• Technology providers focus on processing low value transactions such as payments, while banks focus on relationship driven transactions
• Data analytics and artificial intelligence are becoming increasingly important for banks that want to compete effectively
• Retail banking leaders need to start with the customer and use data to deliver better services

Start with the customer, and don’t end there

The big question banks need to answer as they go about mapping their digital journey is knowing what customers want. The challenge, though, is that customers themselves often don’t know what they need.

Most banks start their digital transformation by trying to force digital on customers rather than listening to what customers want. Instead, banks need to figure out what customers need, regardless of whether they are 50 or 15 years old and design transformation around the customer experience. Customers are at different stages of development, so it’s important to understand segments of customers through attitudes and needs rather than just demographics. Once banks know what customers want, they can then decide whether to deliver solutions themselves or use partnerships.

One bank that has done especially well on digitisation is Kakao bank in Korea, which acquired 5.2 million customers within nine months after it launched. The primary reason for its success is that the onboarding technology is incredibly frictionless.

While Kakao bank does well, digital adoption is strongest overall in China. Consumers there focus on using a wallet from Alipay or WeChat, however, rather than on banks. Indeed, a study by The Asian Banker showed that Chinese consumers do not see Chinese banks as relevant brands.

Looking at technology vendors also provides insights on how to become more digital. Facebook, for instance, has 2.16 billion daily active users globally and simply the network effect...

Categories:

Keywords:Technology, Digital Banking, Legacy Banks, Digital Transformation, Data

• Technology providers focus on processing low value transactions such as payments, while banks focus on relationship driven transactions
• Data analytics and artificial intelligence are becoming increasingly important for banks that want to compete effectively
• Retail banking leaders need to start with the customer and use data to deliver better services

Start with the customer, and don’t end there

The big question banks need to answer as they go about mapping their digital journey is knowing what customers want. The challenge, though, is that customers themselves often don’t know what they need.

Most banks start their digital transformation by trying to force digital on customers rather than listening to what customers want. Instead, banks need to figure out what customers need, regardless of whether they are 50 or 15 years old and design transformation around the customer experience. Customers are at different stages of development, so it’s important to understand segments of customers through attitudes and needs rather than just demographics. Once banks know what customers want, they can then decide whether to deliver solutions themselves or use partnerships.

One bank that has done especially well on digitisation is Kakao bank in Korea, which acquired 5.2 million customers within nine months after it launched. The primary reason for its success is that the onboarding technology is incredibly frictionless.

While Kakao bank does well, digital adoption is strongest overall in China. Consumers there focus on using a wallet from Alipay or WeChat, however, rather than on banks. Indeed, a study by The Asian Banker showed that Chinese consumers do not see Chinese banks as relevant brands.

Looking at technology vendors also provides insights on how to become more digital. Facebook, for instance, has 2.16 billion daily active users globally and simply the network effect...

Categories:

Keywords:Technology, Digital Banking, Legacy Banks, Digital Transformation, Data