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Very few banks have capitalized on
understanding customer needs, for now

The most common hesitation we hear around digital transformation is the fear that the bank will lose the ability to have meaningful interactions with customers and miss the opportunity to cross-sell in the branch environment. The problem is that customers, especially younger ones, are already digital first and open to looking at alternatives.

The greatest gap within digital banking today is the ability to identify customer needs and surface relevant products to address them. Simply having a journey for a customer to open another account or product is not enough. Digital banking platforms remain woefully under-commercialized, which is a big issue as they are now the primary touchpoint with customers. Indeed, a digital transformation strategy that does not at its core involve a transformation of how we sell will fall short.

Underlying this lack of commercialization is the fact that many organizations (especially outside of tier 1 institutions) still see online banking or banking apps as servicing channels that simply contain the products that the customer holds. They are yet to shift their digital strategy to treat apps and sites as engagement tools first and functional servicing solutions second.

The risk for the banks that choose not to double-down on winning engagement is disintermediation. Third parties and non-bank providers have the potential to get in between the bank and the customer. Open Banking in the UK is designed to do just this: look no further than products like Apple Card (with Goldman Sachs sitting in the background) or Citi’s upcoming Plex account that will exclusively be distributed and serviced via Google Pay, to see how banking products can quickly be pushed to the background.

In short, if banks do not sell to their customers, someone else will. However, there are actions banks can do now to mitigate that risk...


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