What makes a digital bank? More importantly, what makes a digital bank that's capable of thriving, innovating and applying new technology?
Incumbents must embrace technology, adapt to a dynamic and rapidly evolving market and leverage innovative approaches to offering financial services. It's a tried and tested statement that most in the industry know, if not already live by.
But what actually constitutes a digital bank? There are, according to Accenture, several key traits that many of the world's leading digital retail and commercial banks have in common. In it's Are You Really a Digital Bank? Ten Key Questions to Assess Digital Maturity report, the global services organisation explains that these patterns demonstrate whether a bank is progressing towards becoming a "truly digital" business.
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And while that success in the digital sphere can be linked to market value premium or superior operating economics, Accenture's checklist is wide ranging and encompasses a multitude of key areas. These include, for example:
- Having a mobile-first distribution model and a customer engagement strategy that, despite any other channels used, begins with considerations around mobile experience. In particular, due to new entrants to the market gaining significant traction with mobile-only service offerings, an outstanding mobile experience will be crucial for incumbents if they are to be successful.
- Using data and analytics powered default processes to replace manual work in the back office with intelligent solutions that can drive down costs, improve levels of service across the board and allow for a greater volume of customers to be served.
- Considering income streams and operations within the business model that lie outside of traditional banking processes and services. These could include, for example, embracing non financial services and building a closer relationship akin to that of a day to day advisor.
- Becoming truly data driven and using public cloud architecture
- Embracing Open Banking, particularly by way of understanding its true impact and approaching tech and infrastructure issues with a new mindset akin to that of a trader rather than a "protectionist".
- Having a culture that values technology and engineering skills and attributes. Hiring tech talent is an issue across any number of industries, and it doesn't look like this will change any time soon. To fully embrace digital banking, organisations should see that a "tech mindset permeates every level". Naturally, this shouldn't be to the detriment of leveraging the skills and attributes of successful technology partners, which Accenture says should be used to replace "low-cost offshore workforces" and to "co-innovate and provide surge capacity for critical initiatives".