Across the whole globe banks are searching for the way to convert to a more digital business model. The changes have not been too disturbing so far despite intrusive offerings from financial institutions or other Fintech businesses. However, the efforts taken so far are the very first step in the ladder of financial digital market.
Digital banking means much more than just going paperless and being able to process more information in the shortest possible time. Leading companies are offering improved customer experience and delivering more efficient services.
Well, customers are having difficulties to resolve some banking issues due to the obsolete rules still popular amongst the traditional banks. On the other hand, such a situation creates an amazing opportunity for digital banking sector to develop the transparent, trusted and user friendly digital solution. Recently, all the efforts are focused on the customer experience and effective customer engagement as the “old” banks are trying to keep up in this fast-changing environment and because of such a vivid competition banks must adapt quickly to all innovations.
What is more banks, have increased their adaptive strategies up to 74% (chatbots, AI driven solutions, apps, mobile wallets etc.) in comparison to 39% from 2010. The revolution in traditional banking is easy to be observed as well as their change towards digital approach.
Taking above mentioned data into consideration it is clear to state that traditional banking approach does not work anymore in a world transformed by AI and high speed internet.
Why Online banking? Benefits of going digital
The traditional banks are slowly evolving into online banking services to cover a wider array of customers. It’s basically fast, secure and convenient. However, let’s dig a little bit more. Online banks are decreasing the operational costs by elimination of back office processing operations and almost no errors and smaller branches which can be even deducted to video call with banking specialist. Additionally, the operational costs can be greatly reduced, in some cases even up to 40%.
Online banking services are available 24/7, through any mobile device, PC or branch kiosk. It’s very convenient to use such a service as it can synchronize with all payment apps, e-mails or other bank accounts. It’s fast, because mobile and online banking features are quick and easy to use, banking that used to take 20-30 minutes can now be done in 20-30 seconds. Last but not least its secure, digital banking is safe due to implementation of newest security systems like 3DS or 2 factor authorization.
Digital Banks Benchmark
Browsing through the internet, it doesn’t require too much hassle to find a lot of digital banks ready to process our payments. All ready to be used, most of them are customer friendly and practical. Why not to pick up first from the bunch? Let’s have a look on some of them, considered to be the most popular:
- Revolut – Lowest fees, slightly behind N26 concerning cash investment ($250m), around 300m monthly website visits,
- Monzo – Most user friendly, ($180m)-invested, visited a bit less than 200m a month,
- Starling – Best for affluent, ($133m) rise from investors, about 50m visits a month,
- N26 – Most diligent, has the biggest pile of cash invested ($300m), more than 400m visits, makes it the most popular.
All of above mentioned banks run via mobile app as well, so all traffic data are more likely to be a sign of potential customer interest than real engagement. Monzo and Revolut get most media buzz according to Mention.com service when it comes to media attention, but they are the youngest from the presented (both founded in 2015). Menzo is also able to boast with best reviews from presented companies.
The table below presents some of the key services that according to Mention.com a particular bank is able to offer to its customers:
Digital banking users are estimated to reach 3 billion by 2021, which would be 52% more than this year figures. In a survey led by PwC.com, people have been asked about their banking habits. It is clear that mobile banking is very important for customers and it is point banks should focus on. Another thing that was touched upon, is convenience of usage and a goal-oriented consumer in need of help to reach those goals. Also, more than 63% said that it’s good to have an app for mobile payments.
According to the Banknews.com, the typical customer of digital bank is a 18-44-year-old. Mostly western European or USA citizen. Going further it’s worth to mention that only 31% of examined group indicated that visiting a bank branch is their primary method of banking. The rest is using ATM or online banking via mobile, tablets or PC’s.
How to change the world?
Digital banking growth is huge nowadays. The customer is looking for a service that is easy to use and can provide the best customer experience, that is personalized, convenient, omnichannel and most likely digital. The more user-friendly experience, the more is the consumer engagement and that is what digital banks should focus on in the nearest future. Time is what really matters to face innovative services from competitors all round the world. Digital banks are constantly reshaping the financial machine. The innovation is what matters and services like live video streaming may revolutionise the banking industry and the customer engagement, what has proven impact on conversion rates and seems to be a future of bank content strategy. Today we are witnessing the transformation of the banking industry into digital. How far this digital revolution can get us? I guess we will now in a while.