Tech Trends Retail Banks Need to Keep an Eye on In the Post-COVID Era
The COVID-19 pandemic has turned the world on its head.
The magnitude of disruption of this scale has never been experienced previously – whether in business or personal lives. The state and federal mandates have impacted person-to-person business interactions and have driven longstanding business practices to adopt new working models.
As the COVID dust is beginning to settle, sectors like the banking and finance will have to focus on the new rules of engagement. As the economic fall-out spreads, retail banks have to juggle some big priorities and take concrete steps to reposition themselves and re-calibrate their future measures.
A close look at these new rules reveals that now banks and financial institutions have to continue to evolve and innovate in this new and reconfigured business environment while assimilating the new normal practices introduced due to the pandemic.
As the post-COVID planning carries on in full swing, retail banks have had to revise their goals to foster growth.
Here are the technology trends that they have to keep an eye out for to achieve this.
Move towards ‘experience transformation’ from ‘digital transformation’
Digital Transformation has been a part of the retail banking conversation for quite some time now. However, Digital Transformation in the post COVID world has to drive ‘experience transformation’.
For retail banking, digital transformation will be useless unless it changes the entire customer experience. User experience design thus climbs up the priority ladder. UX design and digital technologies have to now converge to create unforgettable experiences while helping the customers solve their problems. UX is all set to become the driver of the digital age. Those who do not get on board will be left behind.
AI drives personalization and customer experience
Retail banks have to now press the accelerator on creating hyper-personalized customer experiences. Getting a 360-degree view of the customer was important before, and in the post-COVID world, it will become imperative – Especially as retail banks evaluate how to expand relationships, increase customer retention, curate product portfolios, and communicate proactively.
According to research, 77% of bankers believe that “unlocking value from AI will be the differentiator between winning and losing banks.”
Customers are expecting an Amazon-like experience from all their digital interactions. Retail banks will now have to jump on the AI bandwagon to personalize solutions, curate and simplify product sets to match customer demands, ensure faster turn-around times to cater to the tech-savvy millennials, and offer seamless and highly personalized solutions.
AI will also become the enabler of the customer-centric business model by providing the insights and intelligence they need into customer behaviors to deliver enhanced customer experiences.
The rise of the ‘platform of service’ model
Technologies such as Cloud and AI are emerging as the tools that will help banks distinguish their offerings, make operations more efficient, and increase competitiveness. As banks become focused on creating more robust digital ecosystems, the push towards digital transformation will continue to change banking business models.
The changing markets and growing customer expectations will lead banks to become part of the ‘platform of services’ that will be more responsive to customer needs. This new ecosystem will integrate modern banking technology elements such as cloud, open API’s and explainable API’s together to drive seamless user journeys.
As channels of customer interaction and engagement with the bank evolve, we can expect customers to demand to interact with banking products and services leveraging banking applications. These applications will have to become more intuitive and will have to leverage technologies such as AI to offer enhanced support and respond intuitively to customer needs.
Increased focus on advanced analytics
Data will continue to remain one of the most valuable assets for retail banks.
In the post-COVID environment, this data will have to go hard at work and will be an integral and essential part of almost every banking initiative.
The focus on advanced analytics will only increase whether it is to drive individualized banking experiences, increase customer retention, or prevent fraud. The reliance on real-time information will increase to prevent fraud, ensure regulatory compliance, and drive predictive banking.
These aspects will increase the adoption of advanced analytics as retail banks become more data-driven in all aspects of decision-making.
The final frontier – Security (and, therefore, testing)
Security will become the final frontier as banking interactions become more digital than ever before. The role of automatic testing assumes a greater and more important role in the banking application ecosystem.
The focus on testing such as penetration testing and security testing will be essential for keeping the customer information secure and meeting the regulatory and compliance demands.
Testing now has to take innovative approaches to drive performance, application experience, and security.
Additionally, retail banks have to focus on ensuring the security of IT systems, banking applications, and the entire ecosystem. For that, robust security audits and deeper testing practices will have to become mainstays.
Banks have to focus heavily on designing their technology investments such that they can move along the path to economic recovery faster. While banks have been building digital relationships with their customers, these initiatives have to become more robust to fit in with changing customer behaviors.
It is becoming increasingly clear that retail banks have to adjust their strategies to the consumers’ mindset and move past superficial digitalization initiatives. They have to re-imagine ways to interact and engage with the customer and process data and information to generate revenue while enabling risk-averse, elevated, and exceptional digital interactions.