Banks today are facing various challenges in order to increase their bottom line. Competition is severe; technology is changing fast and hence needs quick adaptability; changes in socio-demographic factors too are posing challenges for banks to understand customers.
Banks in developed countries are struggling to find growth opportunities due to the stagnancy in economic growth. The youngsters are not banking early due to a lack of employment opportunities. This delays their social growth too and hence curtails future opportunities in banking. They are delaying marriage, buying homes, etc., which is an eclipse for the banking business. On the other hand, developing countries do have tremendous opportunities for business growth, but the dynamics of marketing have changed drastically for them or, as a matter of fact, for banking across the world.
Peer-to-peer lending, mobile wallets, and branchless banking fully operating on digital platforms are pouring salt on the wound. Many telecom operators have opted to apply and even get a banking licence, whereby they will now be offering saving interest rates and term deposit rates when you keep your money in their mobile platform wallet.
All these challenges have created a hard press need to adopt digital technology and integrate all the touch points to better understand the customer and serve them better. Customers today need brands to provide more value to them. More than 73% of people when asked said that they would not be affected if all the brands that were available today vanished off the market. may be because they don’t see value in these brands.
Astonishingly, 23 billion text messages are forwarded every day across the world and 98% of them are read, but only 20% of emails sent are read. This gives us a hint of the preferred touch points and hence, banks need to focus on channels that deliver products closest to customers.
Banks will have to increase their product offerings by collaborating with merchants. Digital platforms have to be seen differently by emphasising more. Social media has to be looked at more maturely. It should not be only posting, but it should be monitoring and engaging more with customers to understand them. Big data analytics based on data collected from various channels such as traditional branches, mobile banking, internet banking, telephone banking, social media engagement, and ATMs must be utilised and integrated to provide the best possible understanding of customers.
Banks’ success is thus dependent on strategic alignment of technology and digitalisation in all aspects of their operations.
Hitendra Lachhwani, Prof.
Ph.D(Pursuing), PGDM(Finance), M.Com(IBO),
SKIPS – MBA College ahmedabad