If you are a lender, technical, agent or most importantly a client in BFSI Sector, I would certainly take it for granted you must have heard the brand-new buzz word "Digital Financial". In my circle, I did chat with a number of people and interestingly, no two persons appear to regard this in exact same fashion - well, this is type of exaggeration, yet you understand! This made me take a time out as well as think what this could imply to somebody like me that is an expert in the market, to answer if a colleague, pal, or a person at my box asks me about this. As a real CrossFit athlete I follow at the very least the initial policy - inform every person you come across about CrossFit.
The factor I raise CrossFit is not just because of my fascination or, even fascination. CrossFit is a little complex and also intimidating to those uninitiated, however to put it just it is toughness as well as conditioning program, which enhances health and fitness. CrossFit defines fitness itself in regards to 10 parts - Cardiovascular Stamina, Endurance, Adaptability, Stamina, Power, Rate, Dexterity, Control, Accuracy, Balance. Yet, generally if you ask any one of your pals what is physical fitness, you might get several responses. E.g. a runner will state ability to run half-marathon, or a weight lifter could say deadlift of at the very least 1.5 x body weight, or a person into yoga might state doing 108 Suryanamaskaras. Well, each of them may be right in their very own method. Your interpretation of fitness might be doing all of those, or you can simply say I am in shape sufficient if I am able to do my 9-to-5 job without taking any sick leave in an appraisal cycle.
On the same lines, banks could translate Digital Banking in their very own terms as well as similarly, individuals like you and also me will have developed some opinion based on our own exposure.
For many years, financial institutions of all sizes and shapes optimized a whole lot by adapting to IT/ ITES (IT Allowed Services) and also they have actually achieved diverse levels of success. However, because of lack of focused as well as longterm strategy, production of disjoined systems, swiftly changing business and operating circumstances, and so on, the designated objectives might not have actually been totally understood. A few of those "failed" efforts can have been driven by the institution's desire to be an very early adaptor of a modern technology or fad ( banking on a incorrect steed). However, we might lose a big chance, if we don't acknowledge as well as bank on a winning horse. So, the method is banking on the right horse, at a correct time - i.e., when the probabilities are reduced. Usually, markets utilize what is called a Hype Cycle to review a new modern technology or fad. If you are interested to understand what is a "hype cycle", please see Gartner's methodology. I will attempt to string together a few of the essential elements of Digital Banking, as unlike the majority of the buzzwords, it is neither a single service nor a modern technology.
Simply around the time (2008-10) I spent about a year plus in Brussels, 3 big financial institutions (Fortis, Dexia and also KBC) which always came across as extremely danger averse bankers from the BeNeLux area, started dealing with significant stress as well as their value eroded considerably as well as activated heated debates in the community - that assumed their money is always risk-free with the banks (either as a depositor or share owner). What actually took place there, is extremely complex. Key variables being, substantial sovereign debt floating in between 84 to 99% of GDP, absence of Federal government for 533 days, etc. These activated liquidity issues. If you include in this various other turmoils in the financial sector around the world, it is simple to realize that the " depend on" within the system was under threat. How would we construct trust? By being transparent. Consumers require (not desire!) transparency in the entire system. Younger the consumer base, that require felt is a lot more acute. This, when you look from the altering consumer experience and also assumptions from retail market ( Amazon.com, Flipkart), transportation (Uber, Ola), food sector (Zomato, FoodPanda, ZaptheQ), you understand where the financial sector is. Consumers have reset the assumptions in regards to value, experience, as well as choices. The Trick takeaway for the lender - User Experience - abundant, consistent, mobile (anywhere), protected, enhanced worth.
Many people I have communicated with lately on this subject, suggested Electronic banking or Mobile Banking as Digital. Yes, this is only the beginning of what could be Digital Banking. Probably, they cover earlier collection of client assumptions. Going on, could we see a day quickly, where there is no paper in any of the banking transactions? When I say paper, I am not simply describing currency! Couple of things which are currently in practice in few banks and getting momentum across are - digitizing processes within the bank (like consumer on-boarding, loan application), cheque truncation systems which permits you to take a image of the cheque on your mobile and send to your bank, etc - there by bringing effectiveness in decisionmaking, ability to customize procedures to specific customer requirements, save some unneeded journeys to the branch, etc. This might imply in other words, implementing record/ image management systems, company procedure administration and also monitoring systems, incorporating these elements within the existing IT remedies. The Trick - digitizing internal procedures.
Social network in the last couple of years have brought most significant influence throughout boundaries - be it, Tahrir Square revolution, Ice Bucket Obstacle, which mobile to acquire, exactly how we order and pay for lunch or identifying a fine eating place as well as sharing while sharing the expense. Social Media is already bring interruptions in terms of which financial institution to depend on, what they can expect from a bank in terms of services, offer a voice to their frustration. Which in turn indicates, financial institutions have to get on the same Social network paying attention to their customers, marketing their services and also eventually, drawing in new customers, retaining the clients convert digital and more significantly, ending up being "The Goto Bank" if the consumer has multiple accounts. As an example, what could not have been expected couple of years back, in Kenya, one of our prestigious customer's Twitter take care of (@ChaseBankKenya) utilizes Twitter to link, launch and share CSR tasks, and address customers' queries as well as issues very effectively. That is, The Reach factor.
An additional silent thing happening behind the walls in a bank is called Data Analytics or Big Data. These churn out unprecedented insights into customer behavior and preferences, driving extremely focused strategies. These also help customers to understand their spend analysis, plan their budgets, financial goal management etc
. Apart from these key components, there are several others which could make the bank more "digital" - chat and video discussion facilities to bring bank closer to the customer when he/she needs it, or educating customers through online tutorials like financial literacy, tax planning, etc, integrating various solutions and systems in the bank to reduce data replication and redundancy and helping the bank make more Straight Through Processing systems there by reducing errors, cost of operations, and increasing efficiency in the entire system. Banks could significantly increase seamless data exchange with others partners like regulatory bodies, clients, government bodies thus making entire process much more transparent and efficient.
Finally, the big question is what should be achieved from the big task list to call a bank "Digital Bank"? Just like in fitness, there is no single solution or the right solution. Each bank has to define its own strategy, execution plan to reach the goal of customer delight, operation efficiency, and overall share holders' enhanced value.
With our sharp focus on Core Banking Solutions, and wide range of experiences in consulting, implementation, testing, integrating several solutions at various banks across the globe, we at Bfsi consulting will be glad to engage with you or your team to help realize some of these goals.