The Future of Digital Banking

The Future of Digital Banking

Significant changes in the banking system are led by globalization. Responding to these changes, banking system is continuously expanding the choice of services offered to the customers and increasing their reliance on technology to offer such services, banks have realized the importance of investing in technology, to control cost, attract customers, and fulfill customers’ needs for convenience and technical innovation .

Accordingly, banks started to compete in expanding their branch networks and providing a variety of delivery channels such as automated teller machines (ATMs), Internet banking and m-banking.

In Egypt, there is a great opportunity to expand in E-Banking Technologies (SSTs) due to both the rapid development of telecommunications and IT networks together with the great diffusion of mobile phones .This calls the need for, understanding consumer behavior and value perceptions towards SSTs in Egypt. Thus,

the paper proposes an integrated framework to investigate consumer’s acceptance and usage or intention to usage of different SST channels, namely, ATMS, Internet banking and E-banking.

Digital modernization gives traditional banks a second chance

A smart, enterprise-wide approach positions them to deepen customer satisfaction and loyalty, driving long-term relationships and profitability. Such an approach also has the potential to meet consumers’ expectations and bring banking back to the bank.

Customer Relationships as New Sources of Value

Digital technology gives banks the opportunity to regain their relevance with customers, and the heart of that connection is data. Every consumer click, swipe, comment and search creates a unique virtual identity that we call a Business Online  Indeed, managing Business Online thinking is vital to banks’ digital transformation.

Customers Are the New Focus

Regardless of their size, profitability and growth demand that banks focus on serving customers at the right time, with the right level of service and at the right cost. Several factors are driving this customer focus. Number one, today’s customers expect personalized pricing and portfolio mixes. Banks that can’t deliver

will suffer reduced profitability. While banks, by default, sell every product to every customer, digital banking allows customization, providing the data and analytics capabilities needed to examine each customer’s profitability and offer individualized or segmented products and pricing.

Digital Banking’s Return on Investment

What is the ROI of digital banking? It’s the combination of lower channel costs, plus increased revenue for the benefit period, minus the cost of deployment amortized over its useful life, multiplied by the internal cost of funds for that period.

The new digital feature set has led to:

  • Improvements in user-experience design through interactive, game-like interfaces that are starting to merge the boundaries between the real and the virtual, and bringing data to life through rich visualizations.
  • Advances in mobile devices and networks, providing new services such as enhanced digital security and the ability to access the internet from anywhere (partially limited by high international roaming charges).
  • The rise of social media and collaboration tools, empowering customers and employees, and moving control of the ‘brand message’ from businesses to consumers.

The growth of mobile has significant implications for banks. As mobile phones get equipped with more and better functionality, it will transform the traditional interaction model with the consumer. Wellappointed branches and slick websites will no longer be enough, ascustomers expect services on the move. Location-based offers, timely and relevant content, and interactive applications will form the basis of the mobile customer’s engagement with their banks.

While the preference for digital can be seen across all segments and markets (see Figure 2)

it is especially important for those customers who form part of Generation Y, now at the point of choosing their main banking provider. Consequently, banks need to target and acquire these customers now to lock in the future value that will be generated by this segment. Our research suggests that the extent to which a bank exploits the new digital feature set will play a very important part in this customer group’s decision-making process, much more so than traditionally important criteria such as branch location, or even brand.


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