Reported by: banking|Updated: November 22, 2017
Digital is redefining just about every industry today and the financial sector is at the forefront of this trend. India is no exception, with the government seeing digital transactions as a major part of its Digital India vision: the government has set an aggressive target of 25 billion digital financial transactions by March 2018.
Digital transformation in the banking sector is also being driven by another key trend, namely mobility. India is one of the largest smartphone markets globally and Indian consumers are more likely to use mobile banking apps than their counterparts in other countries, according to a recent survey by Avaya. The ‘Customer Experience in Banking’ survey, commissioned by Avaya and conducted by researcher YouGov, shows that Indian consumers prefer a digital-first approach to accessing banking services, so banks need to deliver the experiences customers are looking for. And they need to get those experiences right – the same survey shows 37% of customers would change banks after bad service.
There are several ways financial service providers (FSPs) can digitize; however, among these are two forms of digital engagement that must be considered for driving revenue and competitiveness: chat bots and biometrics.
THE BOT-FILLED WORLD
Chatbots are already instrumental to today’s digital banking revolution and meeting customer needs. We’ve rapidly evolved to a world of virtual, conversational agents that drive specific user experiences. According to a recent Forrester Consulting study, more than 93% of consumers in India engage with chatbots between once a day and once a month.
This Chatbot ecosystem is only expected to further grow as the technology sophisticates. As it does, FSPs will be able to effortlessly automate processes like fraud detection, fund transfers, insurance comparisons, payment processing and more. As they do, they’ll be able to reduce costs by up to 80 percent and time to perform tasks by up to 90 percent, not to mention the benefits and value of the customer satisfaction they will drive.
THE POTENTIAL OF BIOMETRICS
The future of identification/ authentication in banking can be summed up in one word: biometrics. We’re seeing major players now leveraging physical characteristics (i.e. fingerprint, voice/face, keystroke) to support automated recognition.
Consider Apple’s 2012 acquisition of mobile security company, AuthenTec; a move that undoubtedly set the stage for its 2014 rollout of Touch ID and Apple Pay. Today, just two years later, Apple Pay now leads the mobile payment market with over 12 million monthly users.
Biometrics represents an important step in FSPs’ digital transformation plans considering the reality of mobile security today. Nearly 90 percent of customers believe their banks do enough to protect their mobile apps, yet 41 percent still expect those apps to be hacked. Overall, the global biometrics market is expected to reach $17 billion by the end of this year, having grown at an incredible CAGR of 18.5 percent over the last seven years.
There are enough examples of how bots and biometrics are changing the way we bank and enhancing customer engagement and experience in India. As we move forward, the technology around chat-bots and biometrics will only become more secure, cost effective and will see mass adoption. It’s an unparalleled opportunity for the FSPs today.
Successfully adopting these technologies, however, will require a fully-baked strategy with support from the right partner, policies and the right approach!