How Technology Is Increasingly Humanizing Digital Banks

By some accounts, the omnichannel bank of the future has digital roots that trace back 20 years or more, Michael Haney, head of digital core at Technisys, told PYMNTS.

From the rise of ATMs to the ubiquity of voice and keypad prompts on the phone, or bot-screened questions online, most consumers are fully comfortable by now with the art of financial self-service happening outside of the traditional brick-and-mortar branch. Add in the most recent advances and mass uptake of mobile banking, and the stage is set for the omnichannel bank of the future.

Through it all, Haney said, the quest has remained the same.

“How do I enable banking to happen when the customer wants — and not necessarily around branch operating hours?” he asked, acknowledging the recent shift in customer preferences has signaled a new path for financial institutions (FIs).

“Mobile is currently the preferred channel for most people, not only in the United States, but around the world,” Haney said.

In some developing markets, the embrace of digital banking has leapfrogged more established markets, he said. Branches have not been as prevalent in those economies, and consumers (and providers) have been able to jump directly to mobile.

“The beauty of mobile is that it works around the customer’s time,” Haney said. “If they want to bank at midnight or on the weekend, that’s no problem.”

The digital shift has in recent years presented a challenge for the banks, Haney said. Digital-only firms, unburdened by legacy infrastructure, have been able to design from scratch new mobile offerings and robust user experience (UX).

The competition has been healthy because it’s spurred the bank to play catch-up to these digital challengers. With the depth and breadth of products and services that the legacy banks have — and significantly deeper pockets — “these banks are now scoring better from a customer experience point of view,” he said. “They’ve caught up and surpassed” the challengers.

Mobile Channels Hold Sway — for Now

The path forward is changeable, however, and Haney cautioned that it’s no sure bet that mobile channels will continue to dominate.

More immediately, the concept of embedding banking into social media messaging apps, and even the Internet of Things (IoT), is pointing toward an omnichannel approach.

There may be some bifurcation of approach, Haney said, adding the biggest banks will want to keep their brands front and center through the entire range of customer interactions. Other banks (smaller ones) will take a more behind-the-scenes approach where application programming interfaces (APIs) help them embed banking functions into retail, eCommerce, travel and hospitality verticals.

These are the banks that will excel at the so-called plumbing of the transactions and will function more as utilities.

“We’ll see a mix of channel usage over time” no matter the approach, he said. “No channel truly ever dies.”

That omnichannel approach can be a boon for incumbents, as users that are active across several points of contact are among the most profitable customers.

Customer journeys can start and end across different form factors and channels, and information and data can travel with them, enabled by microservices and new tech architectures.

Technology and that data can bring back the human element that used to be part of local banking relationships. Collecting, analyzing and generating actionable insights with machine learning and artificial intelligence (AI) from that data can give rise to alerts and notifications that help consumers on their self-serviced financial journeys. The technological road ahead may have twists and turns, but deepening the customer relationship requires a mindset shift among the FIs and a willingness to embrace change.

“The banks that are succeeding today have taken that playbook not only from the digital challengers, but from other industries and other markets,” he told PYMNTS. “They need to embrace continuous innovation and not be afraid to adjust … and be more adaptable.”