2022 Digital Banking Trends: Enhancing Customer Experience

Over the last decade, consumer behavior has been shifting, with clients expecting streamlined and instant access to banking functions. Digital self-service through web and mobile has become a priority over phone banking or visiting bank branches and the COVID-19 pandemic only served to amplify these trends. While digital channels are growing in popularity, the convergence capacity of these channels is equally, if not more, essential. This allows clients to transact via their favorite channels while upholding the context of the interaction for the bank. However, clients typically prefer branches for live consultations and product applications while using digital channels for transactional activities.

Past streamlined services, clients now expect banks to be aware of their situation and develop personalized solutions whenever necessary. The Bain report documents how about 50 percent of clients would purchase their bank's product if it were sold through a customized deal. A BCG report confirms that banks with a sharper focus on personalized approaches could make a $300 million growth in returns on an asset investment of $100 billion.

Banking institutions are implementing these three solutions to provide premium-quality client services. Each complements the next one in a loop of reinforcement that consistently delivers banking insights for a final enriching experience for the clients.

Digitized Customer Service and Engagement: Digital Payments Revolution

The banking experience has been reimagined around client objectives. Self-service is the primary focus, setting up intuitive functions so that clients can initiate and alter payments, raise disputes, and edit account credentials in-app. Smart chatbot solutions are incorporated to preempt customer needs better and resolve issues without a banking agent, thus saving costs.

Engaging with customers who need live support through their chosen channels and media is crucial. Clients are warming up more to video communication and mobile chats over conventional branch visits and telephone conversations. The Citizen's Banking Experience Survey highlights that 86 percent of enterprises and 90 percent of customers employ digital banking channels for services. Customer needs and legitimate authentication should focus no matter the chosen channels. This will streamline engagements, using real-time data analytics to predict the motives for a client call and develop the relevant actions for resolving issues quickly and empathetically.

Banks accumulate real-time data from call log transcription to analyzing interaction segments throughout these engagements. Consequently, banks can develop more innovative ways to better cater to their customers and train their customer service staff.

Certain banking institutions leverage services with result-oriented data tools that facilitate real-time customer sentiment tracking, recording and storing events that help improve an agent's insight and capability to deliver premium-quality customer service.

Embedded or Contextualized Finance

Rather than occurring as an independent, extra step in the buying process, customers anticipate the integration of all finance options available to them. For instance, customers generally do not hope to service car loans. Instead, they dream of purchasing cars with proper means of financing. But more importantly, Embedded Finance isn't just a consumer trend. Accenture reports that the banking market for SMEs (small and medium enterprises) could reach almost $124 billion, approximately one-quarter of the market, by 2025.

Developing embedded finance solutions helps banks deliver on these capabilities. Partnerships with other organizations to establish banking and finance services into conventional client objectives are made possible through embedded banking architecture. Banks are setting the stage for Application Program Interfaces (APIs) to meet service demands and build real-time middle office processing functions such as credit arbitration, to meet client needs.

Since these services are naturally highly variable, many banking service providers and customers prefer setting up in a cloud computing environment. As a result, they can scale dynamically instead of buying new hardware for peak demand seasons or have degraded services during such times.

Hyper-Personalized Banking

Banks' data assets across their client relationships give insights into their current states, including their future needs and how best to keep them satisfied. These insights are leveraged to propose suggestions to the client that will help enhance cash flows, minimize service fees, and maximize income. Furthermore, banks employ these insights to personalize and approve products before delivery to individual customers instead of offering rigid products using flawed 'next best offer' schemes.

These insights can also develop targeted deals for customers through promotional alerts or ad placements within their digital banking services. Implicating front-office staff in interpersonal roles is also a more efficient solution for targeting the message better in terms of time and context. Actionable intelligence can be provided to relationship managers to drive client recommendations and enhance customer relationships.

Banking customers take advantage of such data insights, developing AI and machine learning models (AI/ML) to sort and incorporate massive unstructured and structured data. This facilitates the client recommendations through preferred channels and insights for the banking service providers.

ntegrate Self-Service Opportunities for Banking Customers

About 74 percent of clients report using support platforms that allow self-service before. And about 81 percent tried to resolve complications independently before seeking help from a live customer service representative. The banking service industry has been slow to adopt self-service best practices and capabilities. Consequently, many service providers may not benefit from a 24/7 support capacity, reduced call center volume, and enhanced customer service.

The merits of mobile banking are hard to ignore in a world where people appear to be practically hooked on their smartphones. It would be challenging to come across a banking enterprise that has not developed its mobile banking application yet. However, just because these self-service applications have now spread wide does not imply that these institutions utilize them to their maximum potential.

Adaptability and Openness to Change

The banking industry and financial service sector constantly evolve with new trends emerging daily. To ensure that enterprises provide the best possible client services, one must be keen on current industry events and practices and remain adaptable–this includes finding ways to improve, integrate and update current solution ecosystems and adopting digital transformation.

Why Digital Transformation in Banking is Important

Competition is rife in the financial services sector such that event major Tech Service providers and digital native attackers are looking to break into the market. These competitors enterprises have even launched credit cards and are planning to register bank accounts for their clients. Such involvements threaten the position of conventional banks, especially considering that Tech Giants are perceived to have the best data analytics and digital transformation rates.

Besides, many companies admit that there is still a long way to fully reap the benefits of digital transformation. Conventional banking systems are time-consuming and require a lot of human labor, which may slow down or complicate specific workflow processes. Moving towards digitization of banking systems helps resolve these issues.

The COVID-19 pandemic is also largely responsible for the paradigm shift that is a digital transformation in banking. With public health concerns and lockdowns growing daily, more people resort to mobile and web banking and perform every transaction at their comfort and convenience. The banking industry's digital revolution has profoundly altered how banks operate and serve their clients. And as previously said, it will continue to evolve and become more individualized over time.

The number of banks contemplating core replacement is rapidly increasing. Many people believe that a third-generation banking platform delivers the agility and flexibility needed to reinvent a bank, but this presents new problems and hazards. An enterprise client-centered strategy, coupled with effective technological partnerships, enables banks to efficiently mitigate risks and enhance the potential of their core business transformation initiatives.