This week, Standard Chartered Bank and Microsoft announced that they have entered a three-year strategic partnership to accelerate the bank’s digital transformation via a cloud-first strategy. The digital strategy partnership makes the bank’s virtual banking, next-gen payments, open banking and banking-as-a-service plans a reality.
This move by Standard Chartered, and similar partnerships/investments by others in the banking and financial services sector, highlights the importance of integrating digital and physical service capabilities. According to PwC, “success will ultimately involve finding the right balance between building deeper banking relationships with digital customers while persuading branch customers to take advantage of digital capabilities”. But there is no single strategy and each institution needs to make decisions based on their overall customer distribution and servicing.
Where are investments being made?
“Banks will redefine how they work (their processes), what they sell (their products and services) and how they interact with their customers and employees (their user experiences),” a 2018 Accenture report states.
As part of this broad digital strategy, banks are expected to embrace emerging technologies like cloud computing, robotics, big data and artificial intelligence (AI) in an attempt to improve customer service and boost overall efficiency. And COVID-19 has only increased the urgency around digital banking transformation within the financial services industry. The pandemic has highlighted a very real need for banks to boost internal efficiency and improve competitiveness – especially as fintech ventures and big tech players make their play for a piece of the traditional banking pie.
Many have already mastered the art of using AI tools to analyse their transactions and, in doing so, uncover insights about customer habits; this is especially true within the fintech space. These brands are also using AI to automate manual, time-consuming processes and repetitive tasks.
The challenge is to embrace digital banking transformation, while acknowledging that any changes touch all areas of the business. Banks also need to understand that if they want to achieve real transformation – to improve customer experience and enable better digital strategy decision making in the process – they need to regularly review the success of their efforts with all key stakeholders.
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