Changing customer expectations, accentuated competition from new entrants in the market, and advancements in technology have caused financial institutions to steadily change in the last few decades. Digitisation, supported by a proliferation of new analytical tools, has been the focal point of most transitory strategies undertaken by major global banks. Nevertheless, It was seen that the willingness of customers to adopt these emerging trends was quite inconsistent. The pandemic, however, has wholly changed this norm. It has ushered radical changes in the pattern of consumer behavior, made our economy digital to a point, and has increased customer desire to engage digitally. Digital transactions have increased by 110% in volume during 2021. Having said that, the amount of currency in circulation too rose around 13.2% this year. These numbers could be seen as an indicator of co-existence of the digital and physical world after the pandemic.

Creating Phy Digital Banking experience

Phygital banking is a combination of convenience banking, internet banking, mobile banking, and personalized banking. Self-service terminals for banking form an integral part of the phy-digital experience.Consumers today need real-time solutions for their problems-- an expectation brought to the fore by digital. However, relying only on a digital approach can leave customers with half the experience.

Increase Customer Value and Reduce Costs

As banking businesses continue to build new capabilities, phygital banking significantly cuts costs and delivers high value to customers. Banks will now need not employ a larger workforce or invest profusely in real estate. Although physical branches will never disappear, they will have a few but highly trained employees to solve the customers' problems visiting the branch.Improving omnichannel customer experiences is also crucial. Customers these days want fast and convenient access to all the options available, be it digital or branch banking. Phygital banking offers them the easiest and most viable solution--- one where they can easily shift their choice of engagement with the banks. They can use their mobiles, tablets; leverage the digital facilities installed in a branch such as kiosks and digital walls, to get product knowledge; or talk to bank staff to discuss their queries in person.

Gain Valuable Insights and Anticipate Future Needs

Phygital touchpoints can easily leverage Artificial Intelligence, Machine Learning, and data analytics to extract valuable insights from data banks generate continually. These technologies segregate individualized data, which enables banks to anticipate what a customer might need in the future and deliver bespoke products and services.Digital is not widely accepted in rural areas due to a lack of knowledge and confidence. Phygital Banking is probably the best way to instill confidence. At a juncture, when the world is discussing opening banking regulations to help institutions become more compliant, transparent, and secure (concerning data), phygital banking can work as a true facilitator. Phygital banks can build a connected ecosystem to find prospective customers amongst the 1.7 billion adults who still do not have a bank account.

Improve Bank-Customer Relationship

Phygital banking provides everything required to strengthen the bond with the customers. It ensures the existence of branches and availability across platforms. It leverages holistic solutions and self-service channels to establish trust at every touchpoint and facilitate all sorts of experiences that make the banking journey hassle-free and convenient for customers.

The Future of Banking

Given below are some of the steps on how the banking ecosystem could change in the post-pandemic world.

Enhancing Retail and Corporate Banking experiences

With the elimination of physical banking, customers have shifted towards alternative and contactless modes or channels. With the onset of these new touchpoints, complete integration of all systems would direct towards a comfortable and seamless banking experience. Similarly, corporate banking is also facing significant transformations. The evolution of technology in the financial sector and the integration of ERP systems through APIs has, in a way, given a new meaning to corporate banking by bringing them at par with retail banking.

Constructing an Innovative workspace and workforce

Due to the pandemic, it is acceptable for the banks to reduce branches since most customers now transact remotely. This requires banking employees to be equally agile and drive the digital vision of their bank. That is precisely where the future of banking lies. Combining data with talent is vital to ensure that banking can be hyper personalised to each customer's expectations.From account opening to servicing, adopting a paperless mechanism that automatically requires internal laptops, tablets, and mobiles will help create integrated networks.Even though consumers are now accustomed to the contactless mode of payments, they sometimes need physical touchpoints. Self Service is a viable option for consumers who prefer physical touchpoints, yet prefer to do it themselves at ATMs and self-service kiosks instead of standing in queues at a bank branch.

Using external expertise

Competition in the financial sector these days goes far beyond what it was traditionally. The financial ecosystem is defined by various stakeholders who bring unique capabilities. Banking institutions should collaborate with third parties rather than invest in resources to create those capabilities in-house. The financial sector can use technological advancements such as AI, cloud computing, robotics, and many other features to boost the services.Deploying next-gen governance is also quite crucial. Cybertheft often leads to a loss in revenue and customer base for any bank. Safeguarding customers' private information against cyber threats is a primary duty of a bank. Due to the pandemic, cyber-breaches have multiplied. As digital adoption continues to gain traction, consumers are now demanding enhanced information security via sustainable and innovative governance practices.

Future implication

In response to COVID-19, banking institutions have shown unparalleled agility in reimagining and reinventing their business models to meet market and customer needs. Considering the future, these financial organizations need to harness these changes to speed up their digital transformation. This is essential for surviving and thriving in the current scenario. It has also become crucial for banks to reconsider their role and focus on adding value to the financial ecosystem apart from being a digital accelerator.

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