If you are a banker, techie, representative or most significantly a customer in BFSI Segment, I would certainly take it for granted you must have listened to the new buzz word "Digital Financial". In my circle, I did conversation with numerous people and also remarkably, no two individuals seem to regard this in very same manner - well, this is sort of exaggeration, however you get the picture! This made me take a time out and also assume what this can imply to someone like me who is an expert in the industry, to address if a colleague, friend, or someone at my box asks me regarding this. As a real CrossFit athlete I comply with a minimum of the very first regulation - tell everyone you come across concerning CrossFit.
The factor I bring up CrossFit is not even if of my fascination or, even fixation. CrossFit is a little bit of facility as well as intimidating to those unaware, however to place it simply it is toughness and conditioning program, which enhances health and fitness. CrossFit defines fitness itself in terms of 10 elements - Cardiovascular Stamina, Endurance, Adaptability, Stamina, Power, Speed, Agility, Control, Precision, Balance. However, normally if you ask any of your friends what is fitness, you may get several reactions. E.g. a runner will certainly state capability to run half-marathon, or a weight lifter might state deadlift of a minimum of 1.5 x body weight, or a man right into yoga might say doing 108 Suryanamaskaras. Well, each of them might be right in their own method. Your meaning of physical fitness may be doing all of those, or you might just say I am healthy sufficient if I have the ability to do my 9-to-5 work without taking any kind of authorized leave in an appraisal cycle.
On the exact same lines, financial institutions might interpret Digital Financial in their very own terms as well as in a similar way, people like you as well as me will certainly have formed some opinion based upon our very own exposure.
For many years, financial institutions of all shapes and sizes enhanced a great deal by adjusting to IT/ ITES (IT Enabled Solutions) and they have attained diverse levels of success. However, because of absence of concentrated and longterm method, development of disjoined systems, swiftly transforming business and running situations, etc, the desired objectives may not have been completely recognized. A few of those " fell short" initiatives can have been driven by the organization's desire to be an very early adaptor of a modern technology or fad (betting on a incorrect steed). As a matter of fact, we might lose a huge possibility, if we do not identify and bet on a winning equine. So, the method is banking on the ideal equine, at a correct time - i.e., when the probabilities are low. Commonly, markets utilize what is called a Hype Cycle to assess a new technology or pattern. If you are interested to recognize what is a "hype cycle", please see best joint account Gartner's method. I will certainly attempt to string together several of the crucial aspects of Digital Banking, as unlike the majority of the buzzwords, it is neither a solitary solution nor a modern technology.
Simply around the time (2008-10) I spent concerning a year plus in Brussels, three huge banks (Fortis, Dexia and KBC) which constantly stumbled upon as very threat averse lenders from the BeNeLux area, began dealing with significant stress as well as their value wore down considerably as well as activated heated discussions in the community - who thought their cash is constantly risk-free with the financial institutions (either as a depositor or share owner). What really happened there, is very complicated. Key variables being, big sovereign financial debt floating between 84 to 99% of GDP, absence of Government for 533 days, etc. These activated liquidity problems. If you contribute to this various other turmoils in the banking sector globally, it is easy to understand that the " depend on" within the system was under threat. Exactly how would we develop trust fund? By being clear. Customers require (not want!) transparency in the entire system. Younger the consumer base, that need felt is much more intense. This, when you look from the altering consumer experience and also assumptions from retail market ( Amazon.com, Flipkart), transportation (Uber, Ola), food sector (Zomato, FoodPanda, ZaptheQ), you understand where the financial sector is. Consumers have reset the assumptions in terms of worth, experience, and also options. The Secret takeaway for the banker - Customer Experience - abundant, consistent, mobile (anywhere), protected, enhanced worth.
Many people I have actually connected with just recently on this subject, believed Internet Banking or Mobile Banking as Digital. Yes, this is only the start of what could be Digital Banking. Most likely, they cover earlier collection of customer expectations. Moving on, could we see a day soon, where there is no paper in any one of the banking transactions? When I say paper, I am not simply referring to currency! Couple of points which are currently in practice in couple of banks and also gaining momentum across are - digitizing procedures within the bank (like customer on-boarding, car loan application), cheque truncation systems which allows you to take a picture of the cheque on your mobile as well as send to your financial institution, and so on - there by bringing effectiveness in decisionmaking, capability to customize processes to specific client needs, conserve some unneeded trips to the branch, etc. This might imply simply put, executing file/ image management systems, business process administration as well as monitoring systems, incorporating these parts within the existing IT remedies. The Trick - digitizing inner processes.
Social network in the last few years have brought greatest effect across borders - be it, Tahrir Square transformation, Ice Pail Obstacle, which mobile to purchase, exactly how we order as well as spend for lunch or determining a fine eating place and sharing while sharing the expense. Social Media is currently bring interruptions in terms of which bank to count on, what they can get out of a bank in regards to services, provide a voice to their dissatisfaction. Which consequently implies, banks have to get on the exact same Social Media listening to their consumers, offering their solutions as well as additionally inevitably, attracting brand-new customers, retaining the consumers as well as even more significantly, ending up being "The Goto Bank" if the consumer has several accounts. As an instance, what could not have been expected few years back, in Kenya, one of our respected client's Twitter handle (@ChaseBankKenya) uses Twitter to attach, launch and share CSR activities, and also address customers' questions as well as worries very properly. That is, The Reach element.
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.