The win-win opportunity in banks’ digital transformation strategy

Entersekt Editor|11 October 2018
The win-win opportunity in banks’ digital transformation strategy

Digital transformation has become a strategic focus area for banks – one that many experts view as critical for future success. Digital banking can mean greater cost savings and more efficiency, but it can also be a way for banks to engage with customers. It’s no secret that engaged customers tend to buy more products, have higher account balances, and generate more profits.

Today, the challenge is for banks to offer their customers digital experiences. It’s no longer enough to merely enable digital transactions – a host of competitors from within and beyond the traditional financial services sector provide consumers with lists of options. For banks to remain relevant, it’s becoming increasingly important to offer compelling products and services that keep customers coming back.

Beta-testing

Innovative financial institutions are engaging customers by inviting them to participate in pilots of new digital features. USAA, for example, has launched USAA Labs, a digital workshop for which members can sign up online or via mobile app. Similarly, Citi has a beta-testing community called Canvas where customers can try out tools and features, while HSBC tested its open banking initiative with a beta pilot among 10,000 UK customers.

These programs gather invaluable input, which many customers enjoy giving. Customers feel like they are working in partnership with their bank and that their bank values their feedback, which promotes stickiness.

Gamification

Another way in which some FIs are digitally engaging customers is through gamification, which persuades customers to perform repeating behaviors or to modify their behavior by offering them rewards, points, or prizes. For example, Standard Chartered Bank Malaysia was able to boost credit card usage and customer loyalty through its “Shake and Win” campaign. Each time a customer made a card transaction, they earned a chance to win a daily prize or cashback. This campaign raised the bank’s year-on-year transaction volumes by 12 percent, and yearly spend by 8 percent.

India’s ICICI Bank has also successfully undertaken several gaming initiatives. As part of its digital campaign #LiveWithoutCash, for example, the bank launched “Crack the Maze,” which uses gamification to educate customers about security when using credit and debit cards. Aiming to improve customer retention and online customer experience, Spain’s BBVA awarded customers points for interacting on the bank’s website. The points could be used to enter lucky draws to win prizes such as tickets to football games.

Remote enrollment

According to analyst firm Gartner, account opening is the most critical process for banks working to both acquire new customers and increase engagement with their current customers. But the account-opening process is often overly complicated and cumbersome for customers. There’s nothing “digital”, “empowering”, or “convenient” about physically standing in a queue to register for a new product.

Many banks are seeing this as an opportunity for innovation, making remote enrollment part of a superior customer journey. For digital-only banks, offering remote enrollment is, of course, a must. Traditional banks all over the world are increasingly providing this service, too, with many promising their new customers that the account will be up and ready for banking within minutes.

Mobilizing the Internet of Things

The Internet of Things have presented banks with an opportunity to offer customers more personal experiences, bringing financial services into their daily digital lives. Apart from enabling payments from wearable devices like smart watches, some banks are allowing customers to use their virtual assistants to carry out simple banking tasks. U.S. Bank, for example, allows its customers to make payments and check account balances, transaction histories, and payment due dates with help from Alexa. Capital One, American Express, Garanti Bank, USAA, Santander, National Australia Bank, and others are doing likewise. Barclays lets mobile banking customers make a payment by asking Siri, and Starling Bank in the UK is integrating its API with the Google Home device.

Beyond checks and balances

Of course, all of these initiatives require a great deal of due diligence before launch, and just because everyone can win in a customer-first approach to digital transformation, doesn’t mean that there are no rules. Banks have to prioritize security, in terms of their own systems as well as their customers’ data. And then there are the compliance requirements that often lead to extended timelines, legacy systems that complicate matters, and the changing demands of consumers.

But banks dedicated to offering their customers engaging digital experiences are set for success, and in a game where the rules and the competitors change frequently, having the best possible team on your side is a winning strategy. At Entersekt, we’ve believed in the possibilities that a mobile-first approach to banking can open up – for banks and their end-users – from day one. This email address is being protected from spambots. You need JavaScript enabled to view it. today to learn more about how our clients and their end-users have benefited from our dedication to secure digital enablement.

About the author

Entersekt Editor

Entersekt Editor

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Entersekt is an international software development company based just outside of Cape Town, South Africa.

We are leaders in authentication, app security, and payments enablement technology, offering a highly scalable solution set with a track record of success across multiple continents.