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Five strategies to make banks digitally competitive

Five strategies to make banks digitally competitive

Banks are currently facing increased competition from technology driven startups with their customer friendly interfaces and marketing that plays on the consumer’s distrust of large established organizations. What can banks do to improve their competitive position in today’s evolving financial services marketplace? Technology and data can position a bank for success only if they are combined with a changing internal culture and a focus on the customer.

Banks should implement these five strategies in order to succeed:

1) Put Your Customer First.

In setting digital strategy, it’s essential to start from the customer’s viewpoint and experience and work backward. This approach sets you apart from the traditional ways of starting with the banking channels, and then making their way to the customer. Customer segmentation is a core consideration in setting strategy and involves looking at the distinct experiences of customers and prospects. It also takes into consideration differing expectations among various customer groups. Digital platforms can help banks better tailor individual customer experiences.

2) Change internal culture toward customer experience

One of the biggest challenge banks face internally when implementing new digital technology is political. The people managing branches, sales and transactions may see new digital improvements as a threat.

Internally, teams need to buy-in that digital can complement traditional channels by improving customer targeting and experience. Rebuilding an organization’s internal culture to focus around “customer experience” instead of the traditional channels can be complex. Many businesses have appointed “customer experience officers” to overcome internal barriers and have also started to better align incentives with customer experience.

3) Deploy needed technology

Digital banking applications need to be refreshed. In order to provide a seamless customer experience, these applications will require a redesign and reconfiguration as well as upgrades to the bank’s IT. Everything from the customer interface to back – end systems needs an upgrade. Tech providers are approaching banks’ needs by offering flexible user interface (UI) which banks can customize. They are also providing ceding ownership of the full UI to the bank, which brings it in house and manages it.

4) Make the most of customer data

The daily rush to keep up with competitors and keep the institution running can prevent banks from overlooking valuable customer data sources. Focus groups and in-person interviews are a great start to gather data on customer needs and attitudes, but are limited by size and cost.

Banks can improve their customer insights using online analytics to understand customer behaviour. This data, coupled with tools such as A/B testing can be effective in designing, testing and evaluating products, services and marketing programs.

5) Putting it all together

Customers are raising their expectations and competition is growing from both traditional and non-traditional rivals. This is making it more compelling for banks to consider how they can create a customer experience that is seamless and flexible both within their branch as well as in the digital environment.

Banks can start by building a strategy that is based on the customer’s point of view by gathering insights from clients and then fostering an internal culture that brings together the necessary resources to implement the strategy. Upgrading technology platforms and harnessing data is essential for a better customer experience and will lay the foundation for a lasting competitive advantage.

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