Most of the Nordic universal banks seemingly seek guidance from a crystal ball in order to find their unique digital path. However, things are moving fast, and technology is driving big change. Banks need to speed up or risk losing market share to new entrants and digital players.
Customers are looking for better banking experiences, 24/7. Most customers want a close relationship with their bank. They want a partner to help smoothly handle day-to-day financial services and a financial adviser that provides tailored recommendations. In other words, customers are looking for a financial partner for good and bad days.
Building a closer customer relationship
To achieve this, digital banks need to create seamless experiences for their customers, regardless of the channel. Customers increasingly expect to access their banking services from anywhere, at any time, using any device. They also demand more choice, collaboration and mobility, and they’ll settle for nothing less.
The digital bank supports and provides advice to customers in the moment of financial decisions in a digital manner. Building this close customer relationship requires a modern customer interface that empowers the customer to make knowledge-based decisions, at any time and any place.
In addition, intelligent analytics become essential to building greater customer insights, which can be leveraged to tailor customer communication. For instance, imagine an analytics system that, using external data, detects an increased search activity for houses in a given area. Comparing these results with the internal customer database, banks could target customers who live in the area and who have loans that will be shortly renewed. These customers could be notified about the increased market activities and given facts on loan options, including interest rates. This could lead to a potential conversation with the bank.
The troublesome investment
Yet, many of the established banks lack the time and budget to make the innovative improvements they need to compete in this new marketplace. We know that banks spend 75%-80% of their IT budget on day-to-day operations, which leaves only 20%-25% of the funding to drive the innovation change. A troublesome situation.
Banks need to save as much as 40%-50% from run-rate costs, and then shift a majority of those savings into change-the-bank projects. To do that, banks need to adopt a next-generation infrastructure that enables them to save money on old legacy operations, while adapting to the digital banking world with cloud-based platforms and digital applications.
Christer Hjortsparre is Industry General Manager at CSC’s Nordic Banking & Capital Markets business. With more than 25 years of experience working in the financial services industry, Christer has obtained in-depth industry knowledge that he applies to his day-to-day work. Christer has advised the banking sector from a management and IT perspective, and he p provides value and insight on the digital transformation agenda to the Nordic banking industry. On a daily basis, Christer drives CSC’s Nordic banking business, leading a team of industry specialists.