Nowadays banks are at a real turning point. The Covid-19 pandemic is changing people’s behavior, accelerating a process that was already underway. Today, banks are being asked to adapt to the changing needs of consumers, and not only to business anymore.
These same customers, in fact, report a low level of innovation and personalization in their banks. Cash is being used less and less, online access to current accounts is increasing steadily, and people are buying more and more online.
The services of many banks, however, are becoming obsolete. In order to compete, banks must keep pace with consumer behavior and take their place in the new ecosystems by digitizing processes and eliminating human actions as much as possible.
Digital transformation can no longer be put off. But how can you keep up with the times?
New market demands
As mentioned, change is required by the market itself, which is increasingly reshaping itself.
The current market demands:
- The development of new products in a short time frame.
- Strong customer interaction through such tools as real-time information exchange and instant payments.
- Self-service option resulting in less contact with the branch and the bank employee.
The new bank operators, entering the market now, are the ones able to provide financial services, meeting consumers’ needs, with relatively low investments.
We’re talking about the new fintech banks, which are openly competing with traditional banks.
Conventional banks and digital banks Traditional banks and digital banks
These digital banks are actually no other than IT companies, and as such they manage to develop their competitive products due to the in-depth knowledge they have of their customers.
But exactly how do they gain it? By having a dynamic and innovative business model. This is how they manage to gather information about account holders’ behaviors. Unlike traditional banks, on the other hand, which are still unable to manage all this data and information about consumers effectively.
However, there are those who are who are trying to make up for this lag.
They are those banks that have realized that they cannot and should not operate alone: by bringing other players into play, they develop a value chain, forming a local ecosystem of customers and partners.
Thanks to the role of partners – Google and Amazon, for example – banks are able to better manage their customers’ information and large amounts of data, which are stored and analyzed locally. And then, using local hubs, they enable connectivity to Public Cloud providers.
Connectivity plays a key role for both bank customers and the same bank employees working from home.
The financial sector needs its systems to be connected as close to the end user as possible.
There are essentially two reasons for this:
- the duration of the transaction must be as short as possible;
- most cost effective approach possible must be adopted.
To ensure that financial and telecom players, employees, customers and partners are as close as possible to each other, connectivity has a crucial role to play. Banks must increasingly focus on this in order to keep their place in the market.