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Go digital or go home: How technology enables the future of banks

By Wirecard Editorial Team
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A lifetime of loyalty to a single bank? Not anymore

The banking and finance industry is in the midst of a massive upheaval. Digitalization has brought countless opportunities that are increasingly shifting customer preferences: More and more customers are willing to switch banks, and modern digital services such as online banking and user-friendly banking apps are key criteria when choosing their financial institution. Today, even established players are creating modern, user-friendly solutions through the intelligent use of technology - and as a result, inspiring their current customers, winning new customers and standing up to the competition. It's true: Banks need to seize the opportunities offered by digitalization and therefore secure and shape their own future.

The alienation of bank customers

Before looking into the future, let’s take a look at the past: Which banker doesn't remember how it used to be?

Once upon a time, people regularly visited the counter of their local bank to withdraw money, make a deposit or transfer, and then even stay for a little chat. Their bank was often their parents' and grandparents' bank, and they usually remained loyal to it for their whole lives.

Photo by Museums Victoria on Unsplash

Soon after, cards and ATMs were introduced, on the one hand to save personnel costs, but also to give customers access to banking services outside of the regular opening hours. The introduction of online banking had the same purpose – both because digital remittance slips are more cost-efficient than handwritten ones, but also because online banking saves customers precious time.

However, this also meant that banks had less and less direct contact with their own customers, and if a customer were to hear anything from their bank, it would be a letter or email communicating another fee increase or promoting investment products. What traditional banks often neglected to do was to offer their customers truly practical, modern solutions.

The readiness to change banks is higher than ever

Soon after, the age of digitalization began. Direct banks, or banks without branches that offer their services remotely, were the first to understand the huge potential of digitalization: The possibility to offer truly customer-friendly, innovative solutions along with a very low cost structure that made it possible to offer many great services to customers, free of charge. Digital services are now a must-have: A 2018 survey by Forrester asked European adults how often they do the following activities (monthly or more):

  • Bank online: 70%
  • Bank via ATM: 65%
  • Bank on a smartphone: 34%
  • Bank in person at a branch: 22%
  • Followed by banking on a tablet, over the phone, and on a smartwatch (all under 20%)


Why the race for traditional banks is far from over

“Too big to fail.” This is what was thought of large companies. Now, even the largest and most powerful corporations have long since realized that this no longer applies. At least, since the demise of Nokia.

Source: Forbes

At Wirecard, we work with many traditional banks on a daily basis. It is clearly understood that they have to learn from the competition, with technology being the key to this. What banks need to do first is a change their mindset: Years of planning and development to finally present their customers with the "perfect all-in-one” digital solution is not the right way.

And the way projects are approached and defined must also change. Any failure to achieve a previously defined goal is still a success, because: I have learned how not to do it.

Since the neo-banks already have a considerable lead, speed is of the essence. And instead of the all-encompassing solution, there are lean, intuitive solutions, whose functions can be regularly expanded. And one must also learn this from new banks: If a solution does not work smoothly right away or is not accepted enthusiastically by customers from day one, then it is often considered a "fail" – but from my point of view this is actually just an abbreviation for

First Attempt In Learning

Or metaphorically speaking: If you want to develop a mobility solution from the drawing board, you can of course give yourself 10 years’ development time:



But in the meantime, the more agile competitors have long since taken over market share because they offered other solutions much earlier:



Some practical examples of banks that have reinvented themselves thanks to digital technology

Here are a few concrete suggestions from banks that have developed new, smart solutions thanks to the intelligent use of technology:

  • Bankomo: A mobile solution that promotes financial inclusion


Reisebank, via its Bankomo brand wanted to offer its customers a modern, mobile banking solution that could be used internationally. Together we developed an entirely mobile solution, available in 12 languages.

  • Orange: From mobile phone provider to bank


With the right partners and the smart use of technology, it’s even possible for non-bank entities to offer modern and successful payment and banking solutions.

A practical example: Telecommunications provider Orange wanted to enable its customers to make mobile payments by smartphone at the POS. And so the Orange mobile payment solution was launched, which was very well-received by customers. Soon we added loyalty solutions, allowing customers to receive discounts and benefits every time they paid. Due to its massive success, a bank was established together with Wirecard: Orange Bank, which had a very successful launch in France in 2017.

Source: Orange

Payment is not sexy. Neither are wire transfers. Try to create digital solutions where features are in the background and the positive experience is in the foreground. Talk to your customers again, because they should always be your focus: What is your primary need? Leave your comfort zone and approach the projects differently. Do not define a “not 100% achievement of objectives” as a failure. Cooperate with other service providers and consider whether you really have to do everything in-house or whether you can't benefit from the experience of others. Use the trust that customers have in you and give them digital solutions that reward their loyalty and their business.

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