Digital banking offers unprecedented
opportunities both for banks as well as customers. It has provided banks
breadth and ease in delivering their products and services to customers. As for
customers, it has pushed service options and expectations to a new high. Given
the opportunity spectrum, it is no surprise that banks have invested heavily in
upgrading their digital preparedness. 2015 promises more investments in digital
banking.
A definition of digital banking will be of help
here. Obviously many definitions exist. Banking transactions and experience
through the internet and electronic devices - desktops, laptops, tablets and
mobile phones – structure our digital banking experience. This is a simple and
easy definition.
Digital banking is also the prime force that
has helped in proliferation of banking services to remote areas and brought
huge unbanked segments into the ambit of mainstream banking. Arguably, it has
the deepest transformational impact on any industry. Most important, it has
provided customers with the information they need at a time, place, format and
device of their choice. This has been a true empowerment.
Consulting companies and IT majors, as would be
expected, are deeply invested in the digital transformation initiatives at
banks. They have proffered channel integration/optimization as the central
pillar in enabling this transformation. Banks’ response, however, have been
mixed.
Channel integration/optimization, in short,
seeks to fine tune different digital channel touch points so that the customer
has a unified experience at the bank. Consequently, this synchronization or
optimization can help banks elevate customer experience by calibrating the
delivery of best in class products and services.
But the problem with this approach is that
every organization has to level up and offer top customer experience.
That is the minimum and ‘must have’ expectation today. Anything
less will jeopardize business and could potentially result in loss of
customers. The result is that all major banks have geared up and offer par or
exceed expectations in customer experience.
Further, channel integration/optimization is,
by no stretch of imagination, a disruptive innovation by itself. It is an
evolving standard or touchstone that every organization must meet to remain
competitive, albeit an attractive revenue generating opportunity via the
integration business. By definition it is glued to the physical architecture
and seeks to achieve operating efficiency or synchronization as its end result.
To that extent it may be handicapped and only obliquely impact profits.
There is, for instance, no room to incorporate
analytical insights and the consequent learning as the motive force in
reinvigorating banks business drivers. Hence it is no surprise that this
channel optimization has not greatly enthused banks.
