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The debate of FinTechs displacing traditional banks is fast losing relevance. The present debate is how can banks become more digital and design their financial services and operations to be custom-built for teeming digitally-inclined customers. The debate is all about how traditional banks can increase their market share. Experts have warned that banks which do not incorporate 100% digital technology into their banking services will soon find themselves licking their wounds for a long time to come. 
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According to the Digital Banking Report, enhancing the customer experience has become a top priority for banks, as they continue to realise its importance to their future success. The big truth is this: leading banks like Zenith Bank, Access Bank, First Bank, and UBA Bank will have to contend with the likes of Flutterwave, Paga, Kuda, Paystack, and what-have-you. To compete in this new battlefield, there’s a greater need than ever for banks to hasten their transformation and improve their ability to deliver more seamless digital experiences. Nonetheless, this will be strenuous for banks that depend heavily on legacy IT environments and will demand a fundamental rethinking of how their operating models should work. In this article, I drafted 4 strategies Nigerian banks can deliver a seamless digital experience. 
  1. Formulate An Action Plan.
The first line of action for banks is to draft a strategy that centred around “100% digital-readiness” in all of its operations. This will require them to invest in new service delivery models to meet the ever-changing needs of their customers. This should comprise of focusing greatly on automation, to make the customer experience as without glitches as possible. With innovations such as zero obstacle loans processing and AI-enabled chatbots, banks can facilitate tremendous accessibility and convenience in the way customers interface with financial service providers.  Furthermore, the principles of open banking are also becoming more crucial, as companies increasingly see the importance of embracing platform-based business models. These models allow banks to collaborate more freely with other service providers to provide more seamless digital experiences. For example, they could allow customers to access a mortgage capability directly through a property platform’s app or website when buying a house, rather than having got to approach the bank separately. 
  1. Steering The Charge.
Co-opting 100% technology into the financial system as a traditional bank is challenging. The truth is that available IT operating models in these banks aren’t designed to meet the needs of customers or tailored towards customer experience innovation or third-party collaboration. Data is stored across multiple silos, making it difficult to access and share freely to improve customer explorations and collaborate with other service providers. To be more digitally savvy, banks must be able to connect these data silos, along with third-party information, and make them more accessible. This is crucial to better understanding and meeting the needs of their customers, both directly, and in partnership with others.
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To make this connection possible, banks should make themselves more open-minded by being composable. Composability is a system design principle that deals with the inter-relationships of components. By being composable, it means banks should adopt API-led integration to uncover data and digital facilities for others to consume and deliver as part of their service. With this technique, organisations replace rigid custom code with a flexible integration layer that seamlessly connects all devices, data sources, and applications. By putting in place an API in front of systems and data sources, it is much simpler to use those facilities in future integration projects.  Becoming a composable business also enables banks to accelerate customer experience innovation, by allowing them to see their digital assets as a network of reusable business capabilities. This means both experienced developers and business technologists – employees outside of the IT department – can utilize extant capabilities to build new digital banking services, without having to start from scratch or write any code. It also makes it easier for third parties to quickly add the bank’s facilities to their products by plugging in the relevant API. This unearths new opportunities for banks to increase their revenue, by enlisting into new value chains. 
  1. Driving The Advantage.
Banks can easily drive the advantage because they have the necessary database and customer pool to work with. By adopting an API-led approach, not only can banks develop more seamless customer experiences, but they can defend themselves from strengthening competition by unlocking new revenue streams and scaling their services into new markets. For instance, banks can easily pivot into becoming providers of foreign exchange and cross-border payment services, which will see them benefit first-hand because they embrace an API-led integration strategy that can help them support a rapidly growing customer base. Similarly, banks can adopt APIs to become more composable, so that they can seamlessly connect with FinTech partners and address a greater number of transactions. This technique will be pivotal to stimulating the seamless digital banking experiences that customers expect. To enable this, banks need to make APIs a strategic focus, to drive greater agility, improved customer interactions, and a digital-ready attitude. It’s this approach that will set banks ahead of their rivals and ensure they win in the customer experience battle. Featured image source: Business Post Nigeria
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This article was first published on 17th February 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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