Mobile is without doubt the present of banking and a pillar of the consumer’s pursuit for relevant, on-hand amenities. While digital doesn’t just mean good things for the customer; financial institutions are interested in the online model as it is significantly less expensive, more accessible, and can produce more customer intelligence than traditional banking.
But what is the challenge in digital banking transformation? With this shift into mobile, the bank will need to rethink traditional business models, define new revenue sources and above all, keep the customer interacting and engaging in a new way.
That’s exactly when relationship banking comes in.
PAVING A PATH TO RELATIONSHIP BANKING
Understanding the client is paramount when to establishing a meaningful conversation with them. It is important to be relevant, contextual and address the needs of the customer, nurturing the relationship with solutions that fit.
Our increasingly busy lifestyle means that visiting a bank branch is no longer an option for most, and an inevitable void is being created between bank and user.
We are becoming increasingly accustomed to convenience in all areas of our life, and banking is no different. We expect to get useful tips to improve money management and receive tailored and contextual recommendations —all while saving money and time.
So, how does the bank keep the end-user on board, or engaged, if they aren’t adding value or indeed, solving a problem?
It’s true that some financial institutions are paving the way for a dramatic change in the way we bank.
At present, they know what we want (based on our habits) and what we might need (based on contextual information into our finances).
But one thing’s for sure, relationship banking won’t fully happen until banks leverage customers’ transactional data to provide actionable insights and personalized recommendations.
To put it another way:
Personal finance management solutions will only succeed if the focus moves to creating context-sensitive insights and functionality that helps consumers make good financial decisions.
BRINGING IT ALL TOGETHER
The banking world is shifting beneath our feet even as we race to catch up with the last iteration of financial technology.
Increasingly, mobile devices are ceasing to be another way customers interact with financial institutions and are instead becoming the only platform that a large number of customers will use. And, that means that for banks it's not a question even of "mobile first" but of "customer first."
The way for banks to become genuinely relevant is to focus is on positive notifications that promote the next-best action according to customers’ needs.
The objective is to truly help the users by knowing when to offer solutions, anticipating potential problems, or offering useful options to improve their financial circumstances. That’s all that really matters.
ABOUT THE AUTHOR
Erik is CEO of Strands, and is leading innovation in the company to drive the FinTech revolution and transform digital banking.