Digital Banking – Are you in the right path?
Be a Digital Bank, don’t say you are one…
-Brett King, Industry Expert
Brett King has been one of the few people advocating digital banking long before it was fashionable. In a ‘not so recent’ blog, he pointed out a scorecard for banks who think they are digital banking. Check it out if you haven’t already.
Becoming a digital bank is on the lips of every banker worth their salt these days. However, most of them draw the line at being able to provide services on a digital platform. Being part of one of the companies deemed the leader in enabling an omnichannel experience orchestration; this is definitely much welcome news. However, digital channel is not the only component for a truly digital bank.
Being able to truly transform yourself into a digital bank means you have to inherently become digital. As Brett puts it in his blog – ‘Everyone’s job is digital’. Especially for a corporate bank, digitalized channels are probably a very small benefit to the clients. Therefore, most corporate banking segments think they are quite separate from the digital bandwagon. Comparing the complexities of corporate banking with the simplicity of a digital environment might seem counterproductive to corporate and FI bankers.
However, the Boston Consulting Group’s recent survey of corporate-banking customers worldwide shows how wrong these assumptions are. Corporates are not only open to transacting and liaising with their banks over digital platforms but also a majority are willing to switch—and even pay a premium—to work with banks capable of delivering the type of integrated, omnichannel service they’ve grown accustomed to in other spheres.
Corporate banks need to come up with a clear digital strategy and execute it immediately. However, there are still roadblocks which need to be tackled before a bank can approach a digital strategy. Some of them include:
- Legacy Systems – Banks find it difficult to change their legacy systems to deliver the best possible digital experience
- Product Prospecting – Banks require smarter and high investments to bring in the right technological advantages
- Risky Transformation – As per Tower Group, risk associated by converting a core system is highest in banking (43%) because of the complexity and expense associated
- Integration Woes – Integration capabilities with other banking process is a huge challenge for banks
Tackling these will be the first step in the right direction for banks who want to go the digital way.
The best way to tackle these challenges, short of an entire overhaul, is to add a middle orchestration layer which can translate between the customer facing and the system layer – this will allow banks to cater to the digital requirements without taking huge risks.
Some corporate banks have already achieved this with use of products like Xelerate. Others are following suit.