Insights from Money20/20: How fintech mobility can enable digital transformation in banking
During the Money20/20 event in October, we heard directly from some of the leading minds in financial technology (fintech). The insights they shared can provide some important clues about what the future of banking might look like.
Today’s banks have the opportunity to take advantage of digital transformation driven by mobility. However, recent data from the 2017 Consumer Bank Marketing Report shows that banks may not be capitalizing on this opportunity yet:
- 64 percent of customers (including 70 percent of millennials) feel retail websites know them better than their bank does.
- One in three customers feel they receive information from their banks irrelevant to them.
In many ways, fintech startups have lead the way in maximizing innovation through digital transformation. In spite of this, adoption rates for fintech services remain relatively low: According to the EY FinTech Adoption Index 2017, only 33 percent of digitally active people regularly use at least one fintech service. Simply stated, many customers just prefer to continue working with traditional banks to meet their financial needs.
But the opportunity for banks to digitally reinvent themselves is not over. Mobile technology can help banks achieve better results across three key areas:
- Increasing consumer convenience
- Empowering branch employees
- Simplifying corporate onboarding
Increasing consumer convenience
The Consumer Bank Marketing Report shows that 64 percent of customers prefer to handle their banking needs online or using a mobile app rather than visiting a branch. In order to provide customers with these capabilities, banks must first be able to combat fraud and ensure know-your-customer (KYC) compliance.
A report from Thomson Reuters found that banks spend an average of $60 million on KYC annually, with some spending as much as $500 million. Increased interest in mobile banking along with high rates of fraudulent applications are key drivers of these high costs.
Organizations with high mobile maturity are realizing that the built-in capabilities of mobile devices can help lower these costs. For example, smartphone cameras can be used as optical card readers to capture data from a customer’s ID and then populate that data into forms instantly and without errors.
This drives down the cost of verifying a customer’s identity and decreases setup time for legitimate customers. This is an important first step in offering customers the convenience they expect, without sacrificing compliance or security.
Empowering branch employees
Since customers can’t conduct every aspect of their financial business online, the least banks can do is make the experience of visiting a branch as valuable and painless as possible. One way to make this happen is by providing branch employees access to mobile devices and empowering them to use transformative technologies such as augmented intelligence.
AI can help bank employees quickly find the data they need so they can fully understand what brought the customer into the bank that day. Rather than asking the customer questions, possibly making them feel like the subject of an interrogation, empowered employees can quickly make product or service suggestions that have the potential to meet the customer’s needs.
Streamlining onboarding for corporate customers
Customers who opened an account within the last 90 days are nearly three times more likely to churn than other customers, reports Onovative Banking. This means that creating a quick onboarding experience is one of the most important things you can do to keep customers. This is particularly true for corporate customers, which pose unique challenges for banks:
- Large amounts of data must be gathered.
- Regulatory requirements for corporate clients are becoming stricter every year.
- Onboarding periods commonly last two months or longer.
Again, the built-in features of mobile devices can help enable digital transformation and facilitate changes that will help keep corporate customers satisfied. Mobile devices can be used to gather data and then compare that data across various sources to ensure the application is accurate and compliant with applicable regulations. This allows the application to proceed quickly, paving the way to a long and happy customer relationship.
Start your digital transformation now
The mobile technologies empowering digital transformation may seem futuristic, but they’ll be an ingrained part of the banking culture before you know it. Banks that start capitalizing on them now put themselves in the best position to meet the changing expectations of customers going forward.
Are you ready to start your digital transformation?