The digital experience economy is drastically changing the way in which businesses engage and transact with their customers, and the banking industry are at the centre of this revolution. Whether it’s planning a trip away, shopping online, booking a flight, or even comparing insurance rates, consumers rely on digital banking platforms to make and manage these payments, and they expect an easy, instant, and seamless experience. To create these digital experiences, banks are having to reimagine the role they play in their customers’ lives in order to remain relevant and competitive in the digital economy. The change will be profound and all-encompassing, affecting the way banks interact with their customers and how they manage traditional banking products and processes. It will also mean that new products and services will have to be created, new technology and talent will have to be acquired, and a new way of thinking will have to be adopted to succeed.
Smart Data for Intelligent Enterprises
While most enterprises in the banking industry know what their business processes are and how they operate, some might not understand why those processes don’t always succeed or how they can extract insight from that information to help them make smarter business decisions. Collecting, storing and analysing operational data is a standard practice in any organisation these days, and it is easy to extract operational data that provides businesses with information about their customers’ transactions, supply chains, finances, employee activities and other business process information. But, there is a crucial element missing from these datasets - the “why”data. Businesses need data about the interactions that customers have with their products or services to better understand why something is happening in order to respond to it appropriately and efficiently. This kind of data can be referred to as “experience data”, because it captures the beliefs, emotions, opinions and demands of the people who can make or break a business - its customers.
To be customer heroes in this experience economy, intelligent enterprises must connect customer experiences with business operations and reimagine how they use this data to guide their business decisions. Using powerful technologies to automate and integrate business-wide data, processes and applications, intelligent enterprises are able to collect insights from customers, employees, products, and brands at every touch point. This enables them to predict and analyse risks, trends and opportunities, and act on them accordingly across every part of their business.
Four trends reshaping the banking industry
The rise of smart digital platforms is transforming the banking industry as we know it, most notably driven by smart mobile technology. Where banking once only took place through face-to-face interactions at a brick and mortar facility, banks are now expected to operate more like social media companies in offering responsive, real-time engagement through technology. This dramatic shift from traditional banking requires the banking industry to rapidly and continuously adapt to new digital business models and technological advances, as well as cultural and organisational changes.
Digital business models are disruptive, and retail banks are realising the urgent need to adapt quickly and transform digitally, as financial services being offered by non-banks is becoming more common-place. Fintech companies are disrupting traditional value chains and fueling rapid innovation as online marketplaces have more and more access to massive customer and supplier networks, enabling them to become alternative banking providers. The pressure is on for the banking industry to create new business models to stay connected to their digitally-savvy customers or face the consequences of losing them to alternative banking providers or other traditional banks who have already digitally transformed.
The banking industry is being reshaped by these four major trends:
- Changing customer expectations: In the digital experience economy, customers want and expect more from their banks. Beyond basic banking transactions, customers want real-time, personalised experiences that allow them to seamlessly access omnichannel banking services from one interface. Banks must be able to adapt to customer expectations by providing customised offers, products and services while still delivering the best customer experience.
- Data as the new currency: Without connecting experience data to operational data, data analysis is fragmented and inadequate, and banks will lack the insight to predict and prevent risk, spot marketing opportunities or personalise the customer experience. Having a deep understanding of customer needs and experiences is crucial to being successful in the experience economy. Banks are spending significant resources to reduce duplicate data and create a single view of each customer, from user history to user behavior, experience, and intent.
- “Platformification” of banking: A new type of plug-and-play omnichannel banking model is appearing at banks that allows multiple participants (producers and consumers) to connect to the bank and third parties, interact with each other, and create and exchange value across all channels and devices. Omnichannel banking simplifies the customer experience with a single, fully-responsive digital platform to form the core of retail, small business or commercial banking strategies.
- Evolution of banks into technology companies: To keep up with digital transformation and rapid innovation, banks are reviewing and changing their organisational structure, technologies, and cultures to run more like technology companies than traditional banks. To compete with the established technology firms for talent, they also need to understand and deliver the best employee experience.
How banks can digitally transform and succeed in the experience economy
The banking industry needs to be acutely aware of new competitors in the financial services industry, as well as rising customer expectations, and the social and environmental challenges that are reshaping the economy, and accordingly reimagine their own internal strategic priorities to survive. Banks provide a vital service to society and hold the unique position of safeguarding their customers’ most private financial information. Banks that are able to leverage this operational and experience data to proactively create personalised customer experiences are leading the way in digital transformation. For the banking industry at large to succeed, they must become intelligent enterprises by adopting smart technologies, integrating systems and providing always-on, responsive services to their customers.
Four strategic priorities critical to the banking industry’s digital transformation are:
- Seamless connectivity
- Data-driven intelligence
- Operational effectiveness
- Financial insight and risk control
To execute on these priorities, banks must become a platform for digital services that reflect a wide range of banking services and products, not just a place for customers to store their assets. They must embrace their new role as trusted financial partners that are able to make personalised recommendations based on their customers’ financial history, experiences, and preferences in order to create meaningful customer experiences. In turn this will help them make better decisions, solve problems, prevent risk and retain customers.
As data management becomes a more competitive differentiator, the most successful banks will learn how to sew together formerly siloed processes, intelligent technologies, and real-world data from customers and partners to achieve seamless connectivity, data-driven intelligence, operational effectiveness and financial insight and risk control.
SAP Omnichannel Banking
SAP Omnichannel Banking technology provides the strategy, expertise, and solutions to deliver on this digital transformation, enabling intelligent enterprises to turn insight into action. Here are a few features of the SAP Omnichannel Banking solution that MDS ap, as SAP Gold Partners, can implement for you:
- Comprehensive business logic and robust self-service features that power out-of-the-box applications for retail and commercial banking.
- Components to centralise critical, operational tasks by providing frameworks for security, entitlements, approvals, alerting, channel management, scheduling, distributed caching, notifications, validations, customer insight aggregation, digital process framework, user administration, and channel and device management.
- Open architecture that supports third-party business services and partner integration with the goal of creating collaborative scenarios and accelerating innovation.
- Fully responsive SAPUI5, removing all restrictions on the technology used for UI development.
- Optional integration with SAP’s core banking solution.
SAP Omnichannel Banking benefits
- Improved customer experience: As we have discovered, the new age of digitally-savvy consumers have high expectations. Omnichannel banking provides multiple touch points for them to use in conducting business with their bank, such as phone, e-mail, web, and social media. Banks can use this technology to harness operational and experience data across all of these touch points to ensure that customer issues are being resolved to mitigate the risk of customer attrition.
- Real-time customer-experience-driven banking: Banks have a wealth of customer data at their disposal which can be harnessed through Omnichannel Banking to be used more strategically to better serve their customers. By monitoring and measuring social media, transaction history, and external information, banks can anticipate customer needs in real time.
- Reduced operating costs: Digital processes can be integrated with customer channels and third parties. An open and agile platform like the SAP Omnichannel Banking solution can help banks reduce time to market and enable personalisation as well as standardisation of product processes. Automating manual processes with machine learning reduces the need for headcount, resulting in lower operating costs.
- Maintained regulatory and compliance standards: The Omnichannel Banking solution allows you to maintain all relevant financial data at the most granular level on one data platform. Banks are now able to quickly react to the latest regulatory reporting requirements, and deliver real-time insights while minimising the need for integration and data harmonisation.
- Open banking and platform-based business models: Banks are collaborating with fintechs and tech providers at a more rapid pace than ever before, and they’re doing it through Omnichannel Banking. Working together to serve customers’ tech-savvy demands on an open and agile platform enables faster implementation for new products and a better customer experience.
Business optimisation, intelligent automation and customer-experience-driven decision-making are key priorities for innovative banks to simplify their business and create transformative customer experiences. Are you ready to invest in SAP’s Omnichannel Banking Solution?
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