According to the consulting group, next year we will see continued growth in the use of technology and APIs, aimed at improving the services of entities’ digital platforms. Banks must expand their openness and focus on their users, not only as customers, but as human beings with a unique and special life.
Let’s see some of their interesting predictions:
Rising interest rates are being catalysts for innovation
Previously, low interest rates dominated the global macroeconomy, causing banks’ profits to decline: deposits generated little income and savers received minimal interest or even had to pay to keep their money in the bank.
This absence of rate competition allowed for a flood of digital-only banks to rush in. It also caused banks to shift most of their attention to those products that were still generating revenue. In the process, however, they became less customer-centric, more siloed and less innovative.
And to make matters worse, digital banking initially eliminated the personal connection. From there, the inertia of the relationship with the customer was no longer enough to ensure their retention. Then, the high rates emerged and radically changed the strategies of the entities. In the global landscape, the most innovative banks enjoy the most stable deposits and lead the market due to strategic mergers.
The ability of data to become a product
On the other hand, Big Data led banks to imagine a glorious future in which decisions could be made based on real-time information, customers could be understood in unprecedented detail, and products and services could be personalized to game-changing effect. But until now, most banks have not been able to take advantage of the available technology.
The use of cloud computing, artificial intelligence or machine learning have the potential to drive innovations capable of attracting new customers. These tools can facilitate decision-making based on insights. The problem is that incorrect use of technology has generated data bottlenecks that suffocate the flow of information.
We need a change in mindset
Data should be regarded as the oxygen that fuels every bank action, rather than the CO2 that accumulates as an inevitable by-product of its actions. The value to the bank and its customers should be recognized and it should be treated the same as a product. Those responsible for information management must identify and define use cases, analyze and enrich the data and allow different bank departments to access them.
These product owners should promote the data and help the business to use it as effectively as possible. Democratizing access to data allows users to analyze their financial situation in real time and increases their satisfaction with the service. This, in turn, helps the bank reduce costs. By providing a single view of all data, redundancies are eliminated, information management is simplified and innovation is promoted.
“Data, when treated as a product, has the potential to transform the foundations of banking. “Banks don’t lack data, they lack the means to unlock it and turn it into valuable insights.”Michael Abbott
Senior Managing Director – Accenture Global Banking Leader.
Customer at the center of the strategy: from theory to practice
For years now, financial service providers have focused their attention on the user experience. The customer journey defines in many cases the commercial strategy of companies. Digitization has helped deliver speed and simplicity, while data analysis and enrichment has allowed companies to better understand their customers and personalize their offer.
The benefits of digitalization have been huge, but there came with disadvantages. Banks perfected mobile banking, but in the process the customer journey became functionally correct and emotionally empty. With 97% of today’s banking touchpoints occurring remotely, banks themselves have distanced themselves and lost the human connection.
This has dented user confidence and worsened their loyalty levels. That is why it is necessary to discover customer’s intentions and analyze predictive moments. By knowing what is most important for a user at a given moment in their life, we can use technology to nourish our communications with them in a comprehensive way.
Coinscrap Finance and its AI engine, COCO
What did a great branch manager do years ago? He kept track of who his customers were, what they wanted, where they were going in life, and what they needed at any time. Listening, learning and acting on this knowledge was his bread and butter. The emergence of Big Data has made that level of detail impossible, until now.
The enormous amount of data that is generated with daily transactions is reflected in our online banking system and, due to companies like Coinscrap Finance, it is possible to analyze, categorize and enrich all that information to offer the same personalized service as in the past. Thanks to the principles established by behavioral finance, we can help people achieve their financial goals automatically and effortlessly.
Our in-house developed AI engine, COCO, collects a wide variety of information in real time and analyzes it to identify valuable insights in order to define successful strategies for the banking industry. It is now possible to offer a hyper-personalized service to each customer, simply and at scale, to focus on people’s lives and establish a unique bond with users.