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The New Age Relationship Bank.

The banks of future will heavily be dependent on the relationship as it is predicted that in urban centers, every customer is expected to have more than one banking relation and onus will be on the banks to showcase why a customer should bank with it instead of others and that can be targeted purely by becoming a relationship bank.

The digital banks of future will have to use the digital channels to overcome the cost and complexity of traditional banking, while increasing customer trust and building the best relationship through closely knitted online communities.

Digital banks such as Fidor use social media, communities, data and APIs to better understand and support their customers in an arguably more personal way than branch staff, who might only see customers once a month. Customers of Fidor Bank can access many services from one place by using its app store, which is accessible from a single account.

Banks like HDFC and ICICI offers more than 100 services digitally through mobile app. Banks like Kotak Mahindra in India offering services on twitter and other social channels is becoming more and more engaging as well as a direction towards building a relationship.

To make a digital bank a relationship bank, banks will have to become the best friend of the customer. As human beings, we have our best relationship always with our best friends; banks must eye to grab that spot in the customers’ mind. A digital bank must strike the right cord with the customers based on customers’ persona – for example, if a customer is millennial, help with a job, with the love life and/or with the finances.

For the digital banks to be the relationship bank, it will have to distinguish itself at the digital space by being the best friend, who is available at hand during customers need viz;

  • • Suggestion of buying house property
  • • Comparing different cars
  • • Suggestion about getting into business school
  • • Recommendation for joining the best club in the town
  • • Suggestion for gym or beauty parlor
  • • A preferred access to lounges across airports
  • • Offering suggestions about summer vacations and help getting the best deal etc;

These are some of the ways how a digital bank can become the true friend of customers and in turn a relationship bank. Technology will be the key driver in future for banks to strive relationship while going digital

A Computer Weekly survey of IT industry professionals found the main reason most people go to the bank is to pay by cheque. But this might not be the case for much longer, with banks such as Barclays and Lloyds launching apps that enable customers to pay by cheque using a smart-phone. The next most common reason to visit a branch was to transfer money. Now a seamless digital transfer is available to customers of all most all banks without going to the bank branch. Banks need to build the relationship there by providing the most customer friendly app or digital platforms.

Royal Bank of Scotland is cutting its face-to-face advice service and bringing digital “robo-advisors” to keep the relationship element intact while going digital.

Banks who have taken up the mantra “we are tech companies in the financial services business” ought to pay attention to what Barclays is doing. The London-based global bank formed an information business unit some time back to make the most of the massive amount of information it stores and fundamentally change the nature of its business.

It is confident that data of the bank is a tactical asset that is extremely significant to present as well as futures business. Banks have to leverage the information they have by creating customized value added services for their customers to enhance the banks’ relationship with customer. Data like spending analysis for consumers, local offers based on customer’s preferences, local economic data for small business and, most unusually (though not unheard of) for a bank, digital identity management.

Such offerings show how banks worldwide are trying to expand the value proposition of digital banking. Up to this point, digital banking products have mostly been about enabling self-service, allowing customers to do on a mobile device what used to require a trip to the teller window. But now banks must move beyond simple conveniences and re- imagine their relationship with the customer and its value. That is how a digital bank can become a true relationship bank.