Insight

How Customer Centricity Drives Digital Transformation in Banking

Customers today are heavily reliant on a digital or mobile-first approach and want banks to provide enhanced hyper-personalization. Therefore, banks in the modern era have changed the way they operate by utilizing emerging technology to transform their business.

Customer centricity is leading to a new era of digital transformation in banking.

Defining Customer Centricity

Customer centricity was defined by Shivakoti & Mohanavelu (2020) as knowing what customers desire in terms of product features and their interactions with businesses that are ingrained in business processes. This is also consistent with Rajagopal's (2020) research, which claimed that the concept of the customer-centric approach is to comprehend consumer demands and create suitable products.

Customer centricity is a powerful call to action that elevates ideas about client relationships, client service, and client lifetime value. The focus of significant choices is placed on the consumer when there is good customer-centricity. Loyalty, customer happiness, and advocacy may all be developed by providing exceptional products, services, and experiences.

In order to promote repeat business and higher profitability, customer-centricity refers to determining how much your brand is influenced by the pleasure of its customers and how much attention is given to customers throughout every element of your bank, from start to finish.

The Importance of Customer Centricity in Banking in Digital Transformation

Being customer-centric means anticipating a customer's wants, needs and communication preferences. And then getting it right. You can create memorable experiences and develop enduring relationships with your customers if you can accomplish this. However, one mistake might cost you valuable clients.

Customer expectations are at an all-time high, and fintech companies are waiting in the wings to stake their claim on market share, so banks must recommit to intuitively knowing their customers and pleasing them wherever possible. Although technology can assist you in achieving these objectives, without a solid customer-centric strategy to act on, it’s little more than expensive window dressing.

Banks must have a holistic 360-degree view of customer insights to develop innovative, high-quality services as fintech players have transformed customer experience and engagement models. Banks must focus on their digital transformation journey that delivers digital experience for their customers.

How does customer centricity drive digital transformation in banking?

1. Digital Workforce Transformation

Embracing digital tools is to fundamentally change how people work and collaborate. Through digital tools, employees can work together, be more agile, and share knowledge freely. Therefore, cross-functional teams can collaborate closely, fostering an environment that is creative and innovative.

2. Big Data as a Competitive Advantage

Customer insights is the new currency in the market. Combining big data with less unstructured data streams and putting them into machine learning offers banks with flexibility and high-performance computing capabilities. Thus, they can manage their risk exposures and get more customer insights.

3. Cloud to Stimulate Digital Transformation

Cloud infrastructure is the foundation of successful banking. It serves as a base for operations and on-demand software that can be hosted and maintained by the cloud. This results in internal and customer-facing business processes via internet-based technologies that allow for efficient coordination and automation.

4. Advanced Cybersecurity

Banks must be ready to defend against cyberthreats. To assure customers that their data is secure, advanced security technologies are needed. Banks that empower their own defensive teams and use artificial intelligence to evaluate operation and support decision-making will have a competitive edge.

Conclusion

Digital transformation in banking is the operational and cultural shift towards integrating digital technology to optimize operations and customer value delivery. In addition, prioritizing customer centricity within your process can leverage customer data and insights which is hugely beneficial.