When it comes to digital banking, the records of Raiffeisen Bank showed an interesting twist at the end of last year when it became clear that the number of active mobile banking users surpassed the number of electronic banking users. For Raiffeisen, a bank keen not only to maintain its leading position in the local market, but also to develop its digital channels to the level of leaders in developed markets, this valuable piece of information had a double meaning. On the one hand, it proved that we did a great job in keeping our clients informed and in educating them about developments, but also that our mobile application has been substantially improved and made more intuitive and easier to use. However, the fact that only 30 per cent of our active customers regularly use mobile banking clearly shows further potential for growth but also that we have a long way to go.
Every day, in every industry the terms “digitalisation”, “innovation”, “transformation”, and “data analytics” are frequently used. If you wish to shape the future, to be more than a spectator following trends, you must take part in creating them. This is especially true for banks, the most traditional, the so-called “legacy” institutions. For us this process goes deeper, because it entails a comprehensive self-assessment and a lot of hard work on implementing change. As bankers, we are very skillful in collecting client data to estimate their creditworthiness, but quite often we fail to use this data for more innovative causes or to approach our clients from a different angle – the one that suits them better and the one that puts their needs front and centre.
Therefore the “Customer Centricity” term has become more and more important for banks, and in order to truly reach this level, it is necessary to ensure a thorough transformation of the organisation, processes and client relations. Today, there is so much talk about the importance of innovation in an abstract sense, but I think these are precisely the areas that innovations need to address, something digital banks realised a long time ago. Yet, as we have seen from various examples both in Serbia and in other markets, they seem to “have failed” in one critical aspect where traditional banks have mostly been successful, and this is the monetisation of their ideas.
On the other hand, if we have undertaken this major task, there are some banks whose way of doing business should be seen as best practice. I was lucky to have the opportunity to recently visit one of them, the innovation center of DBS bank in Singapore, thanks to the Immersion Programme and my colleagues from Raiffeisen Bank International. Their inspiring slogan “Live More. Bank Less” in its essence underlines what digital transformation of a bank basically means – for the client, but also for the bank itself.
And truly — what is it that our clients want? They want to bank in the most comfortable and efficient way, leaving them with more time for those “little” things in life!
Each bank that gets on board with transformations first and foremost needs to “step into their clients’ shoes”, to dive into the customer journey and to design its processes ensuring high level of customer satisfaction on one side and its profitability on the other.
Where we can find inspiration as well as know-how is fintechs and startups, who have from the very beginning created a culture of continuous innovation, collaboration and innovative way of thinking.
Instead of thinking about how to gain digital competencies, we need to think like a fintech.
Also, in order to be a leader in the technological sense, it is desirable to own your own technology.
An interesting fact is that digitally savvy companies have returned to insourcing their technological resources, while reducing their costs by moving to cloud architecture, by using open source for software platform development,…
Everything is done with the aim of meeting various clients’ needs while ensuring high level of user experience, but at the same time reducing your own costs.
All that has been mentioned above leads to a conclusion that banks that wish to be digitally oriented, should change their corporate culture so that it is aligned as much as possible to that of startups. This change must start from the top and move down. First the captains, then the sailors.
Examples of work well done in this area can be found in the most successful banks when it comes to digitalisation. They cooperate closely with startups in specially designed work environment, and all their employees (from the management board to the youngest associates) go through carefully designed training modules. This is done in an agile environment mode and in areas specially designed for this way of working.
A(gile), B(ecome a learning organisation), C(ustomer obsessed), D(ata driven), E(xperiment, take risks)… These are the ABCs of new culture.
This is where new features come into the picture, where the reach is extended, since the company that drives innovation becomes automatically more attractive for new talents. And they are the greatest asset of any company.
In conclusion, this is a comprehensive subject, one that is talked about a lot, but even more is being done. The bottom line is that we, “traditional” bankers, have finally realised that the time has come to start utilising valuable client data, using it to tirelessly innovate, to offer clients a comfortable and versatile user experience while also transforming the way our employees work. And, of course, we hope that increasing numbers of clients will be able to recognise this and choose precisely such a service.
For those who are more traditional, like us, at least in our individual markets, personal contact will not cease to exist, nor that sense of trust which we all (even the most agile among us) think about first when defining the relationship with a bank.
If you are interested in fintechs in CEE, Raiffeisen Bank International has provided a comprehensive overview of the fintech ecosystem in the Fintech Atlas.