As technology drives changes in consumer behaviors and expectations, banks must become the indispensable "Everyday Bank"—positioned to fulfill their customers’ financial and non-financial needs, a report said.

Today’s banks can be central to lifestyle purchases, in the same way that social media and providers like Amazon have become central to retail purchases. Or, they can remain on the periphery, handling strictly financing and fund transfers, according to Accenture, a global leader in management consulting, technology and outsourcing services.

Banks have a place in our online, ever-available, user-friendly and intuitive world. Yet they must find and claim their space quickly. Already, innovators like Google Wallet, Square in the US or iZettle in Europe, and Alipay are moving into banking territory—presenting a new, competitive challenge in the industry. By 2020, more than 30 percent of banking revenues could be at risk thanks to new competitors and new trends.

The crossroads

As technology drives dramatic changes in consumer behaviors and expectations, it uproots traditional transactions for all players—including banks.

Cloud data storage, predictive tools derived from big data and omni-channel marketing and distribution mean a higher volume of faster, more scalable transactions, not to mention a more robust and satisfying consumer experience. Consumers have come to expect a more personalized shopping experience, one wherein products are recommended based on past behaviors and where excellent values are presented routinely.

The fact that 20 percent of customers changed some or all of their retail banking products in 2012 is tied at least in part to their increased expectations, driven by all technology can do to make transactions engaging.

Today, customers want their resources to be fingertip-ready. They expect data instantly, as quickly as they can pull a mobile phone from their pocket and tap in a query. In five short years, at least three of every four customer interactions will be online or mobile. That’s technology on the go.

Banks have a place in our online, ever-available, user-friendly and intuitive world. Yet they must find and claim their space quickly. Already, innovators such as Google Wallet, Square in the US or iZettle in Europe, and Alipay are moving into banking territory, presenting a new, competitive challenge in the industry.

By 2020, more than 30 percent of banking revenues could be at risk thanks to new competitors and new trends. To respond, banks must make their move, the report said.

Everyday Bank

To win in this environment, banks must become the indispensable Everyday Bank—positioned to fulfill all their customers’ daily financial and non-financial life needs.

An Everyday Bank offers a complete customer solution, driving continuous daily interaction. Using digital levers, this bank evolves the entire business model, opening access to new business sources, new customers and new profit pools. This bank convenes a digital ecosystem, assembling existing provider partners and other key players, creating digital connections and establishing equitable value sharing. The bank reinvents itself as a value aggregator, advice provider and access facilitator.

In short, the Everyday Bank places itself at the vital center of a digital village of its own design, one driven by the bank’s digital engine. The Everyday Bank acts proactively—and smarter—on social networks and in every personal interaction, to improve reputation and trust, where digital technologies can also help.

By creating connections, the Everyday Bank brings together an extended ecosystem of provider partners offering goods and services in every area of home and consumption, health and protection, travel and leisure, communication and transportation.

These offers are optimized for a digital world and, presented in an omni-channel setting, they delight the customer. Tapping big data, the bank comes to know its customers well, and can offer just-in-time, relevant discounts and offers, pre-sale advice, post-sale support, cross sale opportunities and more. The human voice is not lost in this shuffle. Human touch is delivered in high-value settings, providing expert advice and guidance at the customer’s moment of truth.

Behind the curtain, the Everyday Bank is highly industrialized, with automated front- and back-office processes that are integrated and optimized for speed, efficiency and scalability. A high-functioning Everyday Bank can:

•    Slash back-office effort up to 80 percent

•    Reduce its managed applications portfolio by 70 percent

•    Cut time to market by 40 to 50 percent

•    Increase operating income by 25 to 35 percent

The power of digital, realized

For banks that can exploit their digital levers to build these new capabilities, the rewards are immense. These banks can increase customer interactions by up to 250 percent. Their partners in the digital ecosystem realize higher sales volume, while customers enjoy a richer, more intuitive experience—increasing their loyalty.

Banks at the center of their own digital village more easily acquire and retain new customers. They can count on deeper customer relationships and increased profits, thanks to a higher volume of lower-cost transactions. With robust pre- and post-sale activities, they gain additional service fees.

Banks, in fact, are uniquely positioned to construct this digital village. Thanks to the rich data they possess about their customers’ purchasing and spending habits, banks occupy the perfect space, leveraging their very secure data management capabilities: They can ensure ecosystem partners—merchants, service providers and other retailers—get point-of-purchase access to buyers.

At the same time, they anticipate customers’ needs and point them to ideal providers. Add in economies of scale, and banks are able to offer better pricing and higher value to both customers and merchants.

Certainly, it’s not all about the bank. As we’ve seen, partners in the digital ecosystem gain increased traffic, improved customer targeting and higher sales volume.

Most importantly, customers gain efficiency from this digital world. They enjoy an improved experience that meets their increased expectations, while saving time and money in a more personalized and trusting relationship.

The Everyday Bank:

•    Provides advice

•    Offers point-of-need access to goods and services

•    Acts as a value aggregator, by building economies of scale—delivering lower costs to consumers

The Everyday Bank brings with it pricing transparency, trusted advice, social recommendations and transactions—as easy as one click.

Following the path of the Everyday Bank will bring banking success in today’s increasingly digital, competitive world. Accenture can help banks navigate the complex journey toward differentiation as an Everyday Bank, thanks to our strong set of skills, assets and capabilities honed through our own transformation to digital. – TradeArabia News Service