It’s important for banks to digitize their existing businesses with a new digital-only banking service because it can meet up the new emerging set of customer expectations very quickly. As the banking industry is a highly regulated industry with a narrow corporate culture’s hold, there are still some internal complex issues that need to be treated. The issues would deal with the need of different and agiler culture to enable the growth and incubation of an in-house “start-up”.
Below are the 4 points to build digital banking business successful:
• Test the customer experience and improvise it
It is very important for any business to know how their customers think and understand their behavioural patterns to minimize the errors occurred. This means a constant prototyping with subsequent iterations and performing experiments in order to make customer's experience more superior across all the touchpoints, is an important step to take. Such type of “real life” testing is critical for identifying what customers really value as opposed to what they might say they value.
• Target the real value of a business
Before launching a successful digital business, there should be clarity about all its value drivers. There is always a scope to replicate and copy the existing models. For instance, mBank, Poland’s first digital bank has succeeded by offering its customers access to unsecured personal loans and other simple products. The reason behind working this model in Poland and the Czech Republic is -- the credit cards aren’t popular there but may not be successful in other markets as well.
• The ecosystem for partnerships
The two big industries with large amounts of digital customers are telecommunications and e-commerce marketplaces. E-commerce players can be useful partners because they give banks an opportunity to create lending services for both consumers and small and medium-sized merchants. Alibaba's Ant Financial in China has got the success by serving small businesses and has grown up to $20 billion in just 2 years, gives us the best example of a bank/e-commerce union.
• Creative Marketing
Since digital banks don’t have the same customer acquisition opportunities as legacy banks that have big branch networks, marketing plays a significant role representing around 20 to 30 % of the operating cost. Digital oriented banks will likely be targeting younger and tech-savvy customers rather than incumbent banks. For instance, AirBank tagged itself as the "first bank you will like" and promised that all customer communications would be jargon-free and all payments will be clearly outlined in one document.
To communicate such distinct selling points within no cost, banks must impart word of mouth recommendations and feedback through social media channels
Thus, with the help of launching a new digital-banking business, banks can rapidly drive value creation. A combination of emerging smart technology solutions and incorporating the critical success points mentioned above can help banks achieve this in an accelerated manner.