02. 13. 2018
Banks must use the digital tools now being used against them – W.UP Digital Banking Weekly
Financial institutions can win back some of the business they lose to digital disruptors by using the right technology. Also, they can learn from the retail industry and take the magical number of 60-120 seconds into consideration when developing digital onboarding structures.
Disruptors target profitable bits of banking
Attackers – whether fintechs or platform players — favor incumbent banks’ choicest businesses, namely fee-based offerings such as transactions and payments as well as asset management, according to a new report by McKinsey. Currently, these produce 47% of banking revenues but an outsized 65% of profits and a return on equity (ROE) of 20 percent.
Banks could win back some of that erosion by better deploying core technologies now being used against them: “industrializing” operations with digital automation or using new digital-marketing tools and analytics more effectively.
Is shopping for clothes a far cry from banking?
The retail industry has seen seismic changes in terms of how people shop, compare and receive goods and banks are no longer just being compared to other banks but also to Apple, Google or Amazon, Bill Safran, Vizolution’s CEO told the Digital Journal.
“If people can buy new clothes and have them delivered hours later, why can’t they get a loan and have it in their bank account within hours?,” he asked. More is being spent on customer experience by organizations, but this is often not translated into improved customer satisfaction, Safran reckons.
Unicredit launches iPhone-only buddybank with AI
Italy’s Unicredit is trying to give banking’s staid image a makeover and make it “cool” through the launch of a mobile-only subsidiary called buddybank, Finextra has reported. Signups will be restrained by the bank’s decision to ignore Android.
The “buddy” aspect of the service is a 24/7 concierge service. For €9.90 a month, the service will use AI and real people to help with everyday tasks over chat. In a similar move, JPMorgan Chase recently unveiled Finn, joining the likes of Santander’s Openbank and Bank Leumi’s Pepper.
Digital onboarding: 120 seconds is the magic number
As many as 4 in 10 consumers have at some point in their journey into online banking found the process frustrating enough to give up, pymnts.com reported. And the frustration level has grown: 45% of consumers walked away from the process in the past year, up from 26% a year earlier.
There is a limited window of opportunity of about 60 to 120 seconds to complete the transaction without adverse abandonment. So traditional banks must look to streamline and offer a frictionless mobile experience to their user base.