In previous years, banks allocated a majority of their budget towards core conversions. But now that most core technology projects have been completed, where does that leave the budget for 2015?
Rather than continually patching legacy technologies, we’re starting to see many banks actually moving into the fintech (financial technology) space. Emerging market leaders are jumping ahead of competition by adopting and investing in fintech – putting banks on the frontline of financial innovation. Banks such as Wells Fargo and BBVA Compass recently hosted startup competitions to encourage new developments in the financial industry. These programs are revolutionizing financial services by giving startups the tools to develop the infrastructure they need to handle the large enterprise and security needs of banks.
There are a number of fintech products for various niches of the new banking world, but a few common philosophies ring throughout each development. Here are some of the major concepts banks should consider investing in this budget season.
Improving the client experience with customer data management
Banks have more data than any other industry, yet fail to use it to the best of their ability. Other industries such as retail, travel and lodging have tracked, aggregated and utilized their customer data efficiently from a marketing/ sales perspective. In turn, customers receive customized, targeted information such as offers, products and prices tailored to their needs which increases the chance of them making a purchase. Some of these tactics include geolocation mobile deals that offer discounts according to that customer’s specific location, and advanced tracking systems on purchases and customer activity used to define buying behavior and refine marketing strategies. If your bank is gathering any type of data, then use that information to send the right message and enhance your client relationships.
Upgrade bank technology
At recent financial technology trade shows, we’ve seen a wide range of mind-blowing innovations. Everything from eye scanning ID verification to mobile touch-to-pay ATM stations to a surge of alternative lenders and crowdfunding platforms. It’s enough to make futuristic movies like Minority Report, Back to the Future and The Matrix look like a thing of the past. But where does that leave banks? Which technologies are worth taking the time (and money) to see if they actually help your customers? With companies like Square moving fast and strong into the marketplace, banks are seeing the importance of allocating IT spending on the digital wallet and mobile banking. Both concepts we’ve seen effectively improve operations and customer satisfaction in the branch.
Streamline programs and processes
One of the major bottlenecks of banking is the fact that there are so many different systems and programs used for various processes within the bank. It can be time consuming and unproductive for bankers to constantly convert their data from one systems to the next when moving financial data down the line. That’s why many financial technology professionals are opting for what is called “the omnichannel” – a unified, coordinated interaction across all channels within the bank. This includes streamlining online banking, mobile, ATM and in-person interactions into one congruent experience. This will save not only time and money, but most of all – it will create a transparent and inviting environment for the customer (going back to our number one goal).
In the 1980s we created the debit card, in 1995 there was online banking and in 2015 there will be even more efficient and personalized products and services to bring customers closer with their neighborhood bank. This budget season, become a market differentiator with your technology spend and invest in your future today.