There is a popular saying that data is the new oil; and to remain competitive and profitable over the longer term, banks will need to be the custodians of large amounts of customer data.
In this race banks will be competing with fintech companies as well as non-bank technology companies. The catchword here is ‘technology’ which will be critical not just to capture customers’ bank transaction data but all non-bank data and create a unique value proposition for customers to transact on the bank’s platform.
Customer retention, therefore, will not just be about owning customer accounts but also managing the customer’s financial relationships and transactions.
It goes without saying, that a superior user experience anchored by conversational banking and hyper-personalised servicing will be the winning mantra. In an Open Banking ecosystem, this, of course, is possible only through alliances, collaborations and integration with the right technology partners.
The strategic importance of customer retention for banks is expected only to increase in the future with growing competition in a shared economy. As banks strive to position themselves as the right partner for their customers, the key to survival will lie in the strategic use of digital technology solutions, to build a business model that provides its customer the best user experience at the right price point.