Digital transformation has proven a bumpy path for the retail banks. Faced with the constantly evolving demands of the modern consumer and increasing disruption from rapidly emerging financial technologies (fintech), traditional banks are under more pressure than ever to adapt and innovate. It’s now time for banks to redefine the value they offer to customers and, chances are, that will come with an overarching necessity to implement new technologies.
#1. Empower Safe & Secure Social Media Communication
According to a study carried out by the ABA, almost half of bankers agree that customers will rely on social media as their primary method of communication with banks within the next five years. With the vast reaches of platforms like Facebook and Twitter, investments in these channels only continues to grow. However, it’s also alarmingly easy for someone to post something that’s misguided at best and a regulatory violation at worst.
Obviously, you can’t afford to leave your social channels open to malicious intrusions or staff negligence. That’s why all communications must go through a centralized monitoring system that automatically detects violations of corporate policy and mitigates them before they enter the wild. In an industry where trust is everything, the importance of implementing effective yet user-friendly controls over social communications cannot be overstated.
#2. Evolve Away from Legacy Applications
The lack of technological competence in many banks is alarming, yet consumers want more than ever to enjoy an experience that traditional banking systems simply can’t offer. Many big banking systems, for example, are built using the COBOL programming language, which has been around for over 60 years! These legacy systems simply weren’t designed for today’s connected digital environment, making back-office technology in desperate need of a refresh.
Contrary to popular belief, the capabilities of back-office technology have a direct influence on customer satisfaction to the extent one can think of it as the new front office. Today, banks should be setting their sights on integrated cloud infrastructures and modern communication channels. Moreover, thanks to the availability of centralized platforms for monitoring security and compliance, newer technology is inherently safer and more in line with compliance requirements.
#3. Address Security Issues at Scale
There was a time when IT security was relatively easy. You’d simply install some antivirus software and be done with it. That’s certainly not the case anymore when the typical banking environment has tens or even hundreds of thousands of networked computers and other connected devices in its portfolio. Add social, cloud and mobile channels into the mix, and the potential attack surface expands exponentially. How do you maintain security over such massive scales?
Fortunately, security and compliance solutions have also managed to scale with the rest of technology. No matter how large a bank’s portfolio of digital assets is – there are now solutions that scale to practically any size, using automation and full cloud enablement to protect everything from WhatsApp chats to status updates on Facebook. In fact, the scalability of SaaS solutions is exactly what makes them of critical importance in the retail banking sector.
#4. Mitigate Risks by Breaking Down Silos
Banks have long been siloed organizations, in which online teams have their own goals and systems, which rarely align with those of in-branch teams and other departments. This inevitably leads to stunted growth, limited scalability, and decreased customer satisfaction. In fact, more traditional banks have built up an infamous reputation for giving customers a huge runaround whenever they want to apply for a new service or receive support.
Information silos also pose risks to security and compliance, since there’s a fundamental lack of cooperation and consistency in corporate policy-making. Overcoming the challenges posed by silos requires a carefully coordinated and team-driven approach to digital transformation. Now that marketing, for example, is the new frontline of brand defense, CMOs and CISOs should be working together to implement integrated solutions that work for everyone.
#5. Choosing Between Bricks and Mortar, Digital or Both
One of the things that makes it so hard for banks to achieve a successful digital transformation is the fact that the sector concerns everyone, and everyone has different needs. Some customers like to check balances on their phones, but prefer to send payments from a desktop. Some like the convenience of applying for a loan using a quick online questionnaire. At the same time, nearly two thirds of consumers still consider it important to have a local branch nearby.
Since everyone’s talking about digital transformation these days, there seems to be a common misunderstanding when it comes to banking – that branches are destined to go the way of the dinosaurs. This simply isn’t true, not least because many people still prefer face-to-face interactions when it comes to discussing important financial matters such as personal loans or mortgages. Digital tech isn’t meant to serve as a complete replacement for these traditional interactions – it’s meant complement them.
If you’d like to learn more about what banks need to do to drive successful digital transformation initiatives, download our latest whitepaper today.