This has been going on for decades now. The banks worldwide are doing whatever that possibly can to get to a better position. And as the last 18 months have shown us, the digitalization processes have become crucial parts of their operations. In the last year, they managed to master some form of digital sophistication. And while they are constantly strengthening their offerings, the operational efficiency has become something that has been hitting the headlines too.
In February, Katy George who is the senior partner on McKinsey, spoke about the challenges before the companies that are seeking for the resiliency. She highlighted that the pandemic has shown everyone that there is a direct and unbreakable connection between economic prosperity and operational efficiency.
For many banks, the area that still requires a lot of work, is customer experience. McKinsey have been speaking about its importance even before the pandemic hit. This kind of efficiency-focused drive forces the banks to look for inspirations somewhere else. They started emulating the hyper-personalized approach visible that is characteristic for the Big Tech giants such as Apple, Amazon or Netflix.
And although this hyper-personalization is still far away for the banks, especially the traditional ones, big part of the FinTech companies have already successfully implemented it.
For the traditional banks, there are a few niches where this hyper-personalization could become really useful. One of them is how the banks are looking at their customers’ revenues. Ivan Dovica, who is a Co-Founder of Dateio spoke to Disruption Banking in 2020, and he was explaining, how his company is actually helping the banks to better understand the possibilities of personalizing their offers so that they match behaviors of the customers. The technology provided by fintechs like Dateio allows the banks to learn quickly, and also precisely anticipate the needs of their customers. It sounds simple, but is that the case?
What do the traditional banks do about the hyper-personalization?
Nanda Kumar, who is an expert when it comes to navigating the digital revolutions, also spoke to Disruption Banking. He is experienced with working with the biggest banks all around the world, as he has helped them establish the new ‘customer-centric’ software solutions and platforms. Kumar is the CEO of the world’s best relationship-based billing and pricing company, SunTec Business Solutions. There is over 400 million end-customers who benefit from their work and solutions worldwide.
In 2000 their first client was ING Bank. Two decades later, they cooperate with ten of the world’s biggest banks, and have banking clients in North America, Australia, and in India. Their services are also constantly evolving, and Kumar explains how the banks have also had to evolve as the customer needs were changing.
The newest technological solutions can only be useful for the banks. Kumar gives the example of facial recognition functionalities that have been implemented by the HSBC bank. They appear to have been a real game changer for the whole of the banking industry.
The customers expect two things that may look like they are contradicting, when in fact this is not the case. They demand both increased security, and the easy access to the services. Their digital identity simply must be protected. Kumar believes that manual systems should not be implemented for digital purposes – thus, only the digital solutions will make the digital services understandable and customer-satisfying. And the ‘correct strategy’, as he puts it, is fairly simple. Whenever you can do something with the help of systems – just do it. Whenever something requires a human – just use human for the job.
Of course, there are a lot of layers to this issue, and if you are curious about them, we can recommend visiting the Disruption Banking page. There, you will find a great piece written by Andy Samu that dwells on the topic and presents a valuable expertise. Use the link to enter: https://disruptionbanking.com/2021/05/10/how-can-traditional-banks-improve-operational-efficiency/.