The Customer Conceptualizes a Digital Bank

Conventional banking is undergoing rapid transformation because of technology changes happening across the globe. The trusted brick and mortar infrastructure in which all transactions occurred through the branch network is making way for a model of multiple channels of transaction, from internet and mobile to wallet and card. The turnaround time for processing each transaction has drastically reduced, as has dependence on bank timings. Traditional products, including deposits and loans, are paving the way for innovative offerings, such as derivatives/structured products etc.

Customers are becoming more aware by transacting on their own using digital channels. Earlier, bank staff used to advise customers on how to effect a transaction, but not anymore. Today’s customers are not required to visit the branch except in special cases and can fulfill most of their requirements remotely through digital channels. By putting up more and more service types and transaction options on digital channels, banks have enabled customers to become more knowledgeable about regulations, transaction reversal, exceptional transactions, security, and the impact and consequences of all this.

Various banks have provided digital platforms to customers where they can create their own cards, products, services and account numbers with a few clicks. This is the next step of self-service banking where customers can configure banking options to suit their needs. Customers can also use the channel for setting personal financial goals. Technology and digitalization have culminated in the end customer doing banking transactions on their own. There are various platforms available to compare and choose competitive offerings and services. The usage of smartphones and other digital channels is ever increasing, which makes it imperative for banks to expand the offerings in the digital arena to ensure exceptional customer experience.

Hence banking is fast becoming a technology platform with customers running transactions rather than bank staff doing it for them. Except for controlling security aspects, processing end of day operations, and running some schedulers, bank staff have ceded control over most routine activities to the customer. Today, self-service transactions far outnumber assisted staff transactions, especially in urban and metropolitan cities. The branch and operations center are progressively becoming sites of back office activity, such as administration and management information reporting, with added responsibility for defining controls, compliance and adhering to regulations.

To conclude, the banking digital platform has evolved to a state where customers can conceptualize and “run the bank” to define products, services, accessibility to channels, rules and workflows without depending on others. With Blockchain and distributed ledger technology getting popular, dependence on payment gateways and regulators will drastically reduce and lead to more peer to peer payments. Banking will finally evolve to a shape and form wherein each customer will create a “Concept Bank” on their own using centralized technology platforms, which are interoperable. The platforms could be owned by a single bank or a consortium, with specific rules and frameworks for creating individual Concept Banks. In the meantime, banking will evolve, innovate and find new ways of providing differentiated customer experience using digital channels or any other mode to find its way.