Banks are moving from an interruptive marketing strategy to a customer-centric approach and smart banking. This trend existed long before the COVID-19 crisis. But the pandemic has made physical interactions more difficult, accelerating the ongoing digital transformation of bank branches. Although many of these changes were forced, they resulted in numerous benefits for financial institutions.
According to Mckinsey and Company’s 2018 report on Bank Branches for the Digital Age, transforming physical branches into digital bank branches can lead to significant cost-saving and an increase in revenue. With the right software, bank branches can be up to 70% more effective.
Relevant provides world-class outsourcing and fintech software development services. Our team can help you adopt the best digitalization practices by developing custom branch solutions tailored precisely to your institution’s needs.
This article will discuss the importance of digital branch banking and explain how smart banking can elevate your sales performance.
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Traditional branches were in decline long before the global pandemic. Based on Finalta’s 2019 Digital & Multichannel Benchmark, approximately 80% of top banks’ customers managed their money digitally before COVID-19 was even on the horizon. Forward-looking banks and credit unions started seeing digital sales as an opportunity decades ago.
To meet the market demand, many of them did more than just add a few new features to their banking apps. Industry leaders have transformed their existing approach into an entirely new business model with digital bank branches specifically focused on meeting customer needs.
The COVID-19 outbreak has pushed this transformation towards digital solutions even further. According to McKinsey & Company’s 2020 Reshaping Retail Banking Survey, about 20% of American and European customers expect banks to keep improving their digital channels after the pandemic.
Today, digital sales and smart banks are no longer considered innovative. They’re the new normal. For banks that haven’t prepared their digital bank branches for the future yet, now is an excellent time to learn from other’s success.
Transformation towards digital-first bank branches can help financial institutions to increase sales in various ways. Let’s take a look at two hypothetical customer journeys so you get a better picture of how it works.
Let’s imagine George wants to print a financial statement at the self-service terminal system (SSTS). Upon accessing the terminal, the analytical model detects George as a small business owner with steady revenue.
After printing the financial statement, the terminal displays an offer to open a business account. George accepts and uses the SSTS to schedule a meeting with a banking associate. The next day, George opens a new account from home via video conference. There, he uploads his scanned documents and signs a contract with an electronic signature.
In another case, Deborah uses the bank’s mobile app to pay off loans she received from a different bank. The analytical model checks her credit score, monthly income, and preferred communications method. The system also takes note of Deborah’s favorite coffee shops and online stores.
Next, the app sends a pop-up notification offering Deborah a new credit card on favorable terms with a low-interest rate. And the icing on the cake, the bank even offers cashback rewards when she pays in her favorite shops. Deborah accepts the offer and uses the mobile app to customize the card’s design and orders it to be delivered. Meanwhile, the card automatically appears on her account.
As you can see, the bank managed to predict customer’s needs to provide services they could really use. In George’s case, the system even managed to convert a low-value transaction into a high-value deal. Now, what role does the digital stack play in both examples?
The digitalization has affected George and Deborah’s customer journeys on several tiers. Let’s analyze each of them:
The stories we described above perfectly capture how digitalization can enhance sales. That doesn’t mean banks should implement these exact solutions, but they’ll have to rethink their business models to meet customer’s needs more efficiently.
According to Mobiquity’s 2021 Digital Banking Report, over 40% of customers would switch banks to get better digital tools. And the thing about smart banks—they are quick and easy to sign up for. Switching won’t be hard because users can upload scans of their ID, apply an electronic signature, and order a card within minutes.
To optimize your digitized banking service, you should place the customer at the center of your digital transformation and financial app development.
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Here are some recommendations you may want to follow during this process.
Retail banks’ customers should always feel welcomed. How do you achieve this? Some best practices include:
You can also enhance your offering by partnering with merchants and marketplaces. For example, users can receive discounts or cashback when paying for goods or services via your app or card.
Another key goal is to make your customers feel that your company is always ready to assist them. You can make this possible with digitals tools and customer support.
Direct support is crucial as bank accounts become increasingly digital and customers perform many transactions themselves. In general, in-app customer support can be delivered in multiple formats:
Despite these practical tools, businesses still need to have a customer support team. Ideally, users should be able to reach real operators via an app whenever they need to.
Digital sales are about offering the right product to the right customers—when they need it and how they want it. To engage with customers more effectively, you can use the following solutions:
A side note here, the integration of all systems is essential. But you need to remember that they will work with large volumes of personal information. So your IT ecosystem must include a reliable fintech app security solution to prevent data leaks.
Relevant can upgrade your software with the latest features, such as role-based access control, secure app logic, adaptive authentication, military-grade data encryption, and tokenization. Our dedicated software development teams can also implement cybersecurity into the core of the development process.
Customers want advanced services to be at their fingertips. You can implement most simple transactions with apps or other solutions. Some of the functionality people expect from digital banking tools are:
Many high-value financial transactions can’t be entirely online. Customers still need to visit bank branches to get a mortgage, withdraw large sums of money, or close a huge deal.
But your aim should be to make even complex transactions like that feel effortless. At the same time, less tech-savvy customers must be able to find support if they face a challenge. Both of these goals could be achieved by creating digital bank branches.
Digital branches should offer a unified customer experience and, ideally, 24/7 access for complex interactions. Here are the key solutions that can make this possible.
These digital solutions can be possible with a centralized data system and advanced financial software. If you want to improve your platform or build it from scratch, you might consider hiring developers with relevant expertise.
Relevant is a Ukrainian outsourcing company that has experienced developers with qualifications in various programming languages, deep industry knowledge, and some of the most favorable rates.
Bank customers will continue to move toward digital tools. Although physical branches won’t lose their relevance altogether, it’s vital to reinvent bank branches for the digital age to attract more clients.
Financial organizations striving to keep up with the times should focus on digital sales. This means providing an omnichannel experience that links online, mobile, and physical branches into a seamless ecosystem with a personalized approach for every customer.
Do you want to enhance your sales with innovative solutions? Drop us a line to learn how we can guide your financial institution towards digital transformation.