Banking 2025. The four pillars of the digital-first bank

Dictionar IT – API
august 12, 2018 recently publised a white paper in which they show their view of the new banking industry based on four pillars. They say that when today’s customers evaluate financial institutions, customers don’t compare different banks anymore, customers compare experiences.

Indeed, everything in customers lives is better than ever, with real-time, smart digital services being delivered daily via their smartphone. Booking a flight, planning a holiday, shopping online – it’s all easy, instant and seamless. Onboarding takes a few clicks and more importantly, unhappy customers can switch providers in a heartbeat.

Smart digital platforms power these superior experiences and this digital-first model has changed the game forever. There has been a fundamental shift in how business gets done, where staying relevant means becoming an active part of a customer’s digital life.

To survive when giants like Google make their way into people’s financial lives, banks must have the right framework in place to compete. This framework is the digital-first platform, supported by four pillars – omni-channel banking, smart banking, modular banking and open banking. Each of these four pillars is fundamental to success in the banking industry of the future.

Pillar one: Omni-channel banking

Rather than creating digital business functions for each channel, it makes sense to do everything once, and disperse to all channels via a central hub. What’s needed is a central omni-channel digital banking platform to orchestrate customer interactions across any touchpoint.

Pillar two: Modular banking

With a modular architecture in place, it’s possible for banks to innovate in the same way – fast and in line with customer needs. A modular architecture empowers a bank to go beyond responding to market realities, to actively creating them – in conjunction with the customer.

Pillar three: Open banking

Banks must open up their APIs – but they can also benefit by becoming consumers of them, tapping into third party capabilities to add real value to their offering. Doing this in a clever way could help them enhance their products and services to the point that they become the Uber of their area. When looking at things this way, the potential really begins to outweigh the threat.

Pillar four: Smart Banking

Effective segmentation, targeting and tracking is done by collating data from various sources, and analyzing it to create actionable insights. Big data is the engine that drives all of these efforts so banks must get comfortable with understanding their own data and that of other parties. A new era of personalization heralds the need for new skills to blend massive volumes of data from divergent systems into meaningful, actionable information.

In all of this, there is one crucial factor - the digital customer experience. Banks must absolutely ensure they secure ownership of it. This is essential, otherwise they run the risk of opening up APIs, giving away data to the competition, and failing to add any value to strengthen their own position.