5 min read

Insights From Digital Retail Banking Disruptions Happening Around the World

The pandemic accelerated change in several sectors, and one such disruption was the digital retail banking disruption. Prior to COVID – 19, digital banking had not reached its full potential. Most retail banks were stuck to the old ways of banking and focussed more on in-person service rather than upgrading to digital solutions. 

However, the pandemic forced banks to move towards mobile banking apps out of necessity as customers were reluctant to physically visit banks. Whether it is online payments, digital wallets, purchasing insurance policies or even applying for loans, users prefer having the option to perform all their finance-related transactions on reliable digital platforms.

Another emerging trend is how these digital platforms can make the entire finance experience fun, engaging and delightful for customers. They are no longer satisfied with complex and tedious applications. Retail banking needs to evolve and stay up to date with changing consumer needs and increased digital penetration. It has become evident that banks need to understand how to drive digital customer engagement while keeping customers satisfied and loyal.

As the pandemic has fuelled digital-first behaviours in customers, they are seeking faster and more convenient digital banking solutions to accomplish everyday tasks like paying bills and depositing checks. With physical branches closing and their own workforce working virtually, banks need to strengthen their digital infrastructure and make efforts to digitise while also keeping in mind security and protection against cyber attacks, as the data they have is extremely confidential. They will also need to make an effort to simplify the user experience so that simple tasks are not tedious and cumbersome and leverage new and emerging technologies like IoT, AR/VR and blockchain into current practices.

1. In-person experiences have been replaced by digital technology

In-person-experience

With customers unsure about physically visiting the bank branches, and more and more branches facing closure, banks have tried to retain customers by implementing new forms of live interactions, contactless touch screens that will enable users to accomplish simple tasks by themselves and newer technologies like AI chatbots. Banks will need to move towards a more robust digital infrastructure and invest in well-designed Fintech products, as they will help smoothen the user journey, cut down operational costs and errors and automate most processes for financial institutions. They will have to focus on scalability, quick iterations and building digital products faster. However, in-person experiences will continue to be important and cannot be completely replaced. Instead, banks should look at how they can use digital channels to drive in-person engagement.

2. Targeting a new market – millennials and Gen Z

Millennials and Gen Z are the future of banking and have grown up being familiar with digital technology. They are used to a certain kind of user experience and will not settle for outdated, less than perfect, outdated systems. To cater to their needs, retail banks will have to start redesigning their products around customer behaviour to enhance customer experience. Banks that have been able to design app features that drive high mobile usage such as push notifications, enhanced customer experience and other innovative capabilities have the potential to grow five times faster than their competitors. 

Advanced fintech capabilities that marry innovation with secure financial offerings has seen rapid and consistent growth in the world. Fintech design focuses on using state of the art technological capabilities to make financial transactions more secure, approachable and simple for the user. 

One of the major trends in Fintech is making the design of their digital products as user-centric as possible. One of the main Fintech design principles is to simplify the customer experience through digital product design and make it more user-friendly. Gamification is one of the emerging trends in banking app design to simulate healthy financial behaviour by using gaming elements like rewards, points, badges, spending tracker etc. Gamified fintech platforms can help boost customer engagement by delighting customers during a process that is usually monotonous or uninspiring. A Fintech design agency can help retail banks move towards a gamified personal finance app. 

The second trend in Fintech is tailor-made design. Design is one of the strongest tools that a Fintech agency can use to create a unique brand identity, that targets its users, solves their pain points and provides better solutions as compared to its competitors. 

Finally, the third major trend for Fintech UX and banking app design is the age of super apps. 

Users are now demanding a single digital touchpoint that can meet all their financial needs. They do not want to be bogged down by having to download 10 different apps for different transactions. Building a super app that has a bunch of useful features and functionalities but is still simple, user-friendly and intuitive is the need of the hour. For this designers need to incorporate emerging technology like blockchain, big data, cloud computing etc.

4. Startup Disruption

Retail banks by partnering with fintech companies and banking startups can move towards developing operating models that are lean and agile. They can provide them with technology that will enable them to become fully digitised and perform better in the long run.

RBL Case Studies

RBL Bank created a strong financial system by using digital technology to become lean, responsive and in tune with customer’s changing needs. Founded in 1943, RBL Bank was a regional bank serving small and medium businesses in Maharashtra, India. With new leadership taking over the bank in 2010, RBL had a new vision of becoming a bank that would serve the whole country and bring advanced banking services to Indian businesses and individuals with fast changing needs and expectations.

Technology played a critical role in the transformation of the bank to a new age entity that was future proof.

The bank utilised the emerging opportunities created by advancements in digital technologies to attract the digital savvy young population of India. They chose an enterprise class system of engagement that powers insight driven personalised customer experiences across channels, applications and devices. Through their community-driven approach and pioneering approach to open banking and  close attention to customer needs, they created an entire banking system.

From 830,000 customers in 2014 they grew their customer base to 6.5 million customers in 2019. RBL’s story of continuous innovation and customer focus has brought it a long way from its modest roots in Kolhapur. They are now poised to be a key player in the Indian banking market for both retail and corporate customers. 

Conclusion

Designing for BFSI means to build and nurture connections with users and create a user-friendly domain that genuinely cares about its customers. They need to be more user-centric and create a personal finance app that solves its customers problems. By driving digital transformation and moving their organisation towards a more agile, customer-centric structure, retail banking can adapt to the digital disruption brought on by big tech and accelerated by the Covid-19 pandemic.  

Published by Venky Hariharan

Lead UX Designer

Venky Hariharan Lead UX Designer