Brick & Mortar Vs Digital Banking – Striking a Balance - Firstsource Solutions - ContactCenterWorld.com Blog
Banks are changing the way they conduct business as their relationship with customers rapidly evolves with more and more interactions taking place online. According to a Forrester report, mobile banking is the biggest industry innovation in a century. “The longer we spend researching mobile banking, the more convinced I become that mobile banking is the most important innovation, or cluster of innovations, in retail banking in years, arguably in a century,” says Ben Ensor, author of the report.
These are not just hollow words. Ensor’s research backs it up with substantial findings: In developing economies that have poor brick-and-mortar infrastructure, mobile banking has the potential to replace branch networks, “bringing millions of people into the banking system for the first time.” On the other hand, in advanced economies, banks that fail to develop mobile banking technology risk losing their retail payment systems due to ‘digital disruption’ by more savvy competitors.
Setting the pace
This growth is not just limited to mobile banking, but to all forms of virtual banking. The proliferation of smartphones and tablets, and the rising consumer expectations have made it imperative that banks provide more than just basic functionality like product information, account balances and ATMs locators online. Here are some statistics that set the stage for the transformational role of virtual banking:
- In 2013 smartphone sales surpassed feature phone sales globally for the first time: 1.8bn phones were sold, of which 968 million were smartphones. (Source: Gartner, February 2014)
- More than 50% of the 5,800 commercial banks in the US offer some form of mobile banking
- 51% of American adults bank online while 32% use some form of mobile banking
Yet another research by Gartner corroborates the explosive growth of e- and m-banking. The study found that the evolution of the Internet has raised questions about the continued viability of brick-and-mortar establishments in retailing and financial services. For many financial institutions, the future is proving to be extremely difficult and challenging as traditional models no longer apply to many of their customers or markets.
Digital banking is trending now
So what exactly is clinching the deal for digital banking? It is not just convenient and available 24×7, it is also extremely low on cost-to-serve when compared with an actual visit to the branch. Experience in the Scandinavian region, considered to be the most advanced e-banking area in the world, confirms that the future is in a combination of ‘clicks and mortar’ banking. Customers want full service banking via a number of delivery channels including online.
Digital banking teams need to drive e-banking adoption by listening to their customers’ needs, focusing on helping them achieve their goals, integrating mobile banking into a broader multichannel strategy, choosing technologies carefully, and using education and security guarantees.
Striking the right balance
Given that the customer is today calling the shots of any business relationship, financial institutions must adapt their engagements and respond to customer needs more effectively while remaining connected with them. Ensuring regulatory compliance and maintaining profitability is just as critical. The widespread adoption of digital banking by the ‘always on’ customer means that customer engagement has gone beyond the traditional modes of personal and phone interaction.
Digitisation also makes real the threat of losing personal connect with the customer – the very basis on which financial institutions are built. And while technology is constantly evolving, banks need to strike a balance between traditional customer service and the digital connect to remain relevant to today’s consumer.
Publish Date: October 14, 2015 5:00 AM
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