Dubai: Financial institutions (FIs) of all sizes recognise the importance of expanding their digital services and are prioritising these investments.
The BAI Retail Banking Outlook Report, based on a survey of FIs, revealed mobile banking to be a key short-term investment priority.
Although FIs across the size spectrum indicated the branch remains the most popular channel, they also reported substantial usage of online bill pay, person-to-person (P2P) payments, mobile bill pay and remote deposit capture.
Clearly, offering full-featured digital banking services can increase customer satisfaction for FIs, but doing so can also help them reach other business goals.
One of the most immediate advantages is reduced costs.
The report found that 41 per cent of FIs identified migrating customers to online and mobile channels as an opportunity to reduce expenses. With the premium that customers place on these channels, FIs have a rare opportunity to make investments that can increase customer satisfaction and control costs.
Another important business goal is customer acquisition; 19 per cent of FIs consider it a critical business challenge, according to the report.
Well-developed digital channels create opportunities for FIs to address this challenge as well as increase their share of wallet and expand their market share, which 28 per cent and 33 per cent of FIs, respectively, consider priorities.
The foundation of these opportunities is the data that digital channel transactions generate on customer behaviour, such as buying habits. This data, which is objective and gathered without human intervention, can show how customers behave throughout all channels. When data from multiple channels is combined, FIs can see a clearer, more complete picture of their customers.
With an improved understanding of their customers, FIs can personalise the customer experience and recommend new products and services, both of which aid customer retention. These advancements can, in turn, drive adoption of digital banking services, thereby improving FI efficiency, and attract new customers, especially those in younger demographics.
Digital banking channels give FIs access to customer data that is generated in real-time and is unprecedented in its amount and detail. That data can catalyse FIs to improve their results, but it also presents challenges, including combining information from disparate sources and detecting patterns in massive data sets.
Therefore, FIs are likely to find sophisticated but easy-to-use analytics tools to improve customer experience and to compete with global banks who will master analytics capabilities. The best analytics programs help FIs thoroughly understand their customers so they can design products and services and target them to the customers most likely to buy.
