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In digital banking, the key to resisting bigtechs

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In digital banking, the key to resisting bigtechs

by Sandra Riccio

The pandemic has changed the preferences and behaviors of many consumers. Banking services have also been overwhelmed by the wave of news. Among these is the digital banking that during the health emergency has grown all over the world at a rate never seen before.

With many branches temporarily closed during the various lockdowns and most physical interactions reduced to a minimum, account holders had no choice but to use the digital channel.

For example, in the United States Wells Fargo in one year it recorded a 35% surge in remote check deposit service and a 50% growth in online wire transfers. The pandemic has also prompted many customers to use digital banking for the first time in their lives, especially in the more mature age groups.

Digital banking: a long-term chance

For traditional banks the digital banking can represent aopportunity long-term but must pay attention to an aspect that offers a new opportunity for growth:

“To be able to better ride the current momentum, institutions should try to ‘humanize’ the banking experience more, regardless of the channel that is used – he says. Paolo Gianturco, Business Operations and Fintech leader of Deloitte Consulting -. On the one hand, this can improve customer satisfaction and, on the other, it can ensure solid relationships, especially with regard to the younger consumer segment “.

This consideration emerges from a recent survey by Deloitte (conducted in the US last March on five different age groups: Generation Z of 18-23; Millennials between 24 and 39; X-generation of 40-55; Boomers between 56 and 74; Silent generation of the over 75s) which focused on the relationship of account holders with digital banking.

Part of the survey also measured interest in digital-only banks or in the services offered by bigtechs. The result? The survey shows that consumers will continue to use i digital channels after the pandemic for simple transactional activities. Many however desire high interactions human contact. This is for complex products and services, such as mortgages and financial advice.

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“These are the needs of consumers who will resist even after the pandemic – observes Gianturco -. For this reason, the offer of human interaction in digital channels can be transformed into a real opportunity for banks “.

In short, after the experience of the pandemic, consumers seem to seek not only instant gratification, greater comfort and flexibility, but also more personalized services. The analysis shows that even younger consumers show that they love the physical channel.

Younger customers are also customers who declare themselves less satisfied than others with their traditional bank and are therefore more inclined to abandon it for a new one, perhaps only digital. In general, the analysis showed that the youngest are also the most open to financial products offered by banks that are digital only and to financial offers potentially coming from bigtech.

The moment is unique

“At this stage, traditional banks are faced with an extraordinary opportunity to be able to influence preferences of its customers for digital channels, creating loyalty and at the same time strengthening relationships with customers ”explains Gianturco.
For the expert, the banking world should try to capitalize on the golden moment that digital banking is experiencing and try to improve the customer experience with an innovative mix of proposals made up of both the human and the digital component. Regardless of the banking channel they use, branch, phone or mobile app, one factor continues to remain important to customers and is that of the human touch.

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But there is also another aspect that digital has changed. While mobile banking has made it easier for consumers to check their current account status, pay bills and transfer money, new digital tools are also allowing easy access to alternative financial options that are offered by competing banks that are digital only or from big techs.

The result is that the fidelity to traditional banks is now a risk. And it’s not just the youngest who take the step. Deloitte’s survey shows that even city dwellers and those with full-time jobs are more open to new banking relationships.

In conclusion, digital banking is out enhanced from the pandemic and now, if proposed according to customer needs, it could represent the key in hand for traditional banks to secure their future. And to be able to grow further.

The full article was published in the December 2021 issue of Wall Street Italia magazine

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