If you are a banker, geeky, agent or most importantly a consumer in BFSI Sector, I would certainly take it for given you have to have heard the brand-new buzz word "Digital Financial". In my circle, I did chat with several people and surprisingly, no 2 persons appear to view this in very same manner - well, this is kind of overestimation, however you get the picture! This made me take a pause as well as think what this can indicate to a person like me that is an insider in the industry, to answer if a associate, buddy, or a person at my box asks me concerning this. As a real CrossFit professional athlete I follow at the very least the initial guideline - tell everybody you encounter regarding CrossFit.
The factor I raise CrossFit is not just because of my attraction or, also fixation. CrossFit is a bit of complex and intimidating to those uninitiated, however to put it simply it is toughness and conditioning program, which enhances health and fitness. CrossFit specifies fitness itself in regards to 10 elements - Cardiovascular Endurance, Endurance, Versatility, Strength, Power, Speed, Agility, Coordination, Accuracy, Equilibrium. Yet, usually if you ask any one of your buddies what is health and fitness, you may obtain several reactions. E.g. a jogger will say capability to run half-marathon, or a weight lifter may state deadlift of at the very least 1.5 x body weight, or a guy right into yoga exercise could say doing 108 Suryanamaskaras. Well, each of them might be right in their own means. Your definition of physical fitness may be doing all of those, or you can simply claim I am healthy enough if I am able to do my 9-to-5 job without taking any kind of sick leave in an assessment cycle.
On the very same lines, financial institutions might translate Digital Banking in their own terms and likewise, individuals like you and me will certainly have formed some opinion based on our very own exposure.
Throughout the years, financial institutions of all sizes and shapes maximized a lot by adapting to IT/ ITES (IT Enabled Solutions) as well as they have achieved different levels of success. However, because of absence of concentrated and longterm approach, creation of disjoined systems, rapidly transforming company and also running situations, and so on, the intended goals may not have actually been completely recognized. Several of those " fell short" initiatives might have been driven by the institution's impulse to be an very early adaptor of a innovation or fad ( banking on a wrong horse). As a matter of fact, we may shed a massive chance, if we do not identify and bet on a winning steed. So, the method is banking on the ideal equine, at a right time - i.e., when the probabilities are low. Generally, sectors utilize what is called a Buzz Cycle to evaluate a new innovation or trend. If you are interested to understand what is a "hype cycle", please see Gartner's approach. I will certainly attempt to string together several of the essential elements of Digital Financial, as unlike most of the buzzwords, it is neither a single service neither a technology.
Simply around the time (2008-10) I invested concerning a year plus in Brussels, 3 large banks (Fortis, Dexia and also KBC) which always stumbled upon as extremely danger averse bankers from the BeNeLux region, began encountering major pressure and also their value eroded considerably and also activated warmed debates in the community - that believed their money is constantly secure with the banks (either as a depositor or share owner). What truly happened there, is very complex. Secret elements being, huge sovereign financial obligation hovering in between 84 to 99% of GDP, absence of Federal government for 533 days, and so on. These caused liquidity concerns. If you add to this various other upheavals in the financial market around the world, it is simple to recognize that the " count on" within the system was under threat. How would certainly we develop trust? By being transparent. Consumers need (not want!) transparency in the whole system. Younger the consumer base, that need really felt is more severe. This, when you look from the changing customer experience and also expectations from retail industry (Amazon, Flipkart), transport (Uber, Ola), food industry (Zomato, FoodPanda, ZaptheQ), you know where the banking industry is. Clients have reset the assumptions in terms of worth, experience, and also options. The Trick takeaway for the lender - User Experience - abundant, consistent, mobile (anywhere), safe and secure, enhanced value.
Lots of people I have communicated with just recently on this topic, believed Electronic banking or Mobile Financial as Digital. Yes, this is only the beginning of what could be Digital Banking. Probably, they cover earlier set of client expectations. Proceeding, could we see a day quickly, where there is no paper in any of the financial transactions? When I state paper, I am not simply describing money! Few points which are already in practice in couple of banks and also getting bank acc momentum throughout are - digitizing processes within the bank (like consumer on-boarding, car loan application), cheque truncation systems which permits you to take a photo of the cheque on your mobile as well as send out to your financial institution, etc - there by bringing efficiency in decisionmaking, capability to tailor procedures to certain consumer needs, save some unnecessary journeys to the branch, and so on. This can mean simply put, applying file/ image management systems, company procedure monitoring as well as tracking systems, incorporating these parts within the existing IT services. The Key - digitizing internal processes.
Social media site in the last couple of years have brought most significant effect across boundaries - be it, Tahrir Square change, Ice Bucket Difficulty, which mobile to acquire, just how we order and also pay for lunch or recognizing a fine dining area as well as going Dutch while sharing the expense. Social network is already bring disturbances in regards to which financial institution to count on, what they can anticipate from a bank in terms of services, offer a voice to their discontentment. Which consequently suggests, banks have to get on the same Social Media paying attention to their consumers, marketing their solutions and also inevitably, attracting brand-new clients, maintaining the clients as well as even more notably, ending up being "The Goto Financial institution" if the client has numerous accounts. As an instance, what can not have been expected couple of years back, in Kenya, among our prestigious client's Twitter manage (@ChaseBankKenya) utilizes Twitter to link, launch and share CSR tasks, as well as address customers' questions and also worries very successfully. That is, The Reach aspect.
An additional silent thing happening behind the walls in a bank is called Data Analytics or Big Data. These churn out unprecedented insights into customer behavior and preferences, driving extremely focused strategies. These also help customers to understand their spend analysis, plan their budgets, financial goal management etc
. Apart from these key components, there are several others which could make the bank more "digital" - chat and video discussion facilities to bring bank closer to the customer when he/she needs it, or educating customers through online tutorials like financial literacy, tax planning, etc, integrating various solutions and systems in the bank to reduce data replication and redundancy and helping the bank make more Straight Through Processing systems there by reducing errors, cost of operations, and increasing efficiency in the entire system. Banks could significantly increase seamless data exchange with others partners like regulatory bodies, clients, government bodies thus making entire process much more transparent and efficient.
Finally, the big question is what should be achieved from the big task list to call a bank "Digital Bank"? Just like in fitness, there is no single solution or the right solution. Each bank has to define its own strategy, execution plan to reach the goal of customer delight, operation efficiency, and overall share holders' enhanced value.
With our sharp focus on Core Banking Solutions, and wide range of experiences in consulting, implementation, testing, integrating several solutions at various banks across the globe, we at Bfsi consulting will be glad to engage with you or your team to help realize some of these goals.