The global banking industry’s rush to digitisation can lead to an over-reach, with clients feeling overwhelmed by features and banks undertaking digital projects ‘in the dark’ with no concrete strategy.
According to a white paper, released on Monday, titled Successful Digital Banking: Aligning business strategy with technology, the move to digitising bank services can have a significant impact on the client experience. The research, undertaken by Avaloq and Mimacom, looks predominantly at European banks but the lessons are universal.
The paper examines how banks initially felt unchallenged by new digital entrants until Apple and Google entered the financial market, which has led to a rush to digitisation. While digitisation has been seen as the ultimate goal for banks, the paper’s findings actually reveal that many features of digital banking are not accepted by clients and do not provide a significant advantage for the bank itself.
And indeed the upheaval caused by a myriad of digital disrupters can be exacerbated if banks haphazardly rush into building features which are of little or no use to customers.
“This digital rush has led to some banks failing to reap the benefits of digitisation,” said Thibaut Jacquet-Lagreze, head of group marketing at the Avaloq group. “Our message to banks is always consistent: focus on your clients and their needs.
“Digitisation always requires a strategy; without one, banks are operating blindly and have no guarantee for success. Getting the balancing act right in terms of integrating services and providing what clients want through an omni-channel approach will lead to positive client experiences.
“Another important aspect for success is being agile in the way you design, deliver and manage projects, as this helps to deliver on user expectations.”
The research acknowledged that the reaction of some banks has been to create a deluge of features to digitise their customer interfaces – looking to appear digital to increase the frequency of contacts on digital touchpoints between themselves and their customers.
However, many of those features and interactions are neither accepted by customers, nor do they provide a significant advantage for the bank. In the end many features are not used and the significant upfront investment provides little or no return.
The paper also looked at the knock-on effect of the industry’s digitisation, with the blurring of lines between traditional client roles in portfolio management and advisory and relationship management, which has triggered the need for adjustable business workflows.
A study within the paper also puts the spotlight on clients’ views of robo-advisors. Bank clients were given the possibility to define various investment goals, such as buying a car in five years, a house in ten or retiring at the age of 60.
The tool gave different investment offers based on these goals and the current financial situation. However, despite the fact that bank clients enjoyed using the tool, hardly anyone wanted to use the tool in isolation, preferring instead to use it to prepare for meetings with their financial advisor.
“There is something digitisation has not changed: clients still expect service,” said Mathias Gläser, partner at Mimacom. “It was really clear in the paper that all services should be designed as seamless processes with the ability to provide a personalised client experience.
“However, this requires an open architecture to enable personal advisors and wealth managers to highlight clear factors of differentiation when delivering services tailored to meet the needs and wants of their clients.
“Ideally, these should be delivered by a collaborative ecosystem to provide a holistic service. In line with client feedback, new digital touchpoints and features should be built and integrated with existing touchpoints, such as branches and call centre services in order to provide the great client experience they are looking for.”