Traditional banks have historically been slow to embrace technological innovation, in part because of the huge amounts of resources, time, and labor they’ve already invested into their existing processes. For many banks, abandoning and replacing these procedures means letting go of the millions or even billions spent on legacy procedures and technology. Banking executives also remain wary of the possible security risks and vulnerabilities a poorly executed digital strategy can introduce.
The fact remains, however, that evolving customer demands and market conditions are changing the shape of the financial industry as a whole. Fintechs and challenger banks are currently on the rise, offering on-demand digital services and round-the-clock banking access. To keep up with the competition, traditional banks need high levels of flexibility and business agility that their existing legacy systems simply can’t achieve, making the need to consider upgrades inevitable.
The obstacles facing banks when it comes to innovation are numerous, but it’s fortunately possible to overcome them with the right technology and strategic partnerships. If your bank is looking to modernize its operations, adopting a digital banking solution that’s tailored to your institution’s specific needs may be an intelligent first step. The following are just a few of the in-demand features that enable up-to-date banking software to significantly outpace legacy solutions:
Improved Payment Systems
More convenient payment experiences have become an increasingly pressing consumer expectation in recent years. Digital banking solutions can open up a wider range of payment platforms for banks, allowing customers to transact through whatever channels are easiest and most convenient for them. Many solutions, for example, come with capabilities that let their customers make payments with QR codes, over instant messaging platforms, or through digital personal assistants.
The latest software is also sure to be preprogrammed with the most up-to-date cybersecurity features, some of which include granular user permissions management, password protection, and high-level encryption. These robust security protocols ensure that customers’ money and personal information will be well-protected whatever platform they choose.
Multimodal Customer Support
Modern software solutions allow banks to extend their support to customers seamlessly across a variety of integrated channels. Customers with complex concerns requiring involved service, for instance, have the option of contacting their bank via video or voice call. During these calls, bank personnel will be able to annotate on the customer’s screen, access phone and email information, and view the customer’s device details and location to better help them resolve their concern.
Good banking software will also take the needs of less tech-savvy customers who aren’t as comfortable navigating digital banking environments into account. Such cases require more hands-on assistance from customer service staff, who will be able to access customer accounts and make the necessary modifications through the solution. This whole process should also be supported by airtight security protocols such as two-factor identification and a transparent activity trail documenting every action taken on the user’s account.
Intelligent Self-Service Functions
Digital banking solutions can also automate basic customer support procedures and transactions by delegating these processes to intelligent chatbots. Advanced artificial intelligence and natural language processing features facilitate easy interaction between customers and these digital personal assistants. The chatbots thus help maximize staff productivity and free them up to attend to more complex customer service cases requiring direct human intervention.
Banks have been servicing hundreds of thousands of customers daily for years, but the current business environment demands that they scale their operations even higher. Today’s banks are expected to process millions of customer transactions across multiple jurisdictions and currencies—and to do so efficiently, seamlessly, and with minimal downtime. They also have to contend with changing regulatory standards across different locations and the operational costs of establishing offshore entities.
The success of financial institutions today rests on improving the scalability and efficiency of their operations, and adopting cloud-based software is one functional solution. Cloud-enabled technology lets banks set up enterprise-grade systems at relatively low upfront cost, optimize operational spending, and capably meet market and consumer demands.
Seamless Third-Party Integration
The majority of banking customers today are digital natives who appreciate high degrees of connectivity between the various online services they use. It’s thus beneficial for banks to establish strong partnerships and connections within wider digital ecosystems. Secure, frictionless integration with online payment platforms, merchants, digital wallets, and other services will boost client satisfaction with both the bank and the third-party providers they work with.
In addition to customer interests, greater integration also serves institutional interests. Connecting seamlessly with third-party systems allows banks to distribute their own products and services more widely. They’ll also have the option of co-developing innovative offers and product bundles with their chosen partners, opening up new sources of revenue and creating more opportunities to attract new customers.
The banking industry is growing increasingly digital, and banks cannot continue to depend on rigid legacy solutions if they wish to keep up with their competition and better serve the changing needs of their client base. Choosing appropriate digital banking solutions can help traditional banks minimize the risks associated with innovation, address current efficiency gaps, and elevate their overall operations.