Bank’s profitability, traditionally, was always supported by cutting costs and measuring efficiency. This strategy does work to a certain degree, however, nowadays it seems to be not enough for future growth. We talked a lot about the digital disruption of the banking industry, and how fintechs are gaining more competitive advantage over traditional banks, but being aware of disruptive changes in the industry is only a small part of the journey banks have to take. Banks need a better understanding of transformations and trends that impact the industry. So today, we collected the ones we find most important:
Unsatisfied digital customers
As mentioned above, digital disruption is nothing new. Consumers switch to online (neo) banking. While at first, it was more of a younger generation’s trend, today digitalization has touched on every customer segment. While digital use is going up, customer satisfaction is not improving. Going digital requires banks to create an omnichannel experience for users, providing seamless capabilities. Inviting a user to a bank branch in order to complete their loan request will only result in a lost customer.
Open banking creates opportunities
Even without a digital team or effective online solutions, traditional financial services still have an opportunity to expand beyond their area of expertise. There is a promising trend for banks to gain profits from more than only financial services. A way for traditional banks to do so is to provide open banking services for their customers: enabling them to use their bank for healthcare, retail, and more. The easiest way for banks to implement this into their processes is to partner up with organizations that provide open- or embedded banking services.
Blurry future for bankers
All disruptive trends mentioned above and the lack of banks having digital-savvy workers means that most financial institutions are still not ready for the future trend of all-online. This pushes financial institutions to reconsider their workforce, which of course creates an outrage among bank employees. Sadly, there is nothing that can be done about the fast-changing digital environment. Future bankers will be required to have not only management skills but being able to perform more advanced technical tasks. Solutions perhaps could be to develop training for current employees, but the cost of it is still under concern.
These trends, however, do not only refer to the banking industry. Companies of all sizes and services have to be aware of the challenges of the digital future. The sooner implementation of the modern solution will start, the more advantage over rivals a company will gain.
