JIM MAROUS
DIGITAL TRANSFORMATION TRENDS IMPACTING BANKING IN 2020 The ostrich position is not an option for financial institutions as technology and consumers elevate expectations, says Jim Marous Today’s banking consumers expect a seamless and contextual experience across all the channels they use. In response, banks and credit unions need to upgrade their legacy systems, introduce new business models and build a culture around delivering personalised solutions that leverage both enhanced data and advanced analytics. Organisations will need to prioritise where investments will be deployed and adjust internal culture that has been relatively stagnant around transactions for decades. The focus must be around customer experiences and engagement that may not be confined to traditional financial services. Done well, both the institution and the consumer benefits. The question is, what are the most important trends that organisations will need to take action on in the next 12-18 months? The most significant transformation trends during the next few years will be around enhanced use of consumer data, building engagement, the emergence of a platform economy and the focus on banking models, cultures and channels to ‘be digital’.
ENHANCED USE OF DATA By combining traditional and non-traditional data and technology to process insights, there is an unparalleled opportunity for banks and credit unions to proactively identify consumer needs and the appropriate product or service to be offered – beyond a demographic, product ownership and risk-based profile. Today, financial marketers and product www.thepower50.com
managers have access to lifestyle and psychographic data, financial and non-financial product ownership and purchase data, channel preference insights, brand loyalties, geolocation data and insights from social media and mobile phone use. Combined with advanced analytics, these insights will not only provide purchase propensity information, but also projected timing of needs. The result is highly personalised communication, delivered to the consumer’s preferred device or platform. This can take the prospect market beyond what was possible, increasing inclusion.
INCREASED ENGAGEMENT At a time when fewer consumers are switching providers, effective multichannel marketing is possible, which will stimulate new customer acquisition and organic growth. The challenge is the ability to measure the effectiveness of each channel in the customer journey and to understand the best cadence and sequence of messages for the optimal ROI. Organisations will be able to use social media much more effectively. Last-touch attribution is no longer an acceptable marketing measure. Instead, it is imperative to understand relationships between channels and messages to apply spending to the key moments of a customer purchase journey.
PLATFORM MODELS
A platform allows multiple participants across industries to connect, interact, create and deploy solutions for an increased value exchange between solution provider and the customer. While the retail industry has the greatest number of organisations using platform business models, the financial services industry is increasingly pursuing this form of solution, catalysed by open banking regulations.
CREATING A DIGITAL CULTURE Digital transformation requires rethinking processes and business models from the inside out. Banks need to have both a top-down/bottom-up approach that directs, empowers, engages and inspires the board, management and employees to build the culture change together. It is important to create a vision that is bigger than the legacy business. Employees will only engage if they believe the ‘new organisation’ is positioned to succeed. Consumer expectations will continue to change and if traditional organisations don’t meet their needs, fintech or big tech will. The biggest threats to banking in 2020 and beyond will be complacency and unwillingness to change the way banking has been done for decades.
AT A GLANCE A leading fintech influencer, Jim Marous is co-publisher of The Financial Brand, and owner and publisher of the Digital Banking Report. He has also advised the White House on banking policy and is a regular contributor and guest host for the Breaking Banks radio show. WEBSITE: www.digitalbanking report.com LINKEDIN: www.linkedin.com/ in/jimmarous/ TWITTER: @JimMarous THEFINTECHPOWER50
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