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Analysis: Customer experience is traditional FI's advantage over digital banks

March 16, 2018

The emergence of digital banks — offering mobile payments, e-wallets and more — is creating new competition in the financial services industry.  

Traditional FIs have had difficulty transforming to meet this competition, as products are similar and highly regulated, and customer decisions are driven by price, according to GlobalData, a data and analytics company.

Meanwhile, digital banks are able to provide access to a global network of services without owning a single office branch. And with applications in a cloud environment, digital banks could develop and offer new products within days, products that would take banks months to develop, GlobalData said in a press release.

Global Data analysis finds that the survival of retail banking will rely on how FIs react to these new and fast-changing dynamics. And they are beginning to take measures, Technology Analyst Siow Meng Soh said in a press release.

"Employees in some banks are starting to directly interact with customers at the counter," Soh said. "This is an attempt to emulate an Apple store experience in a workspace environment. Some banks are even holding Yoga classes on site, reselling merchandise of its local business accounts through its outlets, as well as placing community artwork on display." 

GlobalData cited the example of Standard Chartered Korea, which has established branches inside of department stores to better serve and reach out to their customers, especially beyond banking hours.

Such exceptional measures help to enhance customer engagement and loyalty, the release said.