Recalibrating banking for the customer of the ‘New Normal’

Have you ever wondered about the driving force behind the digital revolution in the banking space? Is it the rapid rise of digital technologies? Or the changes in banking regulatory guidelines? Or the emergence of new-age challenger banks and neo-payment options?

The answer is simple—the customer has changed. While all of the above factors have contributed significantly to digital initiatives, catering to changing customer expectations ranks highest. Unlike other industries, for banks and financial services, customer experience is considered the most powerful differentiator.

Catering to the heightened expectations of new-age customers

By 2025, millennials will comprise three-quarters of the global workforce.[1] As one of the most tech-savvy generational cohorts, millennials are accustomed to rapid, personalized experiences and expect everything to be available at their fingertips and across multiple channels. They expect their banks to be proactive in building personalization and contextuality into customer timelines and use insight to offer intuitive experiences. Additionally, they also attach importance to the levels of trust and security as they fully understand and accept that their data is being collected.

Accelerating digitization needs due to the great reset

While most traditional banks had well charted out paths for their digital transformation journeys, the recent unexpected ‘black swan event’ left financial gurus dumbfounded. Government instituted lockdowns and social distancing measures saw an increase in consumers choosing online payments. In a study on the impact of COVID-19 on digital payments in India, nearly one-third or 33% said that they had made digital payments more than before.[2] Banks and financial institutions in turn are quickly recalibrating their digital strategies and intensifying the drive towards digitization by unlocking new paths to serve the evolving needs of their customers in a post-pandemic world. As an example, SME banking vertical for the new banks in the market were pivoted to digital technologies to overcome the challenges posed by the pandemic and ensure operational efficiency.

When a new bank in the market, North East Small Finance Bank (NESFB) required a digital contactless solution for its SME banking vertical, Clayfin quickly stepped in. An effective solution was implemented within a short time span of four months, completed entirely through remote collaboration. The initiative went on to win a special award for ‘Delivery Excellence during COVID-19’ at the ET BFSI Innovation Tribe 2020 Virtual Summit & Awards held on November 24, 2020.

Trending digital banking initiatives bring greater customer connect

Several digital banking initiatives are rising as solutions to the challenges brought on by the need for augmenting the customer experience journey and recalibrating for the new normal.

For instance, banks are increasingly leveraging Digital Onboarding to ensure business continuity and connected customer experience. The popularity of Digital Onboarding rocketed with the global lockdown as physical branches were not operational. Digital Onboarding helped banks set up virtual platforms to establish a digitized connection for both existing and potential customers and enabled the creation of a frictionless and engaging end-to-end onboarding process. Banks can quickly turn prospects into customers by leveraging innovative features such as easy-to-access user interfaces, quick product discovery and biometric capabilities that capture accurate customer data and makes the e-KYC process more efficient.

Personal Finance Management (PFM) is another specialized digital tool that helps customers in their day-to-day financial journey by offering a personalized financial lifestyle management solution. According to Statista, the total transaction value in the Personal Finance segment has been projected to grow to a total amount of US$2,639,751m by 2024.^[3] Built with innovative features like spend analysis and goal-based savings customers gain a 360° view of their post-pandemic financial health while managing their future savings. An innovative Personal Finance Management (PFM) solution built by Clayfin for Federal Bank’s mobile banking channel has significantly helped the banks’ customers improve their personal financial discipline. This successful integration bagged awards in two categories—‘Excellence in Customer Experience Management’ and ‘Excellence in Fintech’—at the ET BFSI Innovation Tribe 2020 Virtual Summit & Awards.

Along with deploying specific customer-centric tools, banks are increasingly adopting a coherent and agile omnichannel strategy to address the evolving needs of the millennial customer. With fluid processes that connect across multiple touchpoints like Chatbot Banking, Wearable Banking, Mobile Banking and Internet Banking, customers not just have the convenience, but also the option to connect via a channel that suits them best.

Understanding your customer at the granular level and providing the right digital tools is the key to driving customer experience in the ‘new normal’.

[1] https://www.catalyst.org/research/generations-demographic-trends-in-population-and-workforce/

[2] https://www.statista.com/statistics/1111082/india-coronavirus-impact-on-digital-payment-usage/

^[3] https://www.statista.com/outlook/298/100/personal-finance/worldwide