Banking is facing a paradigm shift in the customer experience as the industry moves away from pure accounting and must address globalization and broader market strategies. Transactional banking providers are now competing against banks not in their footprint and third-party systems and apps that are serving as the clearing house and cutting deep into margins.
Transactional banking is set to become one of the biggest providers in future growth for the financial services sector, but it also has one of the largest cost-savings opportunities if it encourages the adoption of smart technologies such as enterprise content management systems.
ECM Simplifies Competition
At the heart of changes in transactional banking is the fact that non-core operations are becoming more important as banks look for newer sources of growth. Competition in new areas and from new brands is shifting the balance of risk and reward for traditional transactional banks.
Transactional banking was preciously viewed as a traditional and stable source of low risk revenue. To maintain this goal, financial service companies need to look at growing markets that present more traditional opportunities or have simplified competition. Some of the areas to start with include South America, Africa, as well as parts of the Middle East and Asia.
Growth in these economies will present many traditional opportunities in transactional banking. To capitalize on them, financial services should turn to new technologies such as enterprise content management (ECM) platforms because of the improvements they offer to customer experience and in addressing competition.
An ECM will help larger banks and brands work with local firms in these new markets, but still present a unified face to the customer. This will allow customers throughout a country to have the same experience and allow small brands to address competition from large competitors in a single move.
Adopting this technology gives small companies a leg up by partnering with large firms who can present marketing, customer education, best practices and top customer rates for transactions across footprints both large and small. Facilitating this network of growing partners is one the key benefits of an ECM.
Paradigm Shifts in Flexibility
Outdated systems are cutting into transactional banking margins because they process transactions more slowly and cause more bottlenecks during high-volume periods.
The next stage in tech is a platform like an ECM that can handle multiple forms of transactions in a single system, supporting analysis and data-driven insights through its collection and management of data.
For example, the traditional combination of paperwork for custody payments, trade finance and cash management creates a hodgepodge of documents that don’t have a clear linear progression. The paradigm shift the market is facing comes when these disparate components are able to create a profile of retail, financial and corporate customers who might have multiple needs.
To properly capitalize on its consumer base, the bank must become a technology company as much as it is a financial company. This would allow its core platforms to track users who rely on mobile banking — especially in areas where only SMS banking is an option — versus economic shifts that lead to more sole practitioners with differing long-term financial needs and goals.
Transactional banking is able to perform at almost any level, but an ECM allows for better analysis at all of these touch points in order to create the most accurate customer persona and build new transaction models or services based on that data.
Reducing Complexity in Transactions
At the heart of IT systems improvements, including those delivered by an enterprise content management system, is a goal to reduce the complex nature of payment systems. Whether replacing an existing vendor or developing a new platform in-house, revenue is being spent on simplification.
Complexity has become a characteristic that makes customers less trustworthy, whether they’re a large multinational corporation or an end-consumer who wants a small business or home loan. Fragmented systems deliver inconsistent experiences and may harm interactions by slowing down delivery or adding unnecessary steps to acquiring funds.
Enterprise content management systems allow a bank or other transactional financial institution to make the experience uniform. That not only eases the ability to deliver financial products — but it also gives more protection against unnecessary risk and complex fraud rings.
Customer Experience Is King
A positive customer experience is imperative. And, in order to facilitate it, streamlined processes regarding internal content must be reified and actualized via ECM or similar technologies.
Responding to the paradigm shift in transactional banking requires technology that is properly focused. The customer experience guides all revenue streams and is becoming more important as globalization increases — as well as the competition along with it.
Banks must adjust to the customer demand and deliver a positive experience on the customer’s terms. This means adopting the interaction methods — from phones and online platforms to neighborhood branches — that consumers prefer. Instantaneous decision-making becomes more possible with ECMs guiding your approval process, and that falls in line with the modern consumer.
The next step in transactional banking is a smart, digital platform-based operation that meets the demands customers are more than willing to share.