Traditional banks and vendors in the financial services market are struggling to survive in the digital age. Not only are they being confronted by a steady influx of disruptive newcomers in the form of emerging fintech startups, but their ability to rapidly respond to changing consumer expectations is being tested as well. As a result, many traditional banks are facing a digital dilemma. They need to either modernize their outdated legacy technologies and digitize their operations, or acquire the fintech disruptors and assimilate them into their own financial services mix.

Regardless of whether they decide to compete or integrate, one thing is clear: If traditional banks want to survive this digital disruption, they’ll need to learn a few lessons from these agile, data-driven fintech startups, especially when it comes to meeting the service expectations of the modern consumer.  At its core, this means becoming a truly digital organization.

Live and die by the data

The digital, personalized banking organization has data at its very core. From customer preference to customer profile, data drives every aspect of the customer experience and has the power to transform the way people interact with their bank – for better or for worse. Financial services organizations must have a handle on their customers’ first and third party data in order to build a customer experience that is both seamlessly omnichannel and always relevant. This imperative starts with how consumers are increasingly experiencing all types of services. Consumer banking expectations are being reshaped by their experiences outside of the financial services industry. They increasingly know what they want, when they want it and through what channel. It also has to be at the quality of service level that they receive from other companies that put a greater focus on consumer experience, like Amazon and Google (News - Alert).

Because of these expectations, it’s critical that, like the startups disrupting fintech, traditional banks deliver a seamless experience that increases convenience and engagement, and represents the business consistently at every interaction. This begins with in-depth knowledge and understanding of the customer journey - why and how customers interact with the bank. Customer needs and expectations should drive the experience design at all steps.

Bank of America’s channel-agnostic customer-centric model - which is resonating across the banking industry- is a great example of a traditional bank succeeding at this. Their current digital touch points allow for check depositing, bill payment, and appointment scheduling. All of the experiences are dynamic and seamlessly integrated across desktop, mobile and branch. As the bank continues to work toward adding additional capabilities, their customers can rest easy knowing the company is committed to continuing to innovate to meet their needs. And it’s customer and behavioral data that are getting Bank of America there.  

But in the digital era, it’s not just about being omnichannel anymore; deeply rooted relevance is absolutely essential. Banks now have a wealth of information about their customers at their fingertips. Whether it’s what channel they used, the transaction they made, or the branch they prefer, banks have the ability to make connections and extract insights that can then trigger and drive digital processes that deliver the right content at the right time, helping to assist the customer, without skipping a bit. (Or asking the customer to complete yet another form).

Once context is added to the banking experience, users are not just receiving balance updates in real time or using mobile to deposit their checks. They now have the ability to see the amount they spent at a specific retailer over the past month, or how much they’ve spent in a specific industry over a certain period of time. It’s this behavioral information that enables the bank to provide a relevant solution to the customer when it matters most – whether that’s the right kind of mortgage or loan, a new savings account or perfect-fit credit card.

How to get there

Traditional retail banks are hampered by the rigidity of legacy systems. In order to deliver on customer experiences that will enable them to survive in the digital era, banks first need to adopt a more flexible and agile technology that supports digital transformation.

Banks can look to the evolution of business process management (BPM) – or digital process automation (DPA) - to help. By wrapping a digital process automation layer around existing IT systems processes, traditional banks can bring their siloed systems together and provide the flexibility and control required to compete in the digital economy.

The effects of this for retail banks, and other financial services institutions, are both internal and external. They’ll now have access to a suite of digital solutions that enable employees to engage better with each other and customers, while applying the right insight and the right context at the right time to improve the customer experience.

About the Author

An established senior executive with over 20 years as a software executive with a proven track record of driving rapid sales growth and scaling businesses. Prior to joining Bizagi, Rich served as VP Sales and Services, General Manager, and SVP Worldwide Field Operations in companies such as Model N, Aceva Technologies, Extricity, and Peregrine Systems. Rich also brings strong Business Transformation expertise from his experience with Gemini Consulting and Cap Gemini. Rich holds an MBA from the University of Michigan and a BS in Mechanical Engineering from the University of California, Berkeley.