Digital-First Banking

Walking Omnichannel Banking’s Privacy Fine Line

Digital and mobile banking may be more popular than ever, but it would be a mistake to count out the power of in-branch services just yet.

Consumer surveys have found that 75 percent of financial institution (FI) customers place a great deal of importance on branch visits, with 70 percent visiting banks on a monthly basis or more. This is in part driven by services that consumers often feel more comfortable doing in-person, such as account opening or loan applications.

Banks looking to make the most out of these branch visits are increasingly deploying data analytics, which leverage both data provided to them by customers — including transaction histories, personal financial information and more — as well as external data, such as market studies and demographics. Banks harness this data for a variety of purposes, including developing a greater understanding of customers’ financial lifestyles and creating targeted marketing initiatives.

In the March Digital-First Banking Tracker®, PYMNTS explores the latest in the world of digital-first banking, including new digital pushes by Lloyds Bank and Capitec Bank, an in-depth look at ATB Financial’s data analytics program and how banks can develop sophisticated data programs of their own.

Developments From Around The World Of Digital-First Banking

Banks are investing massive sums in these digital-first transformations. Industry giant Lloyds Bank is spending the equivalent of 19 percent of its operating costs on technology such as robotics, which has already paid dividends. Lloyds even reported that its robotics program has saved it more than 1 million man-hours for its staff. This investment is well above the industry’s average technology spending, however, which for North American banks totals 17 percent of the total budget and for European banks amounts to 14 percent.

Small banks are also making significant digital overhauls. Three community banks — Bank of Botetourt, Farmers Bank of Appomattox and Select Bank & Trust — recently deployed the KlariVis data analytics platform, which harnesses data from a variety of sources for insights on deposit, loan and revenue trends. The three banks deployed the analytics platform in order to leverage customer data in their core and ancillary siloed system. The intention of these programs is to supply the three banks with more holistic views of customers’ needs.

It is crucially important to keep new technology like this secure, however, and banks are deploying many different tools to do so. South Africa-based Capitec Bank, for example, chose biometrics to secure itself and its customers, and it has enrolled 9 million users into its fingerprint authentication system, approximately 90 percent of its 10 million-strong customer base. The platform was developed in partnership with biometrics company BIO-key starting in 2015.

For more on these and other digital-first banking news items, download this month’s Tracker.

ATB Financial Harnesses Data Analytics For Onboarding, Security And Targeted Marketing

The first step to any successful data analytics program is obtaining the data in question, with some FIs deploying creative methods to do so. Alberta, Canada-based ATB Financial is one such example, as it deploys a number of unique robotic tools to gather and analyze customer data. In this month’s Feature Story, PYMNTS talked with ATB’s executive vice president, John Tarnowski, about how the bank works to remove friction and risk from its customer onboarding, targeted outreach and fraud prevention efforts.

Deep Dive: How Digital-First Banks Are Using Data Analytics For Customer Outreach

Banks and businesses of all types face a constant challenge in their day-to-day business: figuring out how best to serve their customers. FIs have a secret weapon when it comes to these efforts, however: the data its customers provide every day during their banking interactions. This month’s Deep Dive explores how banks are harnessing this data to develop targeted marketing offers and improve back-end efficiencies, and how banks without a program already in place can get on board.

About the Tracker

The Digital-First Banking Tracker®, done in collaboration with NCR Corporation, is your go-to monthly resource for updates on trends and changes in digital-first banking.

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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