Where does banking stray from it’s digital path?

Aug 11, 2020

In digitization, banks fall into laggards or innovators – and many other shades in between. Banks face challenges of siloed landscape and efforts, while holding the pace of continuous digitization. These circumstances open many struggles whose complexity shouldn’t be underestimated. But still, some are succeeding, some cope well, others fall behind. Years of working with banks in Adria region, from humble digital beginnings to turbulent digital race, give a valuable perspective. Where does digital stray from the path instead of making businesses of the future?


1.     Focus on Your Customer, Instead of Your Product.

When banks offer standardized products, they focus on the short-term revenues, which become a decisive parameter whether or not the product sees the light of day. Additionally, these sets of products demand support. Operational roles for support and managing the governance rules come with a cost that doesn’t add to customer satisfaction.

Lets take a look into personal accounts. Banks offer a variety of them, believing they’ll satisfy different groups of customers (young, old, etc.). Instead, users are tired of comparing similar products of different banks, presented in a way that prevents a fair comparison. Their only wish is to manage finances seamlessly and be able to do a simple transaction banking completely online.

The main parameter when forming an offer should be what customers need. Customer data, collected through the years, give satisfying ground for automated and personalized offer that’s budget sensible.

Focus on your customer, instead of your product
Focus on your customer, instead of your product

2.     Nobody Wants to Do the Banking.

Too often, banks advertise online services that are only partially digital. Like online account opening, when customer can only fill in the data, but still has to prove his identity personally.

A few months ago, my bank sent me a reminder to update personal information. Later I’ve learned that it was a KYC procedure they do every 3 years. It could only be done through an online bank or personally. Unfortunately, I only use a mobile app for years now, so I had to do it during my lunch break. Once already there, I’ve decided to cancel one of my credit cards, although my yearly subscription was still active. To my explanation that I don’t intend to visit the branch in two months only to cancel my card, my advisor was clearly stunned.

But here’s the thing – users want to be able to use financial services wherever and whenever – only not at the bank. Digitalize everything: speed up the processes and give customers the flexibility and freedom to view and close the request online (through web and/or mobile device). Automation and artificial intelligence can deliver significant benefits, not only for a bank’s cost structure, but for its customers.

Users want to be able to use financial services wherever and whenever – only not at the bank.
Users want to be able to use financial services wherever and whenever – only not at the bank.

3.     Automate Processes: Your Employees Are More Valuable in Complex Interactions.

What’s needed for all processes to run smoothly? Reviewing customer disputes on credit or debit cards, reviewing documentation, processing loans, making sure payments are processed properly, etc. Hundreds of thousands of bank employees perform similar tasks every single day. Such processes are expensive, time consuming and prone to human errors.

When I applied for mortgage, my advisor told me to wait for a few weeks, for a final approval from some sort of commission. A long month passed before I was finally able to purchase my flat. By chance, I later saw that this ‘some sort of commission’ were two over occupied employees, double checking all application to satisfy the four-eyes principle.

Automating all these processes will reduce time, as well as the possibility of a human error, and above all, significantly improve user experience. On the other side, banks’ employees will get spare time to help customers with complex, large, or sensitive issues that can’t be addressed through automation.


4.     It’s Time for Inevitable Cuts in Organization.

Modern banking is about building a relationship that’s more meaningful than the transaction one that banks traditionally have with their customers. It looks more like a partnership, attuned to the customer’s needs. This customer-centricity requires banks to re-evaluate what they know about their customers and better understand who their customers are, what interests them, and what they value.

To thrive in a world where personalized interactions have an integral part, important organizational changes have to be made. The most important one is integration of resources with different capabilities and knowledge. Once siloed roles, like loan approval, compliance and risk management, are now becoming an integral part of product development and customer experience.

Banks need to develop a plan of migration to a journey-based organization. This means inevitable cuts across currently established siloes.

Banks need to develop a plan of migration to a journey-based organization. This means inevitable cuts across currently established siloes.
Banks need to develop a plan of migration to a journey-based organization. This means inevitable cuts across currently established siloes.

5.     Retail Banking: Where to Start?

Onboarding and new product origination in retail banking are traditionally challenging and time-consuming processes.  They often involve manual tasks for both employees and customers, providing paper-based documentation, scheduling in-person visits, filling in lengthy forms and lack of consistent omnichannel experiences. The result is increased customer drop-off and decreased new account openings, as well as high operational costs for the bank.

Looking up to the best in the industry, banks have to consider how to optimize current customer experience in onboarding & origination user journeys.



ID verification​

​Facial recognition, smart biometrics, ​OCR-based document scan and validation,​ make onboarding a frictionless and easy process for a new customer. Users can scan their faces, passport/driving license, using their mobile or web camera in a matter of seconds, anywhere and anytime. Onboarding process’ fully integrated KYC/AML requirements automatically apply, due to diligent procedures on each application to improve compliance and operational efficiency. If needed for customer authentication, video call component can easily be added to the process.

Virtual cards  

While waiting for their physical card to arrive, retail bank customers can generate a virtual card that allows them to make payments immediately after onboarding.

Account funding  

After completing the onboarding process, users can fund their accounts by connecting to their existing banks in a secure and straightforward way.

Origination journeys  

While applying for a product like a home loan or mortgage, users are empowered with tools allowing them to define their ideal loan conditions – amount, time duration, monthly payments, interest rate, etc. Customers nowadays expect a process that is fast, straightforward, digitally intuitive and personalized to their status.

Customer origination approach helps retail banks reduce time needed for the home loan application and remove obstacles to create a frictionless, digital experience that customers love. Digital onboarding & origination process should provide significant value in this domain by making available a wide variety of self-service capabilities for customers, using both web and mobile apps. The result is increased customer satisfaction and reduced operational costs, as the load of customer service department is minimized.

Pre-filled forms 

While applying for a new product, e.g. mortgage, customers can verify their existing bank information and eliminate the need to fill in duplicate data. New user experience provides pre-filled forms, by tapping into the bank’s existing user information, in order to make the process more seamless and personalized.

Digital documents upload 

Supporting documents like valuation reports, employment contracts and proof of income, can easily be provided during a product origination journey. Users can quickly upload these on any device and eliminate the need to visit a branch to complete their product application. Once the application has been submitted, customer request will automatically generate a task to review the customer details, along with all documents.

Conclusion: Digitize Your Staff and They Will Digitize Your Bank

“Digital transformation“, as a term, is regularly misused. It’s hard to modernize the way of working when tremendous efforts bump into hierarchical principles and mindsets that are not accustomed to innovative and agile approaches. Additionally, good intentions are often spoiled by the legal/compliance boundaries.

A solid proof that it doesn’t have to be like that are Singapore banks. This tiny country is leading digital banking market, since opening an account at one of Singapore’s digital banks will take from 21 to 27 clicks. The only one that can follow this Singapore gang’s speed is Revolut (24 clicks).

To conclude, I’ve borrowed smart words from Neal Cross, a former Chief Innovation Officer at the Development Bank of Singapore (DBS). Neal believes that the combination of innovation culture and technology is vital for a digital bank. We couldn’t agree more.

Nenad Marić
Nenad MarićBusiness Development Manager

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