If you’re a banker, techie, broker, or most importantly, a customer in the BFSI segment, I’d assume you must have heard of the new buzzword “Digital Banking.” In my circle, I chatted with a number of people, and oddly enough, no two people seem to perceive this the same way. Well, this is a bit of an exaggeration, but you get the idea! This made me pause and think about what this could mean for someone like me who is an industry insider, responding if a colleague, friend, or someone in my box asks me about this. As a true CrossFit athlete, I follow at least the first rule: tell everyone you meet about CrossFit.

The reason I mention CrossFit is not just because of my fascination or even obsession. CrossFit is a bit complex and daunting for the uninitiated, but in a nutshell, it is a strength and conditioning program that optimizes fitness. CrossFit defines fitness itself in terms of 10 components: cardiovascular endurance, endurance, flexibility, strength, power, speed, agility, coordination, precision, and balance. But usually, if you ask any of your friends what fitness is, you might get multiple answers. For example, a runner might say ability to run a half marathon, or a weightlifter might say deadlifting at least 1.5 times body weight, or a guy who practices yoga might say doing 108 Suryanamaskaras. Well, each of them may be right in their own way. Your definition of fitness might be doing all of that, or you could just say I’m fit enough if I can do my 9-5 job without taking any sick leave in an evaluation cycle.

In the same way, banks could interpret Digital Banking in their own terms and, similarly, people like you and I will have formed some opinion based on our own exposure.

Over the years, banks of all shapes and sizes have become very streamlined by adapting to IT/ITES (IT-enabled services) and have achieved varying degrees of success. However, due to a lack of a focused and long-term focus, the creation of disjointed systems, rapidly changing business and operational scenarios, etc., the intended goals may not have been fully achieved. Some of those “failed” initiatives might have been driven by the institution’s drive to be one of the first to adapt to a technology or trend (betting on the wrong horse). On the contrary, we could lose a great opportunity if we do not recognize and bet on a winning horse. So the trick is to bet on the right horse, at the right time, i.e. when the odds are low. Typically, industries use what is called the Hype Cycle to evaluate a new technology or trend. If you’re interested in understanding what a “hype cycle” is, check out Gartner’s methodology. I will try to tie together some of the key aspects of Digital Banking as, unlike most buzzwords, it is neither a single service nor a technology.

Just when (2008-10) I spent more than a year in Brussels, three big banks (Fortis, Dexia and KBC), which had always been extremely risk-averse bankers from the BeNeLux region, began to face great pressure and their value eroded. significantly and sparked heated debates in the community, who thought that their money was always safe in the banks (whether as a depositor or as a shareholder). What really happened there is very complex. The key factors are the huge sovereign debt ranging from 84 to 99% of GDP, the lack of government for 533 days, etc. These triggered liquidity problems. Add to this other upheavals in the banking industry globally, and it’s easy to see that “trust” within the system was under threat. How would we build trust? Being transparent. Customers need (don’t want!) transparency throughout the system. The younger the customer base, the more acute that felt need. This, when you look at the changing customer experience and expectations of the retail industry (Amazon, Flipkart), transportation (Uber, Ola), the food industry (Zomato, FoodPanda, ZaptheQ), you know where the banking industry is. Customers have reset expectations in terms of value, experience and options. The key takeaway for the banker: User Experience: Valuable, Consistent, Mobile (Anywhere), Secure, Enhanced.

Many people I’ve recently interacted with on this topic were of the opinion that Internet banking or mobile banking is digital. Yes, this is just the beginning of what Digital Banking could be. They probably cover a previous set of customer expectations. Moving on, could we see a day soon, where there is no paper in any of the banking transactions? When I say paper, I don’t just mean currency! Some things that are already in practice in some banks and gaining momentum are: digitization processes within the bank (such as customer onboarding, loan application), check truncation systems that allow you to take a photo of the check on your mobile phone and send to your bank, etc. – there providing efficiency in decision making, ability to customize processes to specific customer requirements, saving some unnecessary trips to the branch, etc. This could mean, in other words, implementing document/image management systems, business process management and tracking systems, integrating these components within existing IT solutions. The key- digitizing internal processes.

Social media in recent years has had a bigger impact across borders, whether it’s the Tahrir Square revolution, the ice bucket challenge, which mobile to buy, how we order and pay for lunch, or identifying a good restaurant and become Dutch while we share the account. . Social media is already disruptive in terms of which bank to trust, what can they expect from a bank in terms of services, giving voice to their dissatisfaction. Which in turn means banks need to be on the same social media listening to their customers, selling their services, and ultimately attracting new customers, retaining them, and more importantly, becoming “The Goto Bank.” if the customer has multiple accounts. As an example, which could not have been expected a few years ago, in Kenya, one of our renowned client’s Twitter users (@ChaseBankKenya) uses Twitter to connect, launch and share CSR activities and address customer queries and concerns. clients very effectively. Namely, the scope factor.

Another silent thing that happens behind the walls of a bank is called Data analysis or Big Data. These produce unprecedented insights into customer behavior and preferences, driving extremely focused strategies. These also help clients understand their spending analysis, planning their budgets, managing financial goals, etc.

In addition to these key components, there are several others that could make the bank more “digital”: chat and video discussion facilities to bring the bank closer to the customer when needed, or educate customers through online tutorials such as financial education, tax planning, etc., integrating various solutions and systems in the bank to reduce data duplication and redundancy and helping the bank to create more straight-through processing systems by reducing errors, cost of operations and increasing efficiency throughout the system. Banks could significantly increase seamless data sharing with other partners such as regulators, customers, government agencies, making the whole process much more transparent and efficient.

Finally, the big question is what must be accomplished from the great list of tasks to call a bank “Digital Bank”? Just like in fitness, there is no single solution or the right solution. Each bank has to define its own strategy, execution plan to achieve the goal of customer delight, operational efficiency and greater value for shareholders in general.