How should banks approach scalability, robustness and security expected by the Omni-Digital Customer

WeChat, Tencent’s super app has been adding 20 million users each quarter. Currently, it has over one billion monthly active users. 

Similarly, Kakao Bank, one of the first digital-only banks launched in South Korea, boasts of phenomenal growth from 300k subscribers just after its launch in 2017 to more than 10 million customers today in just two years. The digital natives’ behaviour is being shaped and influenced by simplicity, accessibility, time-saving, and ease of use of platforms offered by the new-age fintech companies.

This accelerated adoption of digital channels to perform banking activities and transactions are reflective of the general trend of consumers moving from physical to digital channels.

This has given rise to a new set of customers: omni-digital customers.

As per a research report by PWC,  this group represents 46% of the global banking customer base, establishing the need for banks and other financial institutions to adapt their strategies to cater to this growing segment. According to a recent global survey by CGN group, 68% of banking customers are expected to convert to omni-digital consumers by 2020.

With customers rapidly moving to digital-only channels to perform their daily activities including banking, banks need to not only provide more digital banking services but also ensure that the entire customer journey is frictionless, secure and delivered on their channel of preference.

Who exactly are the Omni-Digital Customers?

For starters, they prefer every single engagement is done online and digitally for the consumption of a service. For example, they consume banking services through many different channels including mobile, tablet, desktop, kiosks and the recently evolving conversational channels such as chatbots or voice assistants.

The Omni-Digital Customer is here. And you need to be ready to scale from 5000 to 5 million in a heartbeat to meet their expectations.

Why do you need to be ready to scale from 5000 to 5million in a heartbeat?

In addition to the increasing expectations of omni-channel banking solutions by customers, banks will continue to expand their channel reach through partners, especially, in the area of payments.  The channel expansion and reach provided to consumers only heightens the urgency to have in place a digital platform that scales quickly.  While not a requirement, many banks will leverage their digital banking platforms to expose the APIs necessary to be consumed by partners. You are therefore presented with a challenge on how do you anticipate demand for your services and how will that demand grow? At times, regulatory decisions such as demonetisation that happened in India in Nov 2016 can help peak that demand very quickly. Hence you must be ready to scale your systems from 5000 to 5 million in a heartbeat.

How do you achieve the scalability, robustness and security expected by the Omni-Digital Customers?

You need to invest in a best-in-class digital engagement technology platform. There are three key attributes that you need to think about for such a platform:

1. Think Scalability

You need to consider proven scalable technologies. They should also allow any software services developed to be leveraged across different channels hence promoting software reuse. Microservices is ideal for addressing scalability challenges.  However, scalability must be looked at in totality.  Meaning, if you have the ability to scale your payment transactions, such as P2P payments or bill payments in your digital channels, but your back-end systems are not also scaling to handle the volumes, then you’ve only solved one part of the scale problem and ultimately, this will impact the customer experience.

2. Think Robustness

You need to consider how to provision for high availability and protect against failover. There are also options to think about across both on-premise or cloud deployments. Application server and container technologies both provide good robustness options for the platform.  In addition, digital platform providers should be thinking about the optimal design of business services delivered using microservices technology to provide maximum robustness of functionality.

3. Think Security

You need to consider how to ensure end-to-end security for the digital engagement flow regardless of which channel it originated from. Then consider also channel-specific protection threats such as rooted device access and overlay screens on mobile which presents a different set of security challenges. Having a set of best in class security patterns build into the platform provides a good assurance.  Security must be part of the overall design and not an afterthought.  From the initial design, security features can be provided without sacrificing scalability and a negative impact on the customer experience.