There’s a fascinating article published recently on The Financial Brand website. The author, Jim Marous, analyses the application of digital technology in the banking sector – specifically in the ways that digital is used to communicate with, and sell to, customers.
One of Marous’ main points is this: although the use of digital technology is widespread, its effectiveness is patchy. As part of the remedy, he logically advocates the better use of mobile apps to simplify banking processes, support integration of products and services, and optimize the way credit unions and banks upsell without a hard sell.
Unpick the digital-analogue divide
There’s not much to disagree with in what he says (see the link below) but what is surprising is that while referencing the digital-analogue divide, he misses an opportunity to explore some of its implications.
Many established financial institutions, having been some of the first to embrace computerization, now face logistical and cost challenges as they seek to keep up with digital innovation. This is exacerbated by the branches from which credit unions and banks have historically sold services, with customers dealing with human staff. Imposing a digital model on such a physical process looks difficult.
In this, very large institutions and digital-only challenger banks both have advantages. Most ‘small’ challenger banks started off as digital and tend to be agile. Meanwhile, the large established institutions generally have the resources to invest heavily, although effective integration of digital can be hard to get right.
In the middle are the medium-sized credit unions and banks with neither of these benefits, but still they must work out how to use digital and hang on to their customers.
All things to all people?
Many credit unions and banks try to have it both ways. They use digital in service provision and marketing, but assume consumers want to keep an analogue service in-branch. This is not unreasonable, but it can lead to a piecemeal approach when developing digital services.
Another hazard is the misconception that digital transformation requires wholesale system upgrades. With the right digital partners this is not true. Essiell’s own travel money service, Travel 4 Money, is a good example. It sits within a bank or credit union’s website, mobile app, and point of sale. And because it is cloud based, new hardware is not necessary.
Digital requires a paradigm shift
For digital banking to work well, the whole process must be digital, with analogue services added as necessary, not the other way round. The customer journey must be seamless, with services as easy to deliver as use. This is the rationale for a genuine omnichannel approach. Individual digital services then come into their own, fitting neatly into your systems and benefiting the whole ecosystem – and your bottom line.
You can read Jim Marous’ article by following this link to The Financial Brand.