Big Tech is term that has been coined to describe the top players in the global tech space. From Google and Amazon to Facebook and Apple in America to Baidu, Alibaba and Tencent in China, these companies have an enormous amount of influence, they’re incredibly tech savvy and they have a massive customer base. They also happen to have a whole lot of one of the globe’s most valued assets – data. And they’re using all of this information to expand their reach and move into new markets, including financial services.
Sure, competition is part of running any business but with modern consumers demanding immediacy and frictionless interactions, the financial services industry – which is made up of businesses that are still working on their digital realignment – are key targets for disruption. Any of these tech bigwigs have bank accounts so big that they wouldn’t be afraid to stand toe-to-toe with some of the biggest banks in the world and offer their customers all kinds of innovative and fresh financial products.
So, how should the traditional banking industry prepare for Big Tech’s big move into financial services? Below are our five top tips to guard your banking business against disruption
#1 Embrace tech innovation: Legacy systems can impede the flow of information and prevent banks for serving their clients with the immediacy and omni-channel experience modern consumer’s demand. Becoming a digital bank not only streamlines operations, it also enables 24/7 availability.
#2 Up cybersecurity efforts: If you look at any of the many cyber attacks that have affected some of the world’s big brands you’ll notice that hackers have a way of finding creative ways to exploit vulnerabilities. As banks start to embrace tech innovation, it is critical they build security in to all aspects of their new online and digital offerings. Keeping customer information safe should be a top priority for any bank looking to embrace digital transformation.
#3 Develop a digital signature: If you’ve ever had to complete stacks of paperwork in order to open a new bank account or to apply for a credit card, you’ll understand the how frustrating it can be to fill out the same information over and over again. By “eliminating paper” and going digital, banks can centralise all customer information, making it easier different business units to access this data if and when they need it.
#4 Say hello to big data: We’ve already highlighted how important data is. But this information is only valuable if it is used effectively. As part of their big data efforts, financial firms must analyse all of this information so that they have a clearer understanding of their client’s needs and requirements and so that they can offer more personalised, customised products and services.
#5 Manage your reputation: According to Forbes, banks generally have a bad reputation. According to research conducted by Reputation.com, banks performed dismally in terms of online sentiment and response rates. And another research report noted that many banks continue to ignore social media, which is a bad strategy when you consider that 92% of consumers trust comments and ratings on social media more than they trust advertising. In response, banks need to get serious about improving their reputations.
Did you find this article interesting? Our newsletter brings together these and other insights and is delivered to subscribers every month. Sign up below.