Emerging new technologies and changing consumer habits and expectations of response are changing the paradigm on which financial institutions have based their success.
The regulated market, the natural requirements to reach a maximum number of consumers through face-to-face channels (the agencies), services offered only possible at the counter, the “closed” data and payments management, the checks are all a reality, which makes it more difficult to compete in the current market, where digital has become the norm and where new rules of operation have opened up financial services to new competitors.
Currently, interaction is done on a mobile application or on a home banking page. Traditional financial advisory models are quickly being replaced by proactive consumer research and analysis where the consumer gets to know, learns about and compare online before questioning their institution of reference, and they quickly change if they feel they are getting a below standard service.
Disintermediation has been transforming the traditional space for financial institutions and the way we make payments, with an increasing number of transactions made by organizations specializing in online payments, and even one of the main changes for a banking institution is the existence of credit to buy a home which has become less and less of a problem, as the transition rules have become easier and more agile.
New consumers, like the so-called digital natives, also expect financial institutions to respond to their new models of interaction and lifestyle. Finally, regulation has created new challenges that require more of systems and processes.
As one would expect, this challenge also creates a vast array of opportunities for institutions that are faster and more agile taking advantage of this new reality, including using technology to compete more effectively. As the new technologies, coupled with regulation, allow the entry of new players into the market, who are more agile and based on digital paradigms. This is an extraordinary time, as expectations are being redefined and, as a consequence, the scope of services provided by financial institutions is broadened.
A substantial part of this change is about the digital transformation of businesses, in which sectors such as retail and telecommunications pioneered the implementation of omnicanal solutions, which have created new expectations for consumers, who expect from their financial institution the same levels of sophistication and personalization. The more agile institutions that are able to create a more sophisticated, integrated and personalized user experience will be the ones who will be successful in this new paradigm.
From a technological point of view, there are no limitations regarding the digital transformation process of companies, relating to devices and communications as in software components. Nowadays, mobile phones have more data processing and storage capacity than the most powerful personal computers of five years ago and the software is developed through productivity platforms that reduce delivery time to a 1/3 of what it was normally required.
Thus, the framework that the industry is going through, in an era of economic recovery, creates unique opportunities for the transformation of organizations, in a customer-centric logic in which the experience of interaction is a fundamental aspect. What is the path, what strategy to follow, how to serve each customer profile, what technologies to implement and how fast to implement them and how to define the processes that ensure that all these changes translate into effective service excellence for clients; this is the new challenge to which banks must respond.