Traditional banks might have massively accelerated their digital transformation in 2020 - they’re only at 1% of the digital game. Or so says speaker, author and self-proclaimed troublemaker Chris Skinner. He joined our CEO on podcast episode 5 to talk about the state of digital banking today, and why it took a pandemic for digital transformation to finally take off. Read or listen on to learn how today’s banks can become much (much!) better at digital.
How to get Digital Banking right for 2021 and beyond
1. Make technology a central part of your business model
Chris can’t stress it enough - today’s bank leaders don’t understand technology well enough in order to truly become a digital bank. Hence the 11:FS tagline “digital banking is only 1% finished.”
Strikingly, banks themselves would probably say they’ve already achieved 80% of digital banking - simply because they’ve launched a mobile app. And a majority of banking executives believe that digital transformation requires no change in a bank’s business model.
But true digital banking requires a culture shift. In order to succeed at digital transformation, banks will need to incorporate technology into their business models. And invite technical experts to the board & decision-making teams.
2. Harness AI for more than mere cost-cutting
Banks need to follow the example of thriving fintechs more when it comes to leveraging the power of AI. Those incumbent banks using AI still only do it for cost-cutting, like JP Morgan, who recently cut 360,000 hours of legal thanks to an AI engine checking commercial contracts.
However, the real golden nugget is in using AI technology to improve the customer experience - i.e. for customer-facing processes and services. Banks can learn a lot from Alipay’s Ant group, for example, who’s using AI customer intelligence marketing by connecting customer data from all its different apps - unhindered by product silos.
Over the next decade we’ll start seeing a lot more activism amongst investors, customers and employees to say ‘show us what your company contributes to society.”
3. Become Purpose-driven & demonstrate your social value
It’s a simple fact, Chris believes, that consumers will still come to traditional banks for the big nervous financial decisions in their lives.
So to appeal to younger generations - millennials, Gen Z & Y - and be able to support them in their big nervous financial decisions, banks will have to become Purpose-driven.
Future consumers will look for organisations with a clear purpose that they can relate to. Millennials and Gen Z will prefer to be with a bank who supports the same social themes that they care about. It’s the rise of this so-called ‘Stakeholder Capitalism’ which big banks will soon need to find a crystal clear response to.
4. Become a truly cloud-native bank
What should banks focus on to make digital Customer Experience really smooth & successful in 2021? Chris thinks the key is to incorporate digital into the core strategy. Any modern bank should think strategically about updating digital customer contact to serve customers remotely - via the internet.
2020 forced most banks to become cloud-based, now they have to be cloud-native. How? We say a good way to start is by making video banking one of your core customer contact channels.
Director of Retail & Advice at Dutch SNS Bank, Ronald Pieters, also thinks banks should augment human advisors with technology. Discover his bold statements on the future of Banking here >
5. Augment the human financial advisor with AI
In the same way that consumers will keep coming to banks for big, life-changing financial decisions, they will also still want to speak to a human to support them in those decisions.
That’s why banks had better make interacting face-to-face with their human advisors better (for the customer), and more efficient (for their own operations). The solution according to Chris? Enrich human interactions with the help of knowledge provided by AI technology.
The amazing thing is that you can then have your people do the thinking, and leave the routine checks to AI machines - to get the most out of these high-value face-to-face interactions. All banks have to do is figure out for which types of conversations they wish to offer human financial advice, whether that’s in branch or via video banking.
We have to break out of the culture of box ticking and button pushing. The machines can do that - we need our people to do the thinking.” - Chris Skinner
Curious how to leverage AI for Customer Interaction?
Listen to the whole podcast with Chris Skinner on 24Connect :