Bank Smarter, Not Harder, in the Intelligence Age

Demand from young consumers for quicker decisions regarding their finances mean that banks are relying increasingly on modern data-processing techniques to enable real-time empowerment.

A fresh generation of consumers, accustomed to having instant access to information, is now demanding the same from banks. They want to deal in real time on their mobile devices when banking online, and they want newer, faster, better digital experiences; banking that is intuitive, dynamic, and responsive.

However, as banking processes become more digitized, bank-customer relationships could become increasingly dehumanized and disconnected. To prevent this, and sustain productive relationships with their users, banks will need to provide a new, more secure, and highly personalized service.

To create these engaging relationships with customers, banks will require not only accurate and useful information, but also to ensure that the way in which they interact with customers is convenient (for the customer), relevant, and occurs in real time. This will allow banks to dynamically guide their customers towards increased financial health and develop and sustain a more enriched trust relationship over time.

The dilemma of digitization?

An key concern for banks is customers viewing their relationship with the bank as purely transactional. Today’s consumers are spoilt for choice, not least when it comes to financial transactions. When their bank isn’t able to offer them more than the ability to merely complete a few transactions, nothing would prevent them from seeking out an organization that. Modern technology, such as cloud and mobile technologies, has given banks the opportunity to completely redefine the banking experience for their customers and re-establish personal relationships. These tools will help banks to work smarter and faster. It is now not simply about processing data and reporting on what has happened in the past, but about the ability to make informed financial decisions about the future.

Younger consumers want fast, event-driven interactions with their banks, based on data regarding their overall financial position. Historically, banking has been appointment-based and took time – whether you needed to sit in front of a PC or in a branch. Now, the younger generation tends to perform many on-demand, quick banking actions from their mobile devices, wherever they happen to be.

Harnessing modern technology

The great advantage of modern technology is that it can provide consumers with the context in which their financial transactions take place. This will prove increasingly important as consumers’ demand for a personally tailored service grows. For example, a person buying a pair of shoes using a banking app could be made aware of how the purchase might impact their clothing budget, or how it might impact their spending budget for the weekend away at the end of the month. This kind of personalized communication will enable informed buying decisions and effective financial planning.

Moreover, modern technology can examine a person’s overall financial position and behavior, allowing banks to make trusted, opportune financial health recommendations. When a buying event occurs, it can be automatically contextualized against affordability, cash flow, and general financial health. Previously, events occurred in isolation. With

modern technology, payments can be seen holistically against the backdrop of a person’s financial wellbeing. What has already become common practice among banks is sending customers messages advising them against overspending on Black Friday or during the holiday season, for example. Communications like this re-establish interaction and symbiosis between a bank and its customers. The bank sends the message that it is invested in the customer’s long-term financial well-being. Receiving a personalized message that is timely and relevant, the customer feels supported, and is more likely to remain loyal to the bank.

In this way, banks can use modern technology to build trust with consumers and further cement the relationship. Technology provides the ability to make faster and better decisions for customers, to improve customer recommendations, advice, and experiences. Banks need to bridge the gap between what they are currently offering, and what customers want and have come to expect in the digital age.

The entire financial services industry is embracing modern technology at an intensifying rate. As this trend of digital modernization continues, consumers are likely to see and utilize more innovative automated services designed to offer them advice and encourage financial responsibility. Banks will need to choose between developing these innovations internally or collaborating with fintechs by utilizing their existing expertise.

There are also a number of other technologies that are facilitating improved relationships and more secure interactions between banks and their customers, in real time. Products that enable push authentication, secure user notifications, and secure, rich media communications – such as voice and video – are protecting devices and transactions from hackers. Mobile payments that allow banks to be ‘present’ at the point of purchase give them the opportunity to influence consumer behavior before the payment is made, instead of reporting on the impact of the decision after it has happened.

By embracing and developing these sorts of products in accordance with the changing behavior of customers, banks can turn transactions and interactions into an ever more important service: constructive and timely customer engagement.