How banks can keep up with digital consumers
By PD columnist, October 26, 2022Kenya’s history is replete with stories of how opening a bank account meant having to visit a physical branch, meet face-to-face with a bank representative and sign several documents.
However, with customers increasingly adopting digital channels to interact and engage with businesses, this signals a new approach for the banking sector where customers are relying on different channels.
This revolution means that more than ever before, one of the productivity imperatives for African banks is reconfiguring physical networks and shifting to digital channels.
Traditional banks are now being compelled to reach out to their customers over their preferred channels, such as SMS, WhatsApp or social media.
According to Mckinsey and Company’s financial services insights, banks need to address the needs of the modern consumer, and this begins with the digital acquisition and on-boarding of clients.
Starting with the initial opening of a bank account, lenders need to assess a client’s application through a simplified and streamlined process. This process should be clear and accurate and capture the client’s details via their preferred channel. In the event of any changes, all details must be updated in real-time to ensure a smooth customer experience.
The next step in the onboarding process is identity verification, where banks need to leverage
Know Your Customer (KYC) checks, combined with application details to form an end-to-end view of the type of client they are dealing with.
By using digital solutions such as photo and video call onboarding solutions to facilitate the enrollment of real persons, underpinned by an enhanced verification layer of biometric facial recognition, the bank can cater to customer preferences.
Based on validated data, KYC checks ensure that banks’ approval and decision-making processes are accurate and efficient.
Fraud, which is opening banking safe, can be flagged early in the process, saving the bank time, money and reputational damage.
When dealing with modern customers, banks need to understand that customer onboarding is a journey, not a transaction. In this case, first impressions last. A bank’s initial interaction with a customer will determine how long this journey will last. Fast and frictionless
interactions play an essential role in acquiring, onboarding, retaining and growing the
customer relationship.
As Mckinsey observes in the “Growth and Innovation in African Retail Banking” report, more banking customers in Africa prefer digital banking to branch banking. Banks need to use digital solutions to ensure efficiency throughout the customer journey. Digital signatures have replaced physically signed documents and one-time passwords are sent via mobile devices or emails, simplifying the process and enhancing the customer experience.
Digital banking customers demand multi-faceted products and solutions, flexible on boarding and activation, without compromising on security. For example, a retail customer may want a credit card and savings account, while a small business owner may need a loan or deposit account. These products need to be accessible 24/7 to serve the digital economy.
To move forward in the digital era, banks must invest in solutions that enable customers to communicate over their preferred channels.
— The writer is the Key Account Executive at Infobip Kenya