With digital giants entering the industry, the financial services market has become extremely competitive. Digitization in banking, has made it very easy for customers to switch banks or become multi banked. This has peaked digital expectations in consumers leaving the traditional banking brands vulnerable. Though, traditional banks are striving to provide a number of services digitally, providing round-the-clock services similar to digitally savvy banks is still farfetched for traditional banks.
The loyalty of customers towards more than one product is the biggest challenge today for banks. Retaining customers to use value-added services beyond a salary or saving or credit card account is very tough with so many options available around.
For instance, you have your credit card from Bank A, your home loan from Bank B, your savings account/salary account in Bank C and your investments/insurance/mobile money from either Bank D or E. This diversity is a challenge for banks to get what we term as ‘Whole-Of-Bank’ loyalty from a customer. Today, banks are joining hands with Fintech companies/ FIs which in yesteryears were considered competition.
The best example of creating overall customer loyalty is Apple which came up with a suite of digital gadgets to strengthen a customer relationship across a bouquet of its offerings. Banks can replicate this model by offering variety of banking services and other support services like insurance and investment options including mutual funds, stocks, and IPO applications in a single place by creating a personalized digital banking platform. With a rapidly enhancing digital environment in the banking industry, there is a high demand for personalized banking services from customers globally.
How Can Banks Drive Customer Loyalty in a Digital World?
AI and machine learning are facilitating the path to create customized digital solutions for banks today. Banks are reducing the investment on branches but spending more on enhanced digital presence with smart devices penetration increasing across all geographies. AI and digital apps empower banks to offer services 24/7 and are available when the customer needs it. It removes national barriers and keeps infrastructure costs under control which thereby enables banks to pass this benefit to customers.
Another important factor is creating user-suited UI experience. It’s not just enough to create a UI but a customized UI with the help of AI along with personalized offers suited to the user. By simulating personalized experiences for customers, banks and financial brands can enhance their market share and build retention through a loyal customer base.
Embracing Digitization to Survive in the Banking Industry
Banks that still consider digitization a threat and disruption of their business cannot survive in the industry. Whereas the banks that consider it as a huge opportunity to evolve and embrace digital developments will ultimately win in the market. Traditional banks that are embracing digitalization have a huge advantage as they can bring their long-standing history of experience and trust into the digital age and create propositions and experiences that attract and retain loyal customers.
The most effective way of digitizing cost-effectively and impact is to partner with a technology expert who can create seamless digital experiences. Panamax’s Digital Financial Solutions enable banks in leveraging the latest technologies to deliver best-in-class services that significantly drive down the costs while unlocking new business opportunities. It provides a futuristic mobile financial service that simplifies online transactions and drives financial inclusion for the unbanked and underbanked across the globe.
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Contributing Writer: Harshita is a Content Writer at Panamax. Inc. MBA in HR & Marketing, she found her calling in Content Writing. In a short span of 2 years, she has explored writing in different styles of content like Coffee table books, website content and for media. In her time of leisure, she finds happiness in binge watching classics & practicing yoga.
