We are seeing greater potential for collaboration between banks and FinTech startups to redefine the customer experience. Ultimately, the goal is to provide consumers with intuitive mobile banking services that includes loyalty initiatives for more convenient and flexible redemption.
Besides innovating to meet the evolving consumer needs, banks need to ensure that their innovations comply with the regulations placed on them. How then should banks balance innovation with regulatory compliance?
In recent years, the financial services landscape has been exposed to a number of factors that have had an impact on the way providers now need to operate, think and act. Stricter rules and regulations in the financial services sector have and continue to be implemented to help prevent a repeat of the 2008 crisis. Based on a 2015 Collinson Group report, 57 percent of Singaporean respondents in the financial services industry cited regulatory pressure as a real cause of concern for their business. In light of this, banks need to balance investment in activity that drives customer engagement with investment in regulation and compliance.
For example, the reduction in interchange fees on debit cards in some Asian markets is already under scrutiny which may well be an early indicator of forthcoming pressure for counties in the region on both debit and credit cards. These markets should start thinking about and preparing for new ways to replace the revenue that could be lost if, or when, the reduction in fees applies in the region too. One approach is to look to partnerships with merchants who are prepared to part-fund rewards in return for access to mass affluent customers. Providers would need to create a compelling value story where merchants would see the incremental value they could get from such activity.
What does the future of retail banking look like to you? What should banks be banking on to futureproof themselves?
The future of retail banking will see significant investment and also important decisions about the type of services banks will offer in the future. The year ahead is a chance for financial service organisations to trial new projects, and test new loyalty initiatives to build bank-wide loyalty to retain profitable customers and even attract new ones. Below are five ways in which banks can adapt to futureproof themselves against disruptions in the industry.
1. Personalising the brand experience
Firstly, banks need to think about personalising their customer experiences in order to build and sustain loyal and satisfied customers. Banks need to position themselves as a destination for multiple services, so that relationships become sticky and engaging, and their customers can trust them to operate as a 'one stop shop' for multiple products and services.
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