Rising Customer Expectations

In recent years, the banking, financial services, and insurance (BFSI) sector has seen a rapid shift towards digitalisation driven by the increasing demand for digital banking services and the adoption of fintech and e-wallets. The COVID-19 pandemic has only accelerated this transition, as customers increasingly demand contactless and convenient banking services. Today’s customers want to bank anywhere, any time and on any device.

According to McKinsey’s Personal Financial Services Survey, the share of consumers in Asia-Pacific actively using digital banking has increased significantly, reaching 88 percent in emerging markets and remaining stable at approximately 90 percent in developed markets. 

However, the digital journey stands broken. 63 percent of customers abandon digital bank onboarding midway. Despite huge investments, digital services consumption is inadequate. Going beyond digital sign up and focusing on the entire onboarding and originations journey. Customers must be offered personalised and contextual advice and guidance whenever needed.

Digital adoption platforms (DAPs) can help bankers analyse customer journeys, drop-off points and provide them with the best advice and guidance that suits their needs and circumstances.

More than just Front-ends

Traditional banks are facing a major challenge in keeping up with the rapid digitization pace adopted by digital banking platforms. A recent study by S&P Global highlights that Indian banks are only allocating approximately 2 percent of their annual revenue towards technology, compared to global counterparts who are investing up to 10 percent in the same. This disparity in investment is further exacerbated by the fact that traditional banks tend to focus primarily on front end enhancements, such as user interface and user experience, rather than investing in the technology powering their back-end services.

As a result of this trend, traditional banks are struggling to compete with digital banking platforms, which offer personalised and seamless banking experiences to their customers. By contrast, traditional banks are unable to provide the same level of convenience and flexibility, given their outdated technological infrastructure. This inability to keep pace with digital banking platforms has caused traditional banks to lose market share, as customers increasingly turn to these platforms for their banking needs.

In order to remain competitive in the face of this challenge, traditional banks will need to invest more heavily in technology and revamp their back-end services to improve the overall banking experience for their customers. Failure to do so may result in further erosion of market share and revenue for these banks.

DAP enables FIs to increase customer visibility across lines of business, create customer-centric experiences and remove siloed systems from the organisation.

Building harmony between people, process, and technologies

Another challenge is a lack of digital literacy and need for infrastructural development in certain regions, which makes it challenging for traditional banks to adopt digital transformation initiatives. Workforce training on the usage of new digital tools and systems is also necessary to enable a smooth transition to digital banking. And there’s also adherence to compliance & regulatory requirements and mitigate risk when it comes to cybersecurity & security threats.

To overcome these challenges, traditional banks need to adopt DAP solutions that can help them achieve their digital transformation goals. DAPs can provide user-friendly interfaces and local language support, which play a crucial role in addressing the challenges of digital literacy and digital infrastructural challenges. DAP solutions can also provide easy integration with legacy systems, simplifying the adoption of new digital technologies. Additionally, DAPs can provide data visualisation tools, analytics capabilities, and data security measures, making it easier for banks to manage and protect customer data.

Enhancing customer experience by enabling digital self-service

DAP solutions can also help meet customer expectations through user-friendly digital interfaces, personalised recommendations, and other online services. These solutions can provide contextual and convenient support to employees through training on the usage of new digital tools and systems. Moreover, DAP solutions can provide real-time monitoring, threat intelligence, and incident response capabilities, helping identify and respond to cyber-threats efficiently and effectively. 

One example of how DAP solutions can improve customer experience is the ICICI Bank's Corporate Internet Banking (CIB) platform success story. ICICI Bank's Corporate Internet Banking (CIB) platform faced the challenge of accelerating customer onboarding and driving higher engagement to make new customers profitable faster. To overcome this challenge, ICICI Bank implemented a DAP solution that provided training content through self-help, task lists, and smart tips to its customers. The DAP solution also offered contextual help to CIB users in various scenarios, such as managing passwords and user IDs, adding beneficiaries, and making a wide variety of payments. Overall, ICICI Bank witnessed positive feedback from users, with the Net Promoter Score improving by 3-5 basis points, high marks for customer support, early user familiarity, and a 50 percent reduction in queries about site navigation

Adoption Matters 

The Indian government has also taken several initiatives to facilitate digital transformation in the BFSI sector. For instance, the Digidhan Abhiyaan and PM Modi’s allocation of 75 Digital Banking Units have boosted the digitisation story with Indians transitioning to digital banking and services. These initiatives have encouraged the adoption of digital banking and fintech solutions, enabling traditional banks to keep pace with digital banking platforms.

In conclusion, the BFSI sector has undergone a significant shift towards digitalisation in recent years. To match the digitisation pace adopted by digital banking platforms, traditional banks need to adopt digital transformation initiatives like DAP solutions to survive in a highly competitive market.

DAP solutions can help address the challenges of digital literacy and digital infrastructural challenges, provide easy integration with legacy systems, and help manage and protect customer data. Moreover, these solutions can meet customer expectations through user-friendly digital interfaces and personalised recommendations, provide contextual and convenient support to employees through training, and help identify and respond to cyber-threats.

( Khadim Batti is the CEO and Co-founder of Whatfix)