For even the most modernized traditional retail banks to remain relevant, data-centric hyper-personalized CX and continual end-to-end DX are critical prescriptions.

In a recently released retail banking report by non-profit organization Efma (in collaboration with Capgemini), data suggests that banks must meet increasing customer expectations with omnichannel, personalized experiences that are engaging and agile.

With neobanks and nimble fintechs eating into the existing banking space, it is now incumbent upon the Chief Marketing Officers of traditional banks to become customer strategists—using data-driven insights to design hyper-personalized, automated experience to drive growth and relevance.

Beyond investing in infrastructure, how can banks with complex legacy data infrastructures to retool to meet the challenge? Elias Ghanem, Global Head, Capgemini Research Institute for Financial Services shared some insights from the retail banking report with

DigiconAsia: Can you summarize the challenges faced by traditional banks in delivering services aligned with customers’ needs and wants today?

Elias Ghanem, Global Head, Capgemini Research Institute for Financial Services

Elias Ghanem (EG): We are witnessing increased competition between mature new-age banks and modern banks. These mature new-age banks are consolidating their customer base and market influence to disrupt and threaten what incumbents hold dear: market share, margins, and customer base.

On the other hand, we expect banks to continue pursuing cost transformation agenda and in-parallel future-proof their business model with ‘platformication’.

Platform models will help banks to unlock latent market potential and create long-term sustainable value. We see strong traction and demand for cloud transformation in the banking sector, and this is paving way for banks to effectively leverage their data trove.

While data has always been the most important yet underutilized asset for banks, we expect to see more banks build analytics capabilities and orchestrate data ecosystems to uplift customer experience (CX).

In terms of challenges, retail banking is witnessing heightened expectations from ‘new customers’! Thanks to their exposure to likes of Google and Apple, they have come to expect the same experience from their banks.

Unfortunately, our data shows that 29% of respondents did not find banking to be seamless and on-demand; 45% did not find their banking experience to be value-adding; and 47% did not find their banking experiential.

The root cause could be structural challenges faced by banks in the customer lifecycle: the survey showed that 82% of respondents who were bankers were lagging in identify new customer segments; 55% were failing to offer seamless onboarding; 49% lagged in delivering personalization; and over 50% failed to engage customers in the long-term.  

DigiconAsia: How can structural banking challenges be combatted by modernizing infrastructure to power data-driven growth?

EG: A lag in infrastructure modernization can be a critical mistake for banks. They need to look beyond just modernizing infrastructure and must pursue end-to-end transformation.

In the global retail banking report, 95% of respondents who were banking executives had indicated that existing legacy systems and core banking systems were inhibiting transformation efforts.

This not only translates into missed opportunities (to grow) but also hurts the overall CX.

Transformation requires banks to build a robust foundation using microservices API-led Cloud-first architecture that can plug-and-play third-party offerings with ease. This will help banks to eliminate internal silos, embrace new and emerging technology efficiently, reduce costs and go-to-market times.

DigiconAsia: What is the emerging role that Chief Marketing Officers (CMOs) canl play in the evolution towards providing a true omnichannel retail banking experience?

EG: We believe that CMOs will be at the helm of banking transformation. The mandate of CMOs is expanding, and they are expected to don multiple hats.

Beyond their core responsibility of marketing and branding, CMOs are expected to contribute towards enhancing CX, building digital capabilities, and driving product innovation.

This trend positions CMOs as the Chief Customer Strategist who can co-ordinate and collaborate with other C-suite executives such as Chief Data/Digital Officer, Chief Technology Officer, Chief Innovation Officers, etc., to drive a cohesive customer-journey led approach to transformation, powered by real-time data capabilities. 

DigiconAsia thanks Elias for sharing his survey insights here.