Digitisation is not just a buzz word today and virtually everybody in all forms of industry and organisation is digitising. Technological advancement and its application in the field of life sciences, medicine, telecom, e-commerce, clean tech, fintech, financial services, charity and new space is heralding a new era. We are a privileged generation with a balcony seat witnessing a massive change across all industries.
If you just pause for a moment and think about what is causing this rapid change, you do not have to look too far. Any processes or delivery which faces friction is susceptible to change with the application of new technology.
It is not surprising that the financial services industry and its institutions are embracing change by applying technology to make their processes as frictionless as possible, thereby improving efficiency and customer experience.
However, adoption to change has some nuances. There are institutions which are changing core processes de novo and there are others who are changing the front end while back-end processes are still being run in an analogue mould. The latter approach is a hollow story which effectively is ‘digital to paper’, with scores of people running around to get the fulfilment right rather than a complete ‘zero touch’ process.
Admittedly, local regulation in many countries require companies to inject analogue processes but from the beginning the design must be fully digital and ‘zero touch’. It also implies that as an industry we have an obligation to help the regulator in developing white papers allowing for reforms with the aid of new technology.
It is worthwhile to note that in the banking industry most our processes have a liberal dosage of analogue steps. With the advent of technology, many of the steps are today being challenged.
A typical retail customer, today looks for convenient customer experience along the following lines:
a. Convenient and easy-to-open relationship (at the customers’ convenience)
b. Maintaining accounts
c. 24/7 access
d. Paying bills
e. Efficient to bank
f. Easy fund transfer
g. Easy to use
h. Cost effective and transparent charges
i. Providing competitive rates
If you probe a little further, all the of the above are a must, along with interactive active capability.
Most of the functionality today is designed as a push or pull. Very few functions are, from inception, are designed to be interactive.
From design point of view, this is counterintuitive. Human beings by nature prefer interactive sessions. This does not necessarily mean that a human voice needs to speak with you but from a process point of view it ought to allow for continuous feedback and real-time status enquiry.
To seamlessly allow for such capability, developing an ecosystem through a strategic tie-up is critical. Financial institutions participating in the banking industry cannot operate in isolation but need to develop digital bridges with credit bureaus, central banks, national registries, telcos, as well as entertainment and national utility companies.
Once the ecosystem is developed, customers can see the real benefit as application forms get interactively prefilled with minimum effort to update, thereby considerably reducing completion time and improving customer experience.
There are many facets of digitisation, some of which we are familiar with and some which are more likely to challenge the future.
For starters, it is true that digitisation now allows for more inclusive banking and without necessarily investing, that is through an expensive branch network expansion. The so-called inclusion of the bottom of pyramid banking is no longer elusive. True financial inclusion through strategic tie-ups, coupled with digital platform capability, is increasingly becoming economically feasible for financial institutions.
At Standard Chartered Bank, we are committed to building a true end-to-end digital bank in our market which addresses all the issues outlined in this article. We are excited about future digital roll-outs across key markets in Africa which hold the promise to change the way we bank forever! There is lot to be said but it is best we hold our horses and watch this space!
Futuristically, while cryptocurrencies have been in existence for a while, the current known processes have their own limitations. Almost all service providers today have established weaknesses. It is only a matter of time, before an evolution in protocol addresses the friction.
Just to leave you with a sense of opportunity, globally there are 2 billion people unbanked and according to some estimates a $4 trillion (Dh14.7 trillion) credit gap facing SMEs. It will not be long before an evolution of protocol addresses this friction. When it does happen, remember I told you so!
Jaydeep Gupta is regional head of Retail Banking for Africa and the Middle East at Standard Chartered.
