (@ChaseBankKenya) uses Twitter to connect, launch and also share CSR tasks, and address consumers' queries and problems really efficiently. That is, The Reach factor.
Another silent thing happening behind the walls in a bank is called Data Analytics or Big Data. These churn out unprecedented insights into customer behavior and preferences, driving extremely focused strategies. These also help customers to understand their spend analysis, plan their budgets, financial goal management etc
. Apart from these key components, there are several others which could make the bank more "digital" - chat and video discussion facilities to bring bank closer to the customer when he/she needs it, or educating customers through online tutorials like financial literacy, tax planning, etc, integrating various solutions and systems in the bank to reduce data replication and redundancy and helping the bank make more Straight Through Processing systems there by reducing errors, cost of operations, and increasing efficiency in the entire system. Banks could significantly increase seamless data exchange with others partners like regulatory bodies, clients, government bodies thus making entire process much more transparent and efficient.
Finally, the big question is what should be achieved from the big task list to call a bank "Digital Bank"? Just like in fitness, there is no single solution or the right solution. Each bank has to define its own strategy, execution plan to reach the goal of customer delight, operation efficiency, and overall share holders' enhanced value.
With our sharp focus on Core Banking Solutions, and wide range of experiences in consulting, implementation, testing, integrating several solutions at various banks across the globe, we at Bfsi consulting will be glad to engage with you or your team to help realize some of these goals.