What does 2014 hold for banking innovation?

Originally posted in Finsia Passport

I predict 2014 will be a year of continuing innovation in the customer banking experience, and in all layers that underlie it. We will see this most prominently in customer facing scenarios, but the lesser visible areas of technology and organisation will be experiencing a flurry of activity to support such innovation.

First, I expect that the banks will continue to improve their customer engagements, mainly by leveraging digital channels. The range of opportunities for customer contacts will continue to expand as an increasing number of customers leverage multiple forms of digital communication with their banks such as email, website, mobile website, and mobile apps.

Banks will start to focus on the opportunity to deliver on consumers’ rising digital expectations, where the bar is set by the likes of Amazon and Apple. Instead of employing disconnected campaign strategies or relying on functional contact methods, banks will start to create an experience that has more consistency across the various channels, to deliver the right message to the right customer at the right time.

Done correctly, this in turn will enhance their ability to manage their customer relationships to a higher lifetime value.

Second, we are likely to see more attempts to crack the mobile wallet market, with a high number of new entries into the market — not only from the banks, but also from non-bank players and startups.

I look forward to seeing which combinations of priority customers and features offered to those customers will be chosen by the industry players to best position themselves for the future growth. At the end of the day, those choices will determine the shape of adoption curves in the coming years.

At the same time, the banks will become better at leveraging data to optimise their customers’ journeys. This will be achieved not only by realising the value of the data they already have and acting on it, but also by ensuring that every customer interaction is treated as a new piece of data, and by subsequently building an arsenal of behavioural triggers, content libraries, and new contact opportunities.

Such a level of data-driven customer centricity will require heavy analytics, and we can expect that it will be progressively more difficult to acquire talent in this space. At the same time, the analytical solutions and self-optimising platforms will continue to become more popular among all customer-facing functions.

In order to enable these developments, and also to cut costs and drive down the time to market, banks will continue to rethink their technology architecture landscape. As a result, we are likely to see more adoption of Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS).

Lastly, the banks will continue to innovate their internal processes — becoming more agile in the delivery of solutions in response to the new expectations of customers, and new products and ideas from competitors large and small.

We are likely to see more and better quality internal cross-function collaboration, enabled not only by technological solutions, but also by changing mindsets.

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