2024 has been an exciting year so far. We have all seen the magnanimous rise of Gen AI. CBDCs are the talk of the town in every central banking conference and regulators are opening up to new technologies. With so much happening, it is easy to get distracted by the noise. So we went back to ‘first principles’ to find some clarity.
In 2023, as a banking technology provider, we met 100s of banking CXOs across India, Vietnam, Philippines, United Arab Emirates, United Kingdom, Kenya, Netherlands and many more. Here are the five questions which were top of their mind and continue to remain in 2024:
How can I acquire more customers in an already saturated market?
Whichever country you are from, the chances of your bank struggling to get more customers, without spending a large percentage of money on acquisition, is really high. Add to that the customers are evolving at a rapid rate. Today the customer wants the same level of experience as a Fintech with the security and trust from a bank.
Open finance comes here to the rescue. It is not just a trend but a new shift in the banking order. Open finance allows customers to access and share their financial data and services across different providers, banking platforms, and channels. This gives customers more choice, convenience, and control over their finances. For example, banks can collaborate with another bank/eCommerce provider or a Fintech to offer loans, get deposits or issue cards.
Open Finance is not a new concept, but it is gaining more traction and acceptance among customers and regulators. According to a report by Accenture, ‘84% of respondents said they are open to sharing their personally identifiable information with a government department in exchange for a more personalised customer service’. Moreover, open banking regulations are being implemented or considered in many countries, such as the UK, EU, Australia, India, and Singapore.
Banks that embrace open banking and open finance will be able to create new revenue streams, enhance customer loyalty, and collaborate with fintech and other players in the financial ecosystem. We at iGCB recently launched our Open Finance enabled Retail Banking Platform at Money20/20 for banks looking to transform. Trust me, I am not bragging but it is genuinely a game changer.
How can I gauge my customer’s personality and offer personalised experiences?
As a banking customer myself, I want my bank to give offers which I want and not what the bank wants to push. Is it that hard to understand whether a customer is interested in a personal loan or would much rather use a credit card to buy at the black Friday sale? As a technology provider, I now know it is easier said than done.
Customers today expect more than just transactions from their banks. They want seamless, relevant, and engaging experiences that cater to their specific needs, preferences, and situations. Personalised or Contextual experience is the ability of banks to deliver the right products, services, and interactions at the right time, place, and channel for each customer. For example, a bank could offer a customer a tailored loan offer based on their income, spending patterns, credit score, and life events. Contextual experience can help banks differentiate themselves from competitors, increase customer satisfaction, and drive cross-selling and upselling.
Why is it so difficult? Because it requires banks to leverage data, analytics, AI, and omnichannel strategies from multiple data streams to understand customer behaviour, anticipate needs, and offer personalized solutions.
Banks need to invest in a digital banking platform which allows them to create user journeys for specific customers. More importantly, they need a banking platform which allows them to do this quickly and easily without depending on the technology provider. Our digital banking platform was recently the talk of the town during the Middle East Banking Innovation Summit (Mebis) and has won the prestigious Asian Banker award for implementation in Africa.
Can my banking user journeys be as Contextual and Human as those offered by Fintechs?
A few years back, a credit card payment app called Cred took India by storm. Its sole purpose was to gamify the process of paying credit card bills. The app had great UI and every time you paid the bill, you got to play games like ‘spin the wheel’. I was hooked on it. That’s the power of gamification. It not only engages your audience but also builds loyalty.
Gamification can help banks create fun, interactive, and immersive experiences encouraging customers to achieve their financial goals, learn new skills, or adopt positive behaviors. For example, a bank could gamify its savings account by rewarding customers with points or cashback for reaching certain milestones or completing certain tasks. Gamification can also help banks attract new customers, especially millennials and Gen Z who are more familiar with gaming culture. The global gamification market size is projected to reach USD 37.00 billion by 2027, exhibiting a CAGR of 24.8% during the forecast period.
Can my bank innovate on the fly?
Traditional architectures were linear. Think of them like a Jenga. To add or remove any block (product or functionality) in between would be extremely difficult. Also, you can’t reuse any functionality. Composable architecture is a modular approach to designing software systems that allow banks to build applications using reusable components that can be easily assembled, reconfigured, or replaced as needed. Think of them as individual blocks (Microservices) laid on a table and connected by threads (APIs). Composable architecture enables banks to achieve greater agility, flexibility, and scalability in their IT landscape while reducing complexity and costs. Composable architecture also supports innovation by allowing banks to experiment with new technologies or business models without disrupting their core systems. For example, a bank could use composable architecture to launch a new digital-only offering or integrate with a third-party service provider without affecting its existing infrastructure. We recently launched our fully composable core banking and credit platforms for banks around the globe.
The answers to these questions will build the foundation for the banks that stay resilient in 2025. If you are a bank facing similar challenges, we would love to connect with you over a cup of coffee or Jenga. Too cheeky? Well…
On a side note, we are participating in Money20/20 Asia (Thailand) and Europe (Netherlands). If you or your colleagues are there, please drop us a line on marketing.gcb@intellectdesign.com.
Author: Mithu Gupta, CMO & Head, User Experiences, iGCB, Intellect Design Arena
