A gradual loss of monopoly is being experience by the banks as there are these new players arriving to the game, born from the digital transformation. To win back their title these banks need to adopt new strategies to face these new challenges and compete with the developing market. The development of technology and the subsequent introduction of open banking systems, payment automation and instant payment means that the banking system is gradually adopting the new methods and that the community needs more drastic transformation, says Professor Catherine Karyotis from NEOMA Business School.
Neo banks are one the biggest competitors of traditional banking systems. Neo banks are the financial tech firms which offer only internet services and lacks the physical branches. It is an appeal of sorts to the people who don’t mind doing most of their money management through mobile apps. Competing with these direct banks which wok exclusive online can be a challenging job. “In order to contend with these new platforms, traditional banks must adapt in order to stand out and capitalize on the trusted relationships that have been established between them and their customers,” says Professor Karyotis. The only effective way to stand out is focusing on the consumers and continuing to add more value to them to have the edge on the digital players. More efforts in understanding the consumers and paying heed to their behavior in order to provide the best possible solutions as the response.
“A new type of customer relationship needs to be established and the sources of value creation need to be revised to improve customer experience. To be customer-centric is to put the customer, and not the product offer, at the center of the company’s concerns.” says Professor Karyotis. This new type of relationship , if established can bring in the trust and by updating the source of value added creation like providing alternate services or revising the outdates methods which is no longer is use, all helps in adding more quality to the customer experience. Being customer centric means to pay more attention to what the customers are lacking or what the customers are expecting from the bank to make their work easier and hassle free. In simple words it means to put the customer first and not the product or the offer at the centre of the bank or the company’s concerns. Addressing the consumer’s issues will bring more trust to the table and this in turn will help the products which are offered by the banks. So putting the consumer first means solving their queries before launching new services, instead there can be a launch of new schemes or products or services which addresses the previous concerns of the consumers.
The traditional banks requests and appeals are disappearing as the time is passing by very quickly. It is high time and a great opportunity as well for the traditional banks to re-invent and re-introduce themselves as worthy of the game. The new innovations to their economic models and new schemes of partnerships with the new entries in order to emphasize their knowledge about the ongoing digital transformation and to adapt the skills which are built on trust and benefits their presence in helping their valuable consumers. In order to achieve all these key points, the most required step is to upgrade the social skill set of the employees. Organizing training programs to their staff can help speed up the process. By following all these little steps , a drastic change is sure to be seen in the traditional banks.
