In comparison to other industries, retail banking has historically been relatively slow to pursue technological innovation. Banking executives generally tend to be cautious, focusing their efforts on developing financial products to maximize revenue, with innovation a distant second priority. This approach, coupled with the fact that bank operations are often mired in highly bureaucratic and multilayered processes, often means that banks are likewise not a favored target for software engineers and other pioneers in the digital field.
The advent of the COVID-19 pandemic, however, has forced a rapid shift in the banking industry’s lukewarm attitude toward innovation. Many retail banking processes have been migrated onto websites or dedicated mobile apps in compliance with social distancing restrictions. Many banks have thus also needed to explore more sophisticated core banking solutions to better serve the vast majority of people now banking digitally in lieu of visiting physical branches. Current research suggests that most customers would also prefer to continue along this digital trajectory when it comes to availing themselves of retail banking services.
Bank executives have since acknowledged the need for banks to embrace contemporary banking technology, as well as the numerous benefits that doing so can bring. Below are just a few pivotal ways that digital technologies can enhance the retail banking experience for banks and their customers alike:
More Efficient, Less Error-Prone Front-End Operations
Many industries around the world can stand to benefit significantly from automating as many of its processes as possible and reducing its dependency on manual labor, and banks have begun to innovate in much the same way when it comes to their retail banking products and services. Instead of physically visiting a branch and waiting for a teller to become available, for example, customers can save time by conducting routine transactions like withdrawals, deposits, or transfers remotely on their own, following clear text or audio prompts from the bank. These automated processes are likewise not bound by set working hours, and can instead be accessed anytime for maximum convenience.
Digital software can also seamlessly perform everyday servicing tasks such as collecting client documents and updating customer profiles to reflect changes of address and telephone numbers, added dependents, updated marital status, and the like. These tasks are normally supported by artificial intelligence technologies like voice bots and chatbots, which are programmed to receive set commands from the customer and respond accordingly.
On the whole, the right software can significantly reduce the amount of time needed for routine tasks from a matter of days to mere minutes, and these automated processes are also much less vulnerable to human error. Customer-facing personnel can then focus primarily on more complex operations requiring human interaction and personalized service. Examples of these include providing advisory services for investments, deciding on cases of fraudulent transactions and identity theft, and the like.
Improved Back-End Systems
Though it is at present more common and generally easier for banks to elevate their customer-facing operations with digital software, a number of helpful solutions also exist for the back office. Digitized workflows and resource planning programs, for example, are just two examples of software solutions that can help optimize back-end operations.
It’s likewise worthwhile for banks to pursue digital document management solutions and reduce their dependence on paper-based documentation. Back-end digitization helps consolidate, streamline, and simplify document storage, and it also allows users to search and retrieve all files efficiently. Having a unified, secure database for all documents will not only ensure smoother everyday operations but also enable the bank to furnish regulators with compliance-related data more easily when necessary. Lastly, high-end document management software is a reliable way to protect sensitive documents from security breaches.
More Comprehensive Customer Data Collection
Most financial experts agree that the future of retail banking rests on the bank’s ability to create positive, personalized, holistic customer experiences. Banks have been exhorted to innovate around this particular objective, focusing on making “people first” improvements that would benefit the customer over developing product silos and other factors. The goal is to develop products and systems that have been optimized with the needs, objectives, and financial practices of the modern customer in mind.
Traditional banks have historically collected only a limited amount of data on their customers, offering personnel minimal insight into what clients’ financial lives are like and what they might need. Many digital solutions exist, however, to facilitate efficient and personalized customer communications and enable the collection of more extensive client feedback. Regularly issuing digital surveys, for example, is one relatively simple means for banks to gain insight into customer needs and align these with the current product and service lineup.
Although the COVID-19 pandemic may have encouraged more banks the world over to pursue technological innovation more proactively, the benefits of doing so extend beyond coping with current challenges. Exploring digital solutions in retail banking is equally, if not more, necessary to prepare for a future in which banking is predominantly digital- and data-led. Willingness to innovate is crucial for banks to keep up optimal service and remain competitive in these rapidly changing times.
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