As more customers goes digital in the way and manner they carry out their transaction in this digital era, organizations especially banks and other financial service provider like insurance companies,have no choice than to go with the flow. While many financial institutions are quick to jump on the mobile and digital bandwagon, the industry in Nigeria is still at the teething stage in terms of mobile technology and still has a long way to go in taking advantage of the rapidly evolving technology. Coming from the analogue, consumer-facing banks, adapting to fast-moving technological changes can be a matter of survival.
For instance, almost all major banks, insurance companies, and investment firms have mobile apps. However, according to recent survey of conducted by biznesswatch.com on digital consumers, the results showed that an alarmingly high percentage of respondents are unaware of financial services mobile apps available to them.
Even if customers are familiar with them, too many are hesitant to use such mobile services due to concerns over security, privacy, and ease
of use. Those who do take advantage of mobile services are mostly conducting rudimentary transactions they can already do online via their desktop or laptop. Companies have yet to fully leverage mobile technology to ramp up Engagement with customers. What’s more, the highly dynamic nature of mobile technologies is likely to present financial services companies with two additional challenges.
First, “mobile” is becoming less about a specific device and more about how to augment customer interactions with the multiplicity of technology options available now, with more to come in the near future. Initially, mobile services was viewed as a convenient extension of services over the phone, offering voice activation, push-button instructions, and live interactions, mobile now encompasses a range of digital devices and applications to widen engagement opportunities with customers on the go, as well as those who increasingly use mobile devices.
Facing competition from new tech-forward competitors, most banks have already begun this transition. In many cases, however, it has not been a smooth journey. Use of mobile and online banking platforms is still relatively limited, and different banking channels often operate in silos – hindering ease of use. How can banks overcome challenges encountered with introducing services via digital channels?
The emergence of new technologies has opened new channels through which financial institutions can deliver services to their customers. Smart devices, in particular, are packed with different technologies that offer new opportunities for service delivery, such as apps, mobile Internet browsers, geo-location, and even biometric input as unveiled in the new iPhone5.
Initially, many banks aimed to keep up with the emergence of new digital technologies by pursuing a short-sighted strategy: offering existing services via new channels in a siloed fashion. In order to win the digital war,banks must look beyond a short term strategy. Existing services must be offered via omni channel, as failure to do this will be confusing to the customers and create security vulnerabilities, with fraudsters and hackers able to exploit the weaknesses of disconnected channels.
Ultimately, cross-channel banking offerings have often failed to take into account one key factor: how customer behaviour differs via each new channel. Banks have learned that simply cut-and-pasting existing services into emergent digital channels is not enough.
Gone are the days when banks think they can replicate what they did before and apply the same strategy to their multi-channel banking projects. Any bank that wants to survive in the Digital era must realise that computers, tablets, and mobile devices are all completely different channels that deserve separate and optimized approaches. The banks must to take into account their customers need, and prioritized the introduction of new technology over human-centered design. For there to be positive impact, the digitalization of the (banking) relationship needs harmonization with the real world.
From multi-channel to cross-channel to the new-and-improved “omni-channel,” these buzzwords have proliferated to describe the way forward for banks amid the growing tech frenzy. But at the core of all of these words is a simple question: how can banks deliver a seamless user experience across the range of devices and channels available to customers?
To be able to win the digital battle, banks must be ready to shift from a “build it and they will come” mentality to identifying exactly how and why specific customer segments are using specific channels, and meeting them there. The Digital Customers no longer use only one channel. Rather, they may begin the journey on their mobile, continue it on their laptop, and complete the process at their local bank branch. It is an experience the banks must be willing and ready to provide their customers for them to have a seamless digital banking experience. And that is the direction in which the next generation of banking systems is moving. The general trend in retail banking is that , when the right product is offered to the right customer segment through a desired channel, the end result can result in overall cost savings and the enhancement of the customer experience.” Taking this process a step further – ensuring seamless integration across these customer-centered channels can encourage active usage of new channels.
Although industry analysts and banks seem to know the way forward – designing seamlessly-integrated and human-centered digital platforms – the challenge has been in execution.
One major concern, about the digital service delivery is how to understand and address security and reliability issues that arise in omnichannel banking environments. Every single new technology and combination of technologies that gets added onto smart devices introduces new security vulnerabilities into the mix.
As financial institutions introduce new channels for service delivery, for instance, they are ceding some control over the services – outsourcing certain portions of the value chain to ecosystem partners such as mobile network operators and Fintech companies. Banks need to have a strategy in place to conduct risk assessment of new technology and proactively invest in security against potential risks. While banks need to ensure consistency of service across multiple technological platforms, another area of importance is how they can ensure that their offerings are supported by all devices and operating systems? For instance, what if a customer has an Apple smartphone and a Windows tablet? How will the user experience differ across these environments, and how can banks ensure a smooth experience regardless of device or operating system?
Further, as they integrate new channels, banks will need to re-imagine the roles of “legacy” banking channels, such as branches, ATMs and mail-based services. While these avenues of client interaction will not become obsolete anytime soon, the services that they provide will begin to evolve. For example, banks may opt to provide check deposits via mobile, with branches becoming solely sales and information centers.
It is important to note that the different types of gadgets will not replace client advisors, but rather offers an extension of their toolset, giving a new way of interacting with clients more effectively and efficiently.” In this way, branches and bank employees may begin to place more emphasis on shoring up existing customer relationships and securing new clients, with more standardized services maintained via digital channels.
For banks, developing new channels and ensuring integration among them is not only a necessity for survival in the digital era, but it can also boost their bottom line. This is particularly important in a space where changing regulations and increasing competition are putting pressure on banks to reduce transaction costs – with an adverse effect on profitability.
It is obvious that mobile banking can add billions of naira to the collective bottom line for banks. Banks should start thinking of services like mobile check deposits, this can both cut costs and add value for consumers – serving as a new source of revenue. If they choose not to adapt to the digital world, banks can still find ways to stay afloat, such as becoming a wholesale provider of banking services or seeking new partnerships. However, remaining a player in the retail banking space will require not only offering services via new channels, but making sure they put the customer first.
Digitization has the potential to change the traditional business model of banks, radically in some instances. The banks that are willing to embrace digital are likely to benefit in many ways. Digital banking implementations is going to change the banking sector in any case, whether or not banks are prepared for it or not. So, it is in their interest to do all that they can to adapt.