If you are a lender, geeky, representative or most importantly a customer in BFSI Segment, I would certainly take it for given you must have heard the new buzz word "Digital Banking". In my circle, I did conversation with numerous individuals and also remarkably, no two individuals appear to view this in very same fashion - well, this is kind of overestimation, however you get the picture! This made me take a time out and also think what this might suggest to a person like me who is an insider in the industry, to address if a coworker, good friend, or someone at my box asks me regarding this. As a real CrossFit professional athlete I adhere to at the very least the very first regulation - inform every person you come across regarding CrossFit.
The factor I bring up CrossFit is not just because of my attraction or, also obsession. CrossFit is a little complex as well as intimidating to those inexperienced, but to put it merely it is stamina and conditioning program, which maximizes health and fitness. CrossFit specifies health and fitness itself in regards to 10 elements - Cardiovascular Endurance, Endurance, Versatility, Strength, Power, Rate, Agility, Coordination, Precision, Equilibrium. Yet, normally if you ask any one of your good friends what is physical fitness, you could obtain multiple feedbacks. E.g. a runner will say capacity to run half-marathon, or a weight lifter could state deadlift of at the very least 1.5 x body weight, or a guy into yoga might state doing 108 Suryanamaskaras. Well, each of them may be right in their own method. Your definition of health and fitness may be doing all of those, or you can just state I am healthy enough if I am able to do my 9-to-5 work without taking any type of sick leave in an appraisal cycle.
On the very same lines, financial institutions could translate Digital Financial in their very own terms as well as likewise, individuals like you and also me will certainly have formed some viewpoint based upon our very document verification ai own exposure.
Over the years, financial institutions of all sizes and shapes optimized a great deal by adjusting to IT/ ITES (IT Allowed Solutions) as well as they have accomplished different degrees of success. Nevertheless, due to absence of focused and longterm method, production of disjoined systems, swiftly changing company as well as operating circumstances, etc, the intended goals may not have actually been completely understood. A few of those "failed" campaigns could have been driven by the institution's desire to be an early adaptor of a modern technology or fad (betting on a wrong horse). As a matter of fact, we may lose a massive opportunity, if we do not acknowledge as well as bet on a winning equine. So, the trick is banking on the ideal horse, at a correct time - i.e., when the odds are low. Typically, sectors utilize what is called a Buzz Cycle to examine a new technology or trend. If you are interested to comprehend what is a "hype cycle", please see Gartner's method. I will attempt to string together several of the vital elements of Digital Banking, as unlike most of the buzzwords, it is neither a single service nor a innovation.
Just around the time (2008-10) I invested about a year plus in Brussels, 3 huge financial institutions (Fortis, Dexia and KBC) which constantly encountered as very threat averse bankers from the BeNeLux area, started facing significant stress as well as their value deteriorated dramatically as well as triggered warmed arguments in the area - who thought their cash is constantly secure with the financial institutions (either as a depositor or share holder). What really took place there, is extremely complicated. Secret variables being, huge sovereign financial debt floating in between 84 to 99% of GDP, lack of Government for 533 days, etc. These caused liquidity issues. If you include in this other upheavals in the financial sector internationally, it is simple to understand that the " trust fund" within the system was under threat. Exactly how would we develop count on? By being transparent. Customers need (not desire!) openness in the whole system. Younger the consumer base, that require really felt is a lot more severe. This, when you look from the transforming customer experience and expectations from retail market ( Amazon.com, Flipkart), transportation (Uber, Ola), food industry (Zomato, FoodPanda, ZaptheQ), you recognize where the banking industry is. Customers have reset the expectations in regards to worth, experience, as well as choices. The Trick takeaway for the lender - Customer Experience - rich, uniform, mobile (anywhere), safe and secure, boosted worth.
Lots of people I have communicated with lately on this subject, suggested Internet Banking or Mobile Financial as Digital. Yes, this is only the beginning of what could be Digital Financial. Most likely, they cover earlier set of customer assumptions. Moving on, could we see a day soon, where there is no paper in any one of the banking transactions? When I say paper, I am not simply describing money! Couple of things which are currently in practice in couple of financial institutions and getting momentum across are - digitizing processes within the financial institution (like client on-boarding, loan application), cheque truncation systems which allows you to take a photo of the cheque on your mobile as well as send out to your bank, etc - there by bringing performance in decisionmaking, ability to tailor processes to certain consumer needs, conserve some unneeded journeys to the branch, and so on. This might indicate simply put, executing document/ image management systems, service process administration and surveillance systems, integrating these elements within the existing IT services. The Trick - digitizing internal processes.
Social Media in the last couple of years have actually brought largest impact throughout boundaries - be it, Tahrir Square revolution, Ice Container Obstacle, which mobile to buy, just how we order and spend for lunch or determining a fine eating location and also going Dutch while sharing the bill. Social network is already bring disruptions in terms of which bank to trust, what they can anticipate from a financial institution in regards to solutions, lend a voice to their discontentment. Which consequently indicates, banks need to get on the exact same Social media site paying attention to their clients, marketing their services as well as also eventually, drawing in new clients, maintaining the consumers and even more significantly, ending up being "The Goto Financial institution" if the client has several accounts. As an instance, what might not have been expected couple of years back, in Kenya, one of our respected customer's Twitter manage (@ChaseBankKenya) uses Twitter to link, launch and share CSR tasks, and also address consumers' inquiries as well as problems extremely successfully. That is, The Reach factor.
An additional silent thing happening behind the walls in a bank is called Data Analytics or Big Data. These churn out unprecedented insights into customer behavior and preferences, driving extremely focused strategies. These also help customers to understand their spend analysis, plan their budgets, financial goal management etc
. Apart from these key components, there are several others which could make the bank more "digital" - chat and video discussion facilities to bring bank closer to the customer when he/she needs it, or educating customers through online tutorials like financial literacy, tax planning, etc, integrating various solutions and systems in the bank to reduce data replication and redundancy and helping the bank make more Straight Through Processing systems there by reducing errors, cost of operations, and increasing efficiency in the entire system. Banks could significantly increase seamless data exchange with others partners like regulatory bodies, clients, government bodies thus making entire process much more transparent and efficient.
Finally, the big question is what should be achieved from the big task list to call a bank "Digital Bank"? Just like in fitness, there is no single solution or the right solution. Each bank has to define its own strategy, execution plan to reach the goal of customer delight, operation efficiency, and overall share holders' enhanced value.
With our sharp focus on Core Banking Solutions, and wide range of experiences in consulting, implementation, testing, integrating several solutions at various banks across the globe, we at Bfsi consulting will be glad to engage with you or your team to help realize some of these goals.
