Nov 2, 20214 min
Too many financial institutions today think that simply launching digital ports of their services is enough to maintain their position in a rapidly evolving banking ecosystem.
For one thing, a bank's digital switch may be seen as too little too late and on top of that, these digital changes may not even serve customers’ needs as well as they could have.
Digital banking today has hit a certain point of maturity, as most banks now offer easy access to common banking services on convenient online channels. A 2018 survey by Oracle found that 81% of consumers are already using digital channels to engage with their banks.
However, the Digital Shift Has Only Just Begun
The wide availability of smartphones has created a generation of young, well-informed consumers who can easily shop for the best options with the quick swipe of a touchscreen. Hence, millennials (those who were born between 1981 to 1996) crave a conveniently integrated and seamless experience in all their dealings with their service providers. They want to feel wanted, responding well to personalised services that "speak" to their diverse values and needs. As younger adults, millennial needs are often shifting, and they need a brand that is able to keep up with their evolving lifestyles.
For millennials who grew up with mobile technology, convenience isn't just a want anymore, it's an expectation.
When it comes to financial services though, the key principle for capturing the hearts of the average millennial is to reduce their pain points, getting rid of any friction in their customer journey.
Understanding Frictionless Financial Services
Average customers are generally satisfied with basic digital banking, but the experience breaks down the second they attempt to interact with more complex services. Often, there is a stark shift between the simplified, user-friendly services on their typical bank mobile app versus the frequently rigid and time-consuming manual processes, especially in terms of personal financing products.
Let's take personal financing as an example.
What could take weeks for a traditional bank to process using old behind-the-scenes methods can be completed in just mere hours by banks with an updated backend structure — as long as customers have their documents in order.
It's not enough that financial institutions put a pretty online face for the customers, they need to take things further and overhaul the entire underlying process.
Customers do not just demand instant personal financing applications, they also expect immediate approvals and disbursement.
When a financial institution is able to offer quick financing, customers are more likely to remain loyal. Shopping around will still play an important role in their decision-making, but nothing beats the experience of getting their financing processed and disbursed within a day.
Fintech outfits in Malaysia often have a deep understanding of unmet customer needs. Just like their millennial consumers, the people that make up these companies are born into technology. This is the secret to their success, the difference that allows them the agility to quickly solve the pain points of the customer.
Also, these same outfits have a quirky habit of foregoing disruption in favour of innovation — specifically to complement existing financial services. They have the technology, and incumbents have the money and clientele. It’s a match made in heaven.
It’s still worth pointing out that financial institutions can make the connection to the customers themselves if they understand the true core of a modern customer's needs.
Understanding True Convenience — The As Sidq Way
There is a fundamental misconception that when customers ask for more convenient services, they're simply asking for banking services to be made available 24/7. The logic is sound: customers often complain about lining up at the bank or not having the flexibility of banking at their own convenience.
The truth is, no matter how your customer interacts with you, what customers truly want is interconnected, seamless and customised services based on data collected about them.
Again, when they apply for personal financing, customers want transparent fees and ease of repayments. They don't like to be subjected to dealing with all of the different stakeholders in their financing application process, having to input the same information over and over again, which incidentally results in a time-consuming process.
To know these needs is to utilise data that they have willingly given by interacting with your platforms to build a profile of their preferences.
As Sidq Digital Straight Through Processing (STP) could come in handy to help many of the processes that stop a bank from offering seamless financing. The STP can be integrated seamlessly into core banking services, with a goal of faster application turnaround times using automation.
As Sidq Straight Through Process is an ongoing curation of our own version of a front end for banks. The front end can retrieve any input from the bank's digital touchpoints, be it a website or mobile app, then pushed automatically through our origination system to eliminate the time taken on data entry. We are fully Shariah-compliant, which means that we offer additional tawarruq capabilities, using digital assets to quickly process the tawarruq trading process.
Data collection and analysis of the STP platform is also done automatically, to a specific enough point that our banking partners can discover the segmentation, demographic and profiling of its applicants.
We hold end-to-end servicing as a principle, and we can subsequently help you serve your own customers with end-to-end seamless services. There is no need for a bank to fully overhaul its infrastructure as long as it overhauls its perception of the modern consumer, which is a middle ground that we are happy to serve.