# Change is inevitable – how banks need to adapt to customers’ new banking habits Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-05-31 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: How Traditional Banks Can Up Their Game for 2021 Meta Description: Discover why traditional banks are falling behind in the digital age and how AI can help provide a more personalised customer experience. Read now! URL: https://financedigest.com/change-is-inevitable-how-banks-need-to-adapt-to-customers-new-banking-habitshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/new-banking-1736838305711-compressed.jpg) _By **James**_ _**Adie,** VP of Sales, EMEA, Ephesoft_ During the past year, the way we use technology has moved on. We’ve learned how to take ourselves off mute in a video call and discovered just how many of life’s needs can be delivered to our doors. We’ve persuaded our older population to use Zoom or Skype, shop on the internet and even use [online banking](https://www.financedigest.com/dutch-online-bank-bunq-applies-for-u-s-banking-licence.html "Dutch online bank Bunq applies for U.S. banking licence"). Since the start of lockdown, [mobile phones](https://www.financedigest.com/mobile-phone-insurance-brand-loveitcoverit-launches-in-ireland.html "Mobile phone insurance brand, loveitcoverit, launches in Ireland") have become indispensable to an even larger portion of the population. The 4G masts in city centres may have [fallen silent](https://www.forbes.com/sites/advisoruk/2020/10/08/mobile-phone-use-surges-during-covid-lockdown/?sh=3749707e62df) but elsewhere our use of mobile devices – particularly for apps such as social media and banking – has [skyrocketed](https://www.digitalinformationworld.com/2021/03/people-during-pandemic-have-spent-most.html). This acceleration in [digital transformation](https://www.financedigest.com/future-of-finance-2023-digital-transformation.html "Future of Finance 2023: Digital Transformation") has taken most sectors by surprise. Even retailers, who have been gearing up for [years for the transition to online shopping](https://www.financedigest.com/scam-special-how-to-avoid-christmas-shopping-fraud-this-year.html "Scam Special: How to Avoid Christmas Shopping Fraud this Year"), suffered glitches as their supply chains groaned under the strain. For many banks, however, the progression has been even more painful. Traditional [banks may have made hurried improvements to their mobile](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") apps and successfully handled a sharp increase in contactless payments, but so far, they have failed to wow their consumer clientele. In the meantime, nimble [fintech startups have taken advantage of their digital](https://www.financedigest.com/the-future-of-fintech-forging-ahead-with-digital-transformation.html "The future of fintech: Forging ahead with digital transformation") origins and stolen a march on their larger, more established rivals. In this year’s regulatory [review of the quality of personal bankin](https://www.ipsos.com/ipsos-mori/en-uk/personal-banking-service-quality-great-britain-february-2021) g, conducted by Ipsos Mori, customers awarded the top three places to internet banks: Monzo, First Direct and Starling. The highest-scoring “traditional” high street [bank](https://www.financedigest.com/traditional-banks-threatened-by-diminishing-customer-loyalty.html "Traditional Banks Threatened by Diminishing Customer Loyalty"), NatWest, appears down at number eight. Part of the problem stems from the fact that [banking customers](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") are suffering from the perception – real or imagined – of a lower level of service as ever-more bank branches close. Traditional [banking was built on trust](https://www.financedigest.com/how-can-banks-overcome-the-tech-trust-gap.html "How can banks overcome the tech trust gap?") and personal relationships, but with Covid-19, that is no longer possible. Instead, chatbots give us standard responses, phones are slow to be answered – if a number is available at all – and the nearest branch could be 15 miles away. We may be happy to check our bank balances online, but we’ve lost the feeling of connection that we once had and unless the traditional [banks can up their game in terms of customer](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") service, many people will be moving over to new competitive alternatives. My own view is that the industry needs to focus on the 80/20 (core/noncore) rule of automation to provide a more personalised [customer experience](https://www.financedigest.com/how-will-open-banking-impact-the-customer-experience.html "How will Open Banking impact the customer experience?"). To apply this rule, an organisation must first identify how much of its core functions are data-based. [Artificial Intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-magazine.html "Artificial Intelligence in Banking Magazine") (AI) must then be applied to at least 80% of these, analysing and learning from information in order to find trends and opportunities that can determine and predict customers’ needs. In a bank, these functions might include approving a mortgage, helping with a car loan or even opening a current account — in essence, anything that [improves customer experience and journey](https://www.financedigest.com/how-artificial-intelligence-can-help-improvethe-customer-journey-in-insurance.html "How Artificial Intelligence can help improve the customer journey in Insurance"). The 20% part of the 80/20 [rule refers to those functions that are not core to the business](https://www.financedigest.com/new-credit-rules-and-regulations-for-banks-what-does-it-mean-for-businesses.html "New credit rules and regulations for banks – what does it mean for businesses?"), such as handling electricity bills for thousands of branch offices, upgrading server hardware or even paying for TV ads. This part of the business needs to be automated too, but to do so [banks can use no-code or low-code integration platform as a service](https://www.financedigest.com/20-billion-in-bank-service-fees-are-you-overpaying.html " Billion in Bank Service Fees: Are You Overpaying?") (iPaaS) components, robotic process automation (RPA), business process management (BPM) and intelligent document processing (IDP). These can easily be combined using citizen developer-based solutions, connectors and APIs. With major advances in these no-code and low-code platforms over the last several years, employees can develop their own applications or automated platforms without the help of IT, giving them the ability to simplify their department’s processes without the [need for major investments](https://www.financedigest.com/5-reasons-why-women-need-to-get-into-property-investing.html "5 Reasons why women need to get into property investing") of time or money. This intelligent automation strategy could free up [bank employees to focus instead on customer](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") service and to deliver more personal attention to their customers. [Banks are potentially in a good position](https://www.financedigest.com/token-solidifies-uks-position-as-open-banking-leader-with-successful-payments-for-all-cma9-banks.html "Token solidifies UK’s position as Open Banking Leader with Successful Payments for all CMA9 Banks"). The [stock market](https://www.financedigest.com/the-secret-to-stock-market-success.html "The Secret to Stock Market Success") is doing well, and those people whose jobs have not been affected by Covid-19 have spent less over the past 12 months while maintaining a steady income. Money is starting to move again. But without change, this won’t be enough for long-term [success in banking](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION"). Implementing the 80/20 rule will help [banks automate](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") their core and their secondary functions, ultimately improving productivity and freeing them up to focus on customer satisfaction. Moreover, automation will improve their ability to analyse [customer data to deliver](https://www.financedigest.com/how-partnerships-fuel-fintech-innovation-and-help-banks-deliver-a-better-customer-experience.html "How Partnerships Fuel Fintech Innovation and Help Banks Deliver a Better Customer Experience") hyper-personalised services. In short, re-creating a one-on-one relationship with their [customers will be possible with the right technology](https://www.financedigest.com/businesses-are-investing-in-technology-to-improve-customer-experience-but-many-are-still-falling-short-of-giving-customers-what-they-want.html "Businesses Are Investing in Technology to Improve Customer Experience, but Many Are Still Falling Short of Giving Customers What They Want"). Covid-19 has turned many of us – even those of more advanced years – into digital-first users. The days of face-to-face banking are over, so personalised [customer service](https://www.financedigest.com/video-collaboration-is-pushing-the-boundaries-of-the-customer-experience-in-financial-services.html "Video Collaboration is pushing the boundaries of the customer experience in Financial Services") is going to have to be delivered differently. [Offering convenient and easy-to-use digital](https://www.financedigest.com/digitization-to-offer-stewardship-to-the-robotic-surgery-market.html "Digitization to offer stewardship to the Robotic Surgery Market") apps is essential, but it’s not enough. It’s vital that [banks automate their systems through AI and cloud solutions to improve customer](https://www.financedigest.com/how-will-the-introduction-of-digital-banking-impact-customer-perception-and-overall-loyalty.html "HOW WILL THE INTRODUCTION OF DIGITAL BANKING IMPACT CUSTOMER PERCEPTION AND OVERALL LOYALTY?") satisfaction ratings. If they don’t, they are at risk of being [disrupted by an entrepreneur who has a better grasp of the digital](https://www.financedigest.com/the-road-to-digital-disruption-in-motor-insurance.html "The road to digital disruption in Motor Insurance") future. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---