If you are a banker, technical, representative or most notably a client in BFSI Segment, I would take it for granted you need to have listened to the brand-new buzz word "Digital Financial". In my circle, I did conversation with a number of people and also interestingly, no two individuals seem to view this in very same way - well, this is kind of overestimation, yet you understand! This made me take a time out and believe what this can imply to somebody like me who is an expert in the market, to address if a colleague, close friend, or someone at my box asks me regarding this. As a true CrossFit professional athlete I comply with at least the very first policy - inform everybody you come across about CrossFit.
The reason I raise CrossFit is not just because of my attraction or, also obsession. CrossFit is a little facility as well as discouraging to those unaware, however to put it merely it is toughness as well as conditioning program, which enhances physical fitness. CrossFit defines health and fitness itself in terms of 10 components - Cardiovascular Stamina, Endurance, Flexibility, Toughness, Power, Speed, Agility, Coordination, Accuracy, Equilibrium. But, typically if you ask any of your pals what is health and fitness, you might obtain multiple reactions. E.g. a runner will state capability to run half-marathon, or a weight lifter might claim deadlift of a minimum of 1.5 x body weight, or a person into sandstone perth yoga may say doing 108 Suryanamaskaras. Well, each of them might be right in their own way. Your definition of health and fitness may be doing all of those, or you can just claim I am healthy sufficient if I have the ability to do my 9-to-5 job without taking any type of authorized leave in an appraisal cycle.
On the very same lines, banks might translate Digital Financial in their very own terms and also in a similar way, people like you as well as me will certainly have formed some viewpoint based upon our very own direct exposure.
Throughout the years, financial institutions of all shapes and sizes optimized a lot by adjusting to IT/ ITES (IT Made It Possible For Solutions) and they have accomplished different levels of success. Nevertheless, as a result of lack of concentrated as well as longterm method, creation of disjoined systems, swiftly transforming service as well as operating situations, and so on, the desired objectives could not have actually been totally understood. Several of those " stopped working" campaigns might have been driven by the organization's urge to be an early adaptor of a innovation or fad (betting on a incorrect horse). On the contrary, we could shed a substantial opportunity, if we don't recognize and bank on a winning steed. So, the technique is banking on the ideal steed, at a correct time - i.e., when the odds are reduced. Normally, industries use what is called a Buzz Cycle to examine a brand-new technology or trend. If you are interested to recognize what is a "hype cycle", please see Gartner's approach. I will attempt to string with each other a few of the key aspects of Digital Banking, as unlike the majority of the buzzwords, it is neither a single service neither a innovation.
Simply around the moment (2008-10) I spent about a year plus in Brussels, 3 big banks (Fortis, Dexia and also KBC) which always found as very risk averse bankers from the BeNeLux region, began dealing with major pressure as well as their value eroded dramatically and also caused warmed debates in the area - who thought their money is constantly risk-free with the banks (either as a depositor or share owner). What actually took place there, is very complicated. Key factors being, significant sovereign financial obligation floating in between 84 to 99% of GDP, lack of Federal government for 533 days, etc. These caused liquidity problems. If you add to this other turmoils in the banking industry globally, it is very easy to understand that the " depend on" within the system was under threat. Exactly how would certainly we build depend on? By being clear. Customers require (not want!) openness in the whole system. Younger the client base, that require felt is much more acute. This, when you look from the changing client experience and also assumptions from retail industry ( Amazon.com, Flipkart), transport (Uber, Ola), food market (Zomato, FoodPanda, ZaptheQ), you recognize where the banking industry is. Consumers have reset the expectations in terms of worth, experience, as well as alternatives. The Trick takeaway for the lender - User Experience - rich, consistent, mobile (anywhere), secure, boosted worth.
Many individuals I have connected with recently on this topic, believed Electronic banking or Mobile Financial as Digital. Yes, this is just the start of what could be Digital Financial. Most likely, they cover earlier set of client expectations. Carrying on, could we see a day soon, where there is no paper in any of the banking transactions? When I say paper, I am not simply describing money! Couple of things which are currently in practice in couple of banks as well as acquiring momentum throughout are - digitizing procedures within the bank (like client on-boarding, loan application), cheque truncation systems which allows you to take a picture of the cheque on your mobile and also send to your financial institution, and so on - there by bringing effectiveness in decisionmaking, capability to customize procedures to particular client demands, save some unneeded journeys to the branch, and so on. This can mean in other words, applying record/ image management systems, organization procedure administration as well as surveillance systems, integrating these components within the existing IT services. The Key - digitizing internal procedures.
Social network in the last couple of years have actually brought largest impact across borders - be it, Tahrir Square transformation, Ice Container Challenge, which mobile to get, exactly how we order and also spend for lunch or determining a great eating location and going Dutch while sharing the expense. Social Media is currently bring interruptions in terms of which financial institution to count on, what they can anticipate from a bank in terms of solutions, offer a voice to their dissatisfaction. Which subsequently means, banks need to get on the exact same Social media site listening to their consumers, offering their services and additionally eventually, bring in brand-new clients, keeping the customers and even more importantly, becoming "The Goto Bank" if the customer has several accounts. As an example, what can not have been expected few years back, in Kenya, among our respected client's Twitter handle (@ChaseBankKenya) utilizes Twitter to attach, launch and share CSR tasks, and also address clients' queries and also problems very efficiently. That is, The Reach element.
One more 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.