Banks are under increasingly pressure to instigate radical change to their retail operation. Competition from new entrants and the rise of the digital consumer is leaving banks with a stark choice: Pioneer or Perish! Traditional banking is still largely regarded as a stodgy, unimaginative industry whereby payment pioneers like Google, Square and Paypal are reinforcing this perception with cutting-edge financial services that boast inspiring design and advanced usability. So how can banks recapture consumer hearts to maintain their share of wallet?
The Future Bank will have to innovate and even replicate the user interfaces brought to the market by agile new players if they are to remain competitive. With the banks still owning accounts, they need to leverage this asset and turn their business into an engaging enterprise that delivers compelling customer experience.
The 3 things retail banking executives ought to consider for future bank design
- Distribution channels are diversifying, becoming connected and social whilst traditional channels still persist. Banks need to embrace omnichannel retailing to cater to different customer preferences. Channels need to be seamlessly integrated and accessible instantly. While mobile is undoubtedly disrupting the delivery of financial services, it is also presenting new opportunities for in-branch innovation and customer engagement. This fusion of mobile and mortar is how banks can redesign the delivery of financial services and payments.
- When internet banking emerged, fraud moved online. Now that mobile is starting to dominate banking services and soon to dominate payments, fraudsters are likely to shift to the Smartphone. In a recently survey conducted by Terrapinn's Cards & Payments Middle East Team, we found that 0% of Telcos surveyed thought that securing OTA transactions was the greatest challenge in bring NFC to market. However 11% of retail banks surveyed cited this as their greatest challenge. (Download the full market report here) Questioning the safety of the mobile device for transactions often is initiated at the
consumer level. Banking has traditionally been faced with greater security hurdles than the Telcos industry, as the keepers of accounts and extremely sensitive customer information. This result is indicative of banks still being weary of the mobile platform as a secure replacement for the card. So do banks simply need reassuring or is tackling mobile fraud the next frontier for retail banking?
- Retaining customers, whilst always a priority, is bound to get more attention in 2013. Not only are consumer expectations around their banking services rising, but competition from new entrants has challenged the banks to up their game. Typically banks have been more concerned with transactional security and efficiency over interface design. However with customers drawn to the "one tap" services created by payment pioneers, banks will have to go back to the drawing board to redesign services and payment infrastructure to drive customer uptake.
Image Source: The Emotion Machine