The following is a guest post by Ryan. Enjoy!
The evolution of online banking solutions in the last couple of decades has been phenomenal. It has changed everything right from the way we shop to the way we bank. For the banking and finance industry – the evolution of online banking has brought its own share of benefits and challenges; however, there is one thing which is clearly noticeable now – the players in the industry can no more survive without keeping pace with the ever-evolving digital world.
The digital revolution has influenced all aspects of the banking and finance industry – from how customers avail banking services to how the financial market operates. The tech-savvy millennial generation doesn’t simply choose a bank because of its fiscal and social status but also looks for a seamless financial service experience. Banks are, therefore, in need of keeping pace with the digital world and competing to innovate, collaborate and increase their focus on providing superior digital services to their customers.
The need for frictionless banking experience
The customer footfalls in the bank branches have drastically reduced and most of the customers are now fully accustomed and comfortable with a contactless world. The new banking experience is all about clicking few buttons or tapping the cards.
Despite these improvements in card transactions and mobile banking experiences, customers are left asking for more. For example, to access a bank account, a customer still needs to remember a PIN, a password or details to authenticate the transaction. Now with growing number of platforms requesting for similar access details, the customer starts feeling the pressure of remembering too much and verifying too many details. The situation in the mobile banking domain, therefore, is less than ideal.
This is precisely the reason why the concept of frictionless banking has come in to picture. Frictionless banking is the next big thing in the mobile banking domain. Frictionless banking, as the name suggests, is about providing seamless access and hassle-free authentication by using verification features other than PIN, passcodes, and passwords. With customers getting more and more demanding about superior customer experience – the new rule of customer engagement for all types of financial institutions is to keep transactions simple and straightforward, without any friction at the customer’s end.
With the advent of new digital technologies, banks and other financial institutions are constantly looking for new ways to interact with customers and provide them with a more frictionless experience. Biometric data such as iris, fingerprint scanning or facial and voice recognition are now being used as a part of verification processes for a transaction. Location data, digital fingerprints, online behavior of the customer are other ways in which verification processes for a transaction are being conducted to provide frictionless banking experience to customers.
Frictionless banking is the future
Frictionless banking will play a great role in the future because,
- Retaining and attracting customers: Frictionless banking will redefine banking experience for customers; and therefore, it will play a great role in retaining old customers and attracting new ones. With customers finding simpler and hassle-free platforms to conduct transactions, they will come back to the bank again and again. This will translate into growing customer base, increasing number of patrons and, of course, more business for the banks.
- Reducing frauds and forgery: With lesser dependency on the manually fed information, the chances of forgery and manipulation of the system will go down. As frictionless banking platforms are mostly biometrics-based, mistakes such as the customer divulging the password to someone, entering the wrong passwords and any similar manual error will have lesser or no impact on the banking experience. Frictionless banking will, in fact, make banking safer, secure and error-free.
- Making banking faster: With password-free logins, banking would become much faster – it will just be a matter of swiping the fingerprints through a device or tapping the smartwatch. Peer-to-peer transfer, bill payment, and other such transactions will be possible without remembering a single password. Such password-free transactions will be possible 24 hours a day, 7 days in a week.
- Streamlining customer records: With biometrics verification in place, the need for collecting too many identification documents for customers will be redundant. The customer records with banks would be limited to necessary biometric details. This will reduce the piles and piles of unnecessary customer data that a bank has and streamline their records.
- Reducing operational cost: With remote banking experience becoming so seamless, there will be no need of walking into a bank for any transaction. This will bring down the needs of the banks to create more infrastructure, have more staff on the ground to manage the customers and hire additional help to assist the existing staff. Frictionless banking will also allow the customers to be onboarded remotely.
Creating a frictionless banking experience
Banking, now, with the advent of highly evolved technological platforms has become much faster than one could have imagined about a decade back. Several IT and software companies now specialize in assisting banks and financial institutions in innovating newer platforms and making banking more and more customer friendly every day.
From designing customized core-banking platforms to different mobile banking platforms for different operating systems – these companies have evolved with the needs of the customers. With ‘frictionless banking experience’ becoming the buzz word of the future, there are several companies that have come up with innovative solutions for that as well.
