Digitising banking services isn’t enough

The latest in a series of observation pieces following our attendance at the biggest and best banking events in the world, our report from the 10th Annual SME Banking Forum in Vienna focuses on how the digitisation of banking services is just a stepping-stone to a more elusive – but ultimately more valuable – outcome: personalised, relevant and timely digital interactions.

The move towards digitisation

The forum in Vienna bought together a targeted SME focused audience, with the aim of exploring the current state of the SME banking landscape, understanding business owners, and gaining insight into the latest product and technology innovation.

It was a great chance to hear from many major European banks about the challenges they are facing in serving SMEs.

Not surprisingly, every single bank talked about the importance of shifting their services to be available digitally, with the key drivers being:

• Customer behaviour and expectation
• Pressure on profitability and cost to serve
• Digital competition
• Technology innovation

What was new in Vienna was that every single bank also made it clear that simply shifting their existing services into a digital world is not enough – that’s merely a hygiene factor.

Becoming customer friendly through digital services

Today’s SMEs are already fully immersed in a digital lifestyle. Whether paying bills or applying for a loan, they’re choosing companies that interact with them online and through their mobile devices. They now expect experiences that are not only convenient, but also highly personalised based on deep knowledge of their likes, needs, and even their future plans.

Coupled with (or perhaps symptomatic of) this, many customers feel disengaged from their bank. There is a general sense that banks don’t treat them as an individual, providing a one-size-fits-all service and only offering guidance on the bank’s terms (in branch, 9-5) – if at all.

There is therefore a digital imperative to provide personalised guidance and services that are both scalable and profitable. Many FIs have made significant strides with omni-channel investments, particularly in streamlining transactions.

The next step of the journey is for banks to evolve the kinds of dynamic, personalised interactions that consumers now demand, and to deliver the right interactions to the right customer segments at the right time.

Beyond digitisation: changing relationships

Paradoxical though it might seem, the movement away from bricks and mortar banking to the digital sphere can actually help deepen customer relationships.

Beyond the basics of supporting online and mobile transactions such as payments and transfers, there’s the opportunity to provide financial tools that help customers make decisions – not just support transactions.

This new personalised experience is about data – that must be tailored and timely; it’s about tools – that must be easy to use and understand; it’s about insights – that genuinely help a small business owner to make better decisions.

Relationships with customers can be vastly improved by helping them to make the right choices in a complex, fast paced and often confusing market environment – and also by staying in touch and being available when problems occur.

The success of a digital relationship is based on making processes simple – not just the app or the screen design. This requires clear and easy-to-use products, timely communication and pro-active instead of reactive support.

All of which informs the BCSG approach to nurturing SME relationships: handpicking applications out of a confusing multitude of options to target key business needs; offering a curated set of apps chosen from market-leading providers; and offering full support throughout the customer lifecycle, both proactively and reactively.

Take a look at our resources section for more information on small business fintech and enhancing digital banking for SMEs