Digital banking: enabling growth in the new normal
The COVID-19 pandemic has radically changed our businesses, industries and communities in unimaginable ways. The situation that unfolds on a daily basis has forced each of us to learn and adopt ways to respond to the ongoing crisis. However, the disruption in the banking sector has caused a massive transformation in the way consumers do banking.
Banks have invested heavily in digitizing their operations and have become more adaptable than others to respond to the transformations induced by COVID-19. As people start to adjust to the ‘new normal’ trend. It appears that digital banking is well on its way to being adopted around the world.
And this emerging trend will soon create massive demand for remote banking services. That is why you should start offering remote banking services by creating a remote banking solution for your business.
In this blog, we will discuss with you in detail how digitization will be a growth catalyst for the banking industry. So let’s dive into the details without wasting a lot of time.
Reinventing the digital bank after the COVID-19 pandemic
Staying productive and maintaining continuity is becoming the number one priority for a majority of banks in the digital age. And after the COVID-19 pandemic, this priority has become a huge need for banks as there is a huge transformation due to the need to avoid direct contact.
And that is why banks have opted for a pragmatic approach by digitizing their operations. However, digitization is not the only thing banks are looking for, there are also other reasons why traditional banks should go for a digital banking solution:
Acceleration towards “contactless” trends
More and more banks are turning to digital turf due to the COVID-19 pandemic to gain an edge over the competition. Therefore, the banking industry exploits the variety of digital services through mobile banking, open banking and WhatsApp banking.
Talking about the growth of the segments mentioned above, we can say that all of these segments have huge potential. According to a Business Insider survey, around 89% of respondents said they actively use mobile banking. According to Statista, open banking users are expected to reach 132.2 million (approximately) by 2024. In addition, approximately 49% of banks have an omnichannel strategy according to Banking Hub.
Apart from this, WhatsApp has also decided to enter the banking industry. According to Finances Online, WhatsApp has over 2 billion users (approximately) in 2021, making it the best choice for banking services.
Strengthening the customer relationship through digital tools
Consumers leaving and choosing a new bank are a growing trend after the pandemic. This signals the need for banks to obtain more long-term resources and build relationships with their customers.
An industry founded on simple human connection in branches, banks and credit unions faces the challenge of keeping consumers engaged in an era of digital banking and social distancing. Part of building consumer loyalty in this changing environment is providing great tools, resources and services as part of the customer experience.
Adoption of cybersecurity tools
During a pandemic, digital payments have peaked as customers seek ways to avoid direct contact. Nowadays, banks are using innovative tools to provide a secure payment experience for customers. And one of the most widely used methods of securing payments is card-less ATM withdrawals.
Apart from that, there are also other methods that you can use to secure payments. On top of that, banks have started integrating biometric authentication and AI-enabled verification into their mobile banking solution for a secure payment experience.
Changes in the customer experience
The digitization of the bank is reshaping the customer experience by moving towards a consumer channel. COVID-19 has the potential to revamp high-impact digital journeys in banking, such as customer onboarding and product creation, to deliver a truly exceptional digital experience for their customers.
This has opened the doors of digital banking to customer segments that are not as tech savvy as other segments. Banks these days cater for almost all ages of customers, from millennials to the older generation.
Harness the power of microloans
Microcredits are like a boon for the unbanked population who do not have a bank account but have a smartphone. The reason behind this is that micro loans give individuals the money needed to develop a small business or to cover some growing costs.
Financial service providers can use microcredit to provide such services which have incredible growth potential to attract investors. In this way, they can highlight the use of information from potential borrowers to assess their creditworthiness.
Digital banking is on the cusp of a huge transformation these days. This is the best example of practical banking experience. Consumers around the world are already loving this new, fast and convenient form of banking. In addition to this, the enormous growth of the telecommunications sector has established a roadmap for the growth of the banking sector.
Additionally, the future of digital banking looks bright as emerging FinTech unicorns make foray into digital finance markets. And this is explained by the growing demand from customers for easier access to banking services. However, banks must act now with improved technological skills and digital services to meet growing consumer expectations.