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What is Integrated Digital Banking Ecosystem

Narendra Kumar

| Updated: Nov 13, 2017 | Category: General

Digital Banking

An Integrated Digital Banking Ecosystem Drives, Loyalty, cashless purchase and Customer Satisfaction.

What is Integrated Digital Banking Ecosystem?

Financial Services providing companies face intense pressure to increase efficiencies and reduce costs while delivering next-generation digital services. Partnerships with financial technology start-ups and other non-traditional market entrants can give them the agility they need to support digital transformation and create a digital ecosystem that will retain existing customers and attract new ones. New start-ups are emerging to meet both customer and bank needs for channel integration and dynamic customer experiences that make banking easier to accomplish on the devices customers want to use. And some of the vendors challenge the traditional often incumbent vendors of traditional online and mobile banking and core banking solutions.

Digital modernization gives traditional banks a second chance. A smart, well define enterprise-wide approach positions them to good customer satisfaction and loyalty, driving long-term relationships, Cashless purchase, Overall increase in GDP and profitability.

What is important for digital banking Eco-system? 

  • Sure and safe management of information is vital for Digital banking
  • Banks need to act, but more important, they need to act strategically
  • Economist has experienced high-level ROI from digital banking practice which s substantial, the costs are steep for not adopting digital banking.
  • The consumer banking behavior has been shifted from offline banking to Digital banking and more of it’s now streamlined, Cross-channel approach requires for the bank to implement right change on right time.
  • An enterprise mindset is a key factor for implementing a digital banking system in India.

The fundamental digital equation 

A simple way to summarize what a digital bank needs to offer a customer and digital banking solution provides is: A+B+C = D

A = Anytime Banking, anyplace shopping, any channel purchase – this is what customers expect in the modern digital ecosystem. As they are retail bank customers, High Net Worth (HNW) investors or corporate customers – their expectations are banking on their terms.

B = Better banking, beyond the traditional banking service – using customer’s data to become a virtual advisor, helping customers to make better financial and commercial decisions.

C = Contextual – the service, communication, rewards and products you offer to meet customer’s expectations, needs to be driven by data and analytics and personalized to their requirements.

D = Digital banking

Integrating Social Media with Digital Banking Channels

As Social media is a separate world than other digital channels, but there is important overlap, and banks should take advantage of this.

Integrate Twitter and Facebook into mobile apps.

There are many apps that leverage Twitter to engage in customer service requests. Facebook is more specialized, and riskier, but useful in limited iterations. Users can access their Facebook friends list and send money to them from within the RBS app. “This is a natural extension of payment functionality that few banks offer.

Build consumer confidence in the bank’s social media strategy.

Consumers express low confidence in communicating with banks over social media platform, so Fintech Players and banks need to work harder to be available to answer customers query on social media Platform and they should focus on engagement over social channels.

Drive the discussion via social media. 

Customers talk about banks on social media more than they talk to their banks. FIs requires to set up forums for clients & customers to air complaints and questions to help contain and control issues as they arise. Bank of America, UA and another German bank, DSGV, both set up forums for customer complaints on Facebook / Twitter and found success corralling complaints and responding to them more quickly and effectively with this strategy.

Engage customers, and they will use more services. Awareness is critical.

Social media should be engaging, and banks need to give customers something to engage with, rather than simply broadcasting messages. Social media should be used for improving customer service.

Understand where social media can be used as a tool, and where it cannot.

Social media strategies that may work for restaurants, for example, will not necessarily work for banks. Consumers want social media personalized, rather than filled with promotions.

Don’t jump into Facebook banking too quickly

Using Facebook & Twitter will not work for all banks. Social media banking is extremely experimental and requires to be treated with caution. Community and banks are no ready for Social media banking.

Use analytics to gauge effectiveness

All types’ social media campaign should be carefully analyzed, and maximum use of the software is crucial for this.

Banks need to craft a social media model

JP Morgan Chase and Wells Fargo have made internal decisions to put resources into developing a social media strategy. If one’s bank isn’t willing to put in a strong effort to develop internal guidelines and directives, the social media effort will falter.

Use big data to maximize value

Some aspects of social media for use in analytics, such as giving a complete view of customer preferences, are obvious and others may not be, such as using social media signals to risk.

Complex social media strategies require regulatory considerations.

Compliance & Cybersecurity shall be one of the main obstacles to social media banking and is the reason most social media innovation in financial services takes place outside the USA. The Federal Financial Institutions Examination Council is a government body of the USA composed of five banking regulators that are “empowered to prescribe uniform principles, standards, and report forms to promote uniformity in the supervision of financial institutions) has published guidelines for banks about how to use Social media in Digital Banking.

Emerging technologies in digital banking in India

The entire world community has moved towards the era of Digital, Society is moving faster than many organizations and emergence of the digital five forces – Social, Mobile, Analytics, Cloud and Internet of Things (IoT) – is creating new and valuable sources of business information, ways to interpret data and the means to do so cost-effectively.

It was only in the late 1990s that some private sector banks introduced non-branch banking services through the use of information technology. Initially, transactions on internet banking were viewed as insecure. However, internet banking witnessed growth in the upcoming years owing to initiatives taken by the government, the RBI, falling internet costs and increased awareness. Online banking has enhanced customer satisfaction by providing anywhere anytime banking and benefitted banks through cost savings and increased penetration.

However, in the last few years, the Indian banking sector has realized the need for digital technologies and is rapidly moving to embrace digital banking. They are making a considerable investment in creating digital infrastructure in order to offer various solutions like mobile banking, e-wallets and virtual cards, etc. The key innovations in Digital banking are Digital-only/Virtual Banking, Biometric Technology, Artificial Intelligence and Robotics to mention few.

The digital-only bank provides end-to-end services through digital platforms like mobile, tablets and internet. It is paperless, branchless and signature-less banking offering 24*7 services to its customers. In India, digital banking is built on Aadhaar structure. The digital banks offer several services like account opening, term deposits, loans as well as financial products like insurance and mutual fund. Thus, digital banking is simple and cost-effective, there are still security risks. The pace of growth in digital-only banks will depend on their ability to address security concerns. Innovations like Biometric technology allows the person to be identified uniquely by evaluating one or more distinguishing biological traits like face, hand, retina, voice and ear features. The usage of biometric authentication which can eliminate the requirement of multiple passwords and PIN codes. The Indian banking sector is also gradually adopting biometric authentication to provide simple and secure banking experience to its customers.

There are many other technologies which Indian banks could connect in future and banks can use Google glass technology to locate the nearest bank branch/ ATM, check account balances and use video conferencing for technical support. The Augmented Reality (AR) app is the integration of digital information with the user’s environment in the real world. And in India, this mobile app has been launched by a bank which lists all dining destinations, property lists, and shopping centers, bank ATMs, branches etc. with real-life pictures along with distance and directions. Installing Bluetooth beacons at bank branches could allow banks to integrate physical and mobile channels to provide effective communication. However the adoption of beacon technology by Indian banks is very fewer, it is expected to increase going forward with many Indian companies engaging in beacon technology and growing smartphone users. Indian banks are yet to experience extensive adoption of many technologies, however, significant investments and developing dedicated teams to test these technologies is a positive sign.

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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

Business Plan Consultant


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