According to Statista Global survey, as of April 2023, there were 5.18 billion internet users worldwide, which amounted to 64.6 percent of the global population. Of this total, 4.8 billion, or 59.9 percent of the world's population, were social media users. Mobile has now become the most important channel for internet access worldwide as mobile internet users account for 91 percent of total internet users. Also, the survey found that consumers in the 18-24-year-old bracket are the heaviest users of digital products/channels, with 82% of smartphone owners in this demographic segment using mobile banking. It is clear that customers’ hunger for digital and mobile interaction for banking services won’t stop growing hence banks need to adjust to this new “norm”. The banking industry has been working hard to deliver a better experience on digital channels but in today’s world, consumers have more power to choose from different products and services at their fingerprint 24/7.

Hence, digital channels no longer just represent “a cheaper and convenient way” but are a critical aspect in executing promotions, stimulating sales, and growing the market share of banks. The challenge for banks isn’t just to create and deploy new technology to facilitate simple transactions (e.g. transferring money or checking balances), but to rethink how to build and maintain relationships with their digital customers and to provide value to customers throughout different life stages. Therefore, to keep up with digital customers, banks need to take a different approach to managing their digital customers. In this article, I will share a few things that banks need to do to manage digital customers.

1. Invest in Advanced Analytics – Banks must invest in advanced analytics of a large amount of financial and non-financial data at their disposal to gain a 360-degree view of their customers. Banks can only achieve this by being vigorous in the collection of customer data, by investing in and developing systems that mine consumer data, and by partnering with Fintechs to develop behavioral financial models. Through the data collected, banks will obtain a broader perspective of customer activity, transactions, mental state, and emotions, allowing banks to become more relevant and contextual. Digital customers’ behavior is completely different from traditional ones, therefore, banks will be able to learn the behaviors of their digital customers and provide recommendations on what products and services fit their customer’s lifestyles and goals. This is only possible because banks can craft a compelling customer experience where all the interactions are specifically tailored to a customer’s needs at any given time.

2. Build an Agile Marketing Plan – To manage digital customers, banks need to support their countless interactions and must find ways to be more agile in their marketing operations. Currently, banks tend to launch campaigns focused on pushing a single product at a time across a range of channels. This approach will not yield desired results from digital customers as they are more sophisticated and easily bored with the same selling message of products/services. To serve digital customers, banks must be willing to conduct a lot of small-scale marketing activities involving a variety of products and third-party providers using advanced digital tools and processes. These small-scale marketing activities must be supported by a marketing team that has the right digital skills and tools to create and maintain creative marketing campaigns that relate to digital consumers. Building an agile marketing plan will take time, therefore, banks must embrace a new approach and ensure the entire staff is aligning with it.

To summarize, banks need to re-invent to remain competitive digitally. In 2020, 33 percent of consumers were using digital channels to purchase their banking products. Now, that has risen to 45 percent according to the European Retail Banking Radar 2023 report. Hence it is my firm belief that the future of the banking industry will depend on its ability to leverage the power of customer insights, advanced analytics, and digital technology to provide services and products to its digital consumers. To provide products and services to digital customers, I shared that, banks need to invest in advanced analytics to obtain a broader prodder perspective of digital customers’ activities to be able to offer tailored services and products to them. Also, I stated that banks need to build an agile marketing plan that will relate to the digital consumer’s appetite.

Written by Kelvin Mkwawa, MBA

Seasoned Banker

Email address: Kelvin.e.mkwawa@gmail.com