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Comparing progressive vs traditional banks’ digital progress post Covid-19

Providing a view into the status of financial institutions digital transformation across the US, banking consultancy CCG’s recent survey ‘The Banking Battleground: Views From the C-Suite’ considers the attitudes and capabilities of banks toward digital in a post-pandemic world.

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Comparing progressive vs traditional banks’ digital progress post Covid-19

Editorial

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In her foreword, director of research Kate Drew observed that while the pandemic may have accelerated the shift to digital, that trend was very much already in play.

“Is it fair to say no one could have predicted the events of 2020? The pandemic, perhaps. The digital revolution, not so much. The point I am trying to make is that it’s important to understand where the market is going even in normal times and how that impacts your business. It’s those institutions with a constant pulse on the industry that are generally the best prepared for any environment. The first step in this journey is to look at what your peers are doing.”

CCG’s report surveyed 109 C-level bank executives between December 2020 and February 2021, with a view to providing lessons for banks that may be lagging behind in their own future-proofing efforts, as well as those interested in understanding where their peers are headed.

Using a set of criteria the report split respondents into two groups, traditional and progressive, and analysed how the different groups approach the market and positions themselves for the future across four areas: retail banking, commercial banking, segmentation/targeting and product development, and technology and innovation.

In the retail banking area, customers at banks in the progressive group were much more likely to interact primarily with their bank via mobile that those at traditional institutions, where nearly a quarter still use online banking and a handful remain on analogue channels. This may suggest that online banking is becoming less essential than mobile banking, and CCG’s data also suggests that those banks focused on the online experience may be missing the mark.

The report states that “banks today should be looking toward this inevitability and making sure to deliver seamless experiences that are device agnostic.”

Digital account opening is also becoming more important, and while 8% of banks in the traditional category still don’t provide this option, a majority are able to open an account in 30 minutes or less. The report observes that as digital account opening cements its position as a must-have proposition for retail customers, the competitive background is likely to shift to how fast and how seamless the experience is.

Commercial banking is still lagging on the digital front, and while commercial banks made progress across digital onboarding in response to the pandemic, fewer than half of all institutions are able to open accounts fully online. Among those which do offer some form of online account opening, the progressive tranche of institutions are generally faster, with one third able to do so in under 10 minutes.

Other key findings from the report include:

  • 39% of progressive institutions now offer digital loan origination to their business customers, compared with 30% of traditionalists.
  • 87% of progressive institutions have a well-defined strategy and customer base for their retail operations, 81% said the same for their commercial business. Only 58% of traditional institutions surveyed have this well-defined strategy and customer base.
  • With respect to API capabilities today, 76% of progressive respondents reported achieving full access to and control over data inside of their organisation, compared to just 49% of traditional institutions.
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