Banking digitalisation

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Introduction

Banks have to face digitization as well. Consumer demands are changing, and competition is growing with the arrival of new players. At present, few people are still unaware of the development of digital technology in the banking sector. In fact, all banks now have their applications and some of these applications are so extensive that it is possible to have all services online because there are no longer even physical offices (such as KeyTrade Bank or N26 for instance, these are called neo-banks in opposition to traditional banks).

Success story

According to KBC [1], the banking system needs to change. From now on it is the bank that comes to the customer. The ease and freedom of use of phones or other mobile devices has been a trigger. Indeed, while we can now do everything from our smartphone, it was in continuity to offer banking services. In 2018, according to D-rating [2], KBC (and CBC) was the leading traditional bank in terms of innovation and digital offerings on the Belgian market. In the overall ranking, KBC is second, preceded by N26 which is a neo-bank. According to the study, 83% of the Belgian population uses online services for daily management. The banks' online services generally include basic services such as the possibility of consulting the status of accounts, sending/receiving transfers, paying online, ... However, applications now allow more complex uses. The KBC group thus makes it possible to simulate loans, investments, etc. More complex services offered are a huge time saver for consumers. Indeed, they can simulate loans for example by using their mobile application. The simulation takes into account the data that the bank has on the customer in real time and in just a few clicks allows them to project themselves without any problem where a few years ago they would have had to make an appointment to do simulations.

In addition, banks did not say their last words. KBC for instance is diversifying and adding ever more innovative functionalities, each one further away from its core business than the other. The application allows, for example, to send a birthday card as a transfer to send money with a message and a friendly layout when the transfer is received (a confeti jump on the screen for example). But the application also provides goal alert service. In other words, the user can choose a team from the Belgian professional football championship (aka Jupiler Pro-League) and be notified when his team scores. The latest version of the bank's mobile application also offers a series of possibilities to purchase directly through the app tickets or other services. It is therefore possible to buy fast line tickets or tickets to access the lounge of Brussels Airlines directly on the application and even to buy tickets for the STIB or De Lijn, and so on.

Through these examples, it is possible to notice an important change in the banks' strategy. They are diversifying and are now becoming sources of information, small-scale 'social networks' or shopping services.

The future

The banking sector, like many other sectors, has seen a turning point in its mode of operation following the development of technologies. The sector has increasingly placed the customer at the centre of its strategy in order to offer increasingly personalized services. Whether through interfaces or services offered in the application environment, digital technology is imposing a new vision for the industry.