Staying ahead of digital transformation in hyperdrive

Accelerated by the COVID-19 pandemic, consumer adoption and usage of digital banking and payment experiences have grown exponentially in recent months, pushing the timeline for digital transformation into hyperdrive. It is no overstatement to say that changes taking place today will redefine banking forever.

To thrive, financial institutions are compelled to advance their digital strategies to keep pace with – and even get ahead of – rapidly changing consumer expectations.

According to Fiserv data, just between March and April, digital banking usage grew at twice the typical rate. Mobile banking logins were up 34 percent, mobile check deposits rose more than 30 percent and P2P payments though financial institutions using Zelle via Fiserv more than doubled.

While usage and transaction volumes are up, they center primarily on traditional banking transactions. There remains significant opportunity to enable the more complex, higher-value banking interactions that still require customers to call the contact center or visit a branch to complete.

The AI effect

Today, 40 percent of U.S. adults report using a virtual assistant at least monthly. Nearly 90 percent of Millennials and Gen Z use voice assistants regularly, while half of Boomers and 42 percent of seniors report using AI-driven voice technology.

With more than 150 million smart speakers in the U.S. and voice assistance technology touching so many aspects of our lives, the use case for “conversational banking” is here. Now is the time to accelerate the application of this technology in banking, as people have become more comfortable using it in their everyday lives.

Transactional banking and financial advice via smart watches, speakers and even cars will quickly become the norm as consumer expectations change and competition increases. Banking will become more approachable, proactive and user-friendly, and a mindset of “set it and forget it” will emerge as the entire banking ecosystem becomes more intelligent.

Financial institutions have an opportunity to integrate into other value chains to make the banking experience more personal. The digital possibilities are seemingly endless, with easy access to the fintech ecosystem through open APIs and new technologies embraced by consumers.

Imagine a customer who decides to order a special takeout dinner for her spouse’s birthday. She can ask her virtual banking assistant how much she can afford. The virtual assistant researches her account balance, scheduled bill payments and predicted future transactions based on her historical spending and deposit patterns. She’ll hear a suggested budget, recommended restaurants in her price range and even be connected with the preferred food delivery service in her area.

This access to account, transaction and aggregated data can be used to proactively help her save and budget for goals, promote responsible financial behavior and protect against fraudulent activity.

Staffing for future success

Digital transformation is not only about accelerating new capabilities like AI and data automation, it is also about ensuring the right people and internal processes are in place to facilitate a future-forward vision.

Financial institutions need strong internal digital foundations to effectively present new solutions to customers. Evaluating culture and willingness to adapt is the first step. Assess the digital proficiencies of existing staff, from frontline workers to senior leaders, and their ability to embrace the digital shift that’s underway. Having strong, digital-focused leadership is key to creating an environment that fosters alignment, accountability and action, while frontline staff are more likely to promote and discuss digital capabilities with customers if they’re personally comfortable with the technology.

When analyzing your talent strategies, consider measuring digital aptitude as part of the hiring process and rolling out digital-first training programs. By doing this, financial institutions can ensure the right people are in place to advance digital transformation.

The COVID-19 pandemic is forcing us all to rethink how we serve customers and remain relevant in a rapidly changing, digital-centric world. Ground will be lost if financial institutions revert to traditional strategies and operating models. The “next normal” is here, driven by consumers who expect innovative technologies and complex digital banking services to be integrated into their daily lives.

At this stage, financial institutions can keep their edge by looking ahead and delivering the digital banking experiences that customers expect, today and into the future.

 

Byron Vielehr is senior group president of payments and digital solutions at Fiserv.