The financial services market is undergoing a lot of changes. Customers always have appetite for more and are well knowledgeable, looking for convenience and ease when it comes to financial services, particularly via internet and mobile phones making innovation and transformation two most powerful forces that are reshaping the banking industry. Customer expectations, technological capabilities, regulatory requirements, demographics and economics are some of the challenges that banks need to overcome in order to sharpen their tools for entering into the new era.
Modern powerful tendencies are reshaping the banking industry. Social media and evolution of mobile technologies force retail banking industry to evaluate. These changes have to touch every aspect of the industry – product development, marketing, service and management. In the age of fast growing influence of technology and innovation, banks need consistent evaluations for retail branch networks and payment systems. Cost-effectiveness and customer-centric strategies become more and more important within developing global banking networks. In light of global digitalization, cyber security and fighting hack attacks become one of the general priorities. Changes in regulations and social activities also push banks to create new schemes for customer service and long-term product development strategies.
Today, banks have a greater opportunity to grow customer relationships, understand which customers and households are most valuable, and increase service levels. Tying together the functional areas of the bank can improve efficiency, increase wallet share and give customer interactions a consistent look or feel. Banks gain valuable customer insight, and can eliminate redundant processes prevalent in a closed environment. Understanding what customers want is the key to success. Strengthening the relationship between customers and branches should be the primary role of the bank of the future.
Digital innovation has been the facilitator for the customer revolution; nevertheless, it can also offer the opportunity to develop sharper customer engagement, vision and understanding needed to meet more challenging demands. Customers have access to more information than ever before and at the same time customers want banks to propose them the simplicity and approachability they have become accustomed to in other sectors. They want products when they want via the platform they choose, access to help when they need it and to interact only when required. Where customers are looking at value rather than just price, they want policies tailored to their requirements and to be paying only for what they need.
New technologies, new business models, rapidly changing customer expectations and tighter regulations mean that banks, like many other categories, are struggling to align with a rapidly transforming world. In this flurry of change, banks would love to use the opportunity to improve their relationship with customers. In a future where the premise underpinning banks is unraveling and for the first time there are real alternatives, building emotional bonds with customers increasingly looks like a strategic imperative. Banks, fully aware of the problem, are responding to the challenge and are under-going significant change programs.
Social media is transforming banking relationships in significant ways, from improving customer service to allowing users to send money to others via online platforms. New financial technology companies are using social media data to help people get access to credit or even simply open a bank account. Social media can even impact your ability to get a loan. Integration is happening so quickly, it is possible to argue that social media platforms may be the banks of the future.
By providing the ability to share valuable information with the community, social media offers the means to demonstrate that the institution understands consumer needs and positions the bank as a leader in financial services. To be recognized as a reputable banking resource, financial marketers should share relevant content in the form of personal finance tips, industry updates, investment advice and more. Such insight also illustrates the supportive nature of the institution, increasing consumer confidence in the bank’s dedication to consumers’ financial well-being. High levels of penetration, use and engagement have meant that financial institutions are starting to recognize the opportunities social media can bring to their businesses. They are looking to gain a competitive advantage over other institutions while also trying to mitigate the threats posed by social media, such as when people share highly sensitive information publicly.
In recent times, banks have little excuse now to let consumer finance slip or grow timidly because economic growth is expected to pick up pace, mega housing projects are coming up and urbanization and public craze for better lifestyle is creating demand for consumer finance. For most banks, selling consumer finance products in emerging markets has seemed like more trouble than it’s worth. In these markets, incomes are low, transactions are small, and relatively few people use banking services of any kind. In reality, the opportunity to create profitable consumer-finance businesses in emerging markets is much more attractive than it appears. But to take advantage of that opportunity, banks and other financial services institutions must develop new business models and find ways to team up with new partners.