Shaken banks are ready to fight back
Battle for clients includes using artificial intelligence and ‘fin-tech’
COMPETITION for the digital customer of the future is on the rise. To compete, banks will need to transform themselves through strategic and digital enablement and will need to provide everyday solutions by playing a bigger role in the online lives of their clients.
This is an ongoing journey that will require continuously higher levels of innovation to stay relevant.
The battle for services will take place before, during and after a traditional banking transaction, as the expectations of the digital customer are increasing in tandem with digital product enhancements and bandwidth improvements.
The provision of more universal access to banking platforms will be crucial to success.
Banks that have been resting on their laurels are in for a rude awakening, as the pace of change is only getting faster.
According to the Accenture Technology Vision for Banking 2016 report, 85% of bankers expect the pace of technology change to increase rapidly or at an unprecedented rate in the banking industry over the next three years.
It is clear banks need more than the right technology — they need to harness that technology to enable the right people to do the right things in an adaptable workforce.
By shaping a highly productive relationship between people and machines, banks can create a more empowered workforce and better business outcomes.
Winning the battle for customers will entail an improved understanding of what really matters to customers; lowering costs; providing a more personalised and proactive customer service; creating a more vibrant and empowering working environment; creating internal business efficiencies; and improving the levels of customer convenience and security.
Deloitte’s recent mobile consumer survey — The Africa Cut 2015/2016 — identifies what may be needed to benefit from the disruptive forces besetting the banking sector.
The report says that, as African consumers live more and more “in the app”, there is room for multinationals to take centre stage with a localised app that would act as an ecosystem for life.
This would handle information, entertainment, communication, education, purchases and financial services, all in one place, and evolve its value through sophisticated customer and data analytics.
African multinationals will increasingly need to create business models around smartphone users and brace for the rise of data-centric phone users. In Africa, the significant majority of webpages rendered are directly onto a mobile device.
Does this mean banks will be swept up in the “fin-tech” revolution and potentially cease to exist? Not at all.
The fin-tech revolution — where software is used to provide financial services by non-banks — need not be seen as a threat.
Instead, fin-tech start-ups can be enablers that can assist us in increasing the penetration of traditional retail banking, among others.
Targeting the digital user of the future is where the major opportunities will be unlocked for banks.
Standard Bank is already seeing this and acting to take advantage of change and innovation.
Our ongoing adoption of innovative customer solutions, internal workflow change and a fervent focus on the African market have seen our mobile banking traffic grow 100% a year. Our strong footprint across Africa will continue to unlock opportunities for the provision of financial services.
We are, for example, fully aware that smartphone penetration in Africa is already at about 40% from almost zero seven years ago and continues to grow.
Our own approach to providing financial services solutions needs to become more flexible and innovative to meet the demands of the consumer of the future — demands that will call for increasingly digital and personalised interactions.
This will entail a rethink of the very culture of traditional banking. The insight in the Accenture report — that by shaping a highly productive relationship between people and machines banks can create a more empowered workforce and better business outcomes — is quite true.
According to the research, bank executives plan on using machine learning (79%) and embedded artificial intelligence solutions (80%) extensively. Their top target areas for more automation are: knowledge worker (91%), customer interaction/experience (90%) and IT (90%) tasks.
Those that win will evolve their corporate culture to empower people — customers, workers and partners — to accomplish more with technology and usher in the new business strategies that those technologies drive. For example, according to Deloitte, the ritual of checking the phone as one of the first and last things of the day appears to be collective across African markets. More than half of consumers across the region check their phones within five minutes after waking up and before going to bed.
It is imperative that we deliver value and enhanced user experiences — or miss the opportunity created when these billions of glances at smartphones take place every day.
Understanding the power and opportunity of consumer trends like this will shape the business and retail banking model of the future. Standard Bank is aggressively embracing these exciting developments.
We are quickly developing our capability to provide one front-door key to our clients to access all the channels within the bank.
Despite the challenges, the opportunities to be grasped are immense for those that adapt in time.
This is indeed the most exciting time to be in banking as we have such a great opportunity with these new technologies to make a real difference in Africa.
Africa smartphone penetration is at about 40% from almost zero seven years ago