Digital Transformation: Chances and challenges for banking

According to statistics, in 2017 billion people will manage their financial transactions using mobile banking. Banks, on their part, have to keep on adapting their customer experience strategies to mobile devices. Many banks, however, are not yet ready to do it. But what does the digitalization exactly mean for banks and their customers?

Wearables are more than just a fitness accessory

In 2019 the global retail revenue from smart wearable devices is expected to reach 53.2 billion U.S. dollars.

Wearables have already captured the market as a stylish fitness accessory. But these smart devices have a great potential in further fields. Investing in wearable technologies can allow banks in the long term reducing marketing costs, enhancing customer experience, raising awareness and increasing client relations.

Previously, banking apps had mostly rudimentary functions, e.g. checking a bank account balance, payment confirmation or appointment remainder. The potential of the wrist-worn devices is however much higher. For example, voice-driven money transfer or even determination of a credit limit based on vital functions.

Although it is becoming increasingly important for banks to stay innovative, it shouldn’t be forgotten that customers rely on traditional offers like taking up loans and low-risk investments.

That’s why it is recommended to find a fine line between a classic and a modern business model in order to ensure customer confidence and loyalty.

Multifunctional application of mWallet

The next step towards mobile banking is the integration of wearables with mobile payment systems. In fact, wearables can be used for further services, incl. hotel keys, frequent flier cards or identity documents.

This would enable further payment methods, e.g. via gift cards. The integration of social networks in the services would smooth up the process of sharing, gift-giving, and lending between users.

In the fast-moving and technology-driven society, customers expect that goods and services are immediately available.

The competition for the mobile wallet sector is still in its infancy. In order to keep up with the trend, banks need to integrate the strategy into the customer experience already now.

Functionality enrichment of mBanking

Mobile Banking is constantly growing. To retain customer loyalty and satisfaction, banks have to provide their clients with more than just pure transaction services. It refers to customization, integrated social media functions as well as offers from third parties by building API-based eco-systems.

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Some banks already offer such options as, for example, remote check deposit, when user data are communicated via peer-to-peer transmission and personal finance management in banking apps.

Skype and FaceTime can be perfectly used as a communication platform providing banks with a great possibility to be available for their customers 24/7.

The competition doesn’t sleep

In the coming years, we will experience radical changes caused by the user behavior of digital natives and increasing competition.

Banks are predicted to use social media to overcome the challenges of the traditional banking and to maintain customer loyalty in online communities.

In the future, banks will have to come to terms that their competitors aren’t represented just by other banks, but also by the successors of such online giants as Amazon and Facebook.

In order to distinguish themselves from the competition, it is highly recommended to pay a special attention to the increasing popularity of wearables, the expansion of mWallets and further functionality improvement of mobile banking.

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