Are Financial Businesses Still Successful?
It is hard to imagine a world without banks. Yet, the global banking industry has been through a lot in recent years. According to McKinsey's Global Banking Annual Review, decisions made in the next 18 to 24 months will determine which banking institutions will maintain their positions and customers. Indeed, the pandemic has not driven abnormal losses for banking institutions, and many have managed to remain profitable between 2020 and 2021.
Unfortunately, while the pandemic has not directly affected banks, it has driven a wave of innovative solutions and technologies across the market. Remote working, digital revolution, and sustainability interests are the major disruptors in the banking sector. Shareholders demand new value, which can be tricky to generate in a traditionally capital-intensive sector. Banks need to focus on resilience, adaptability, and innovative growth to appeal to their post-pandemic market. So what are the options for today's banking institutions?
In a world where everything is rapidly moving to the digital sphere, banks can't afford to neglect their digital presence anymore. Unfortunately, many customers complain about complex websites that are difficult to navigate or understand. That's precisely why it has become essential for financial institutions to work with expert bank website design providers who are familiar with the unique challenges of the sector. Combining ADA website compliance with an approachable and modern image is no easy task. Yet, banks can't maintain their inaccessible content and jargon any longer. Building a modern and friendly image that ticks all the boxes without scaring customers away is a no-brainer.
Premier services are essential VIP options dedicated to attracting high net worth clientele. In a post-pandemic world, however, high net worth clients may have different needs and expectations. Indeed, it becomes essential to redefine valuable clients as the global economy experiences a high inflation rate. The US inflation rate accelerated to 7.9% in February, the highest it's been since January 1982. For banks, bringing premier services to clients that may be less profitable today could help in the long term with the economic recovery. Providing preferential services to lesser affluent clients may speed up the recovery process.
Digital banking is not a novelty. But there is still a lot of work to bring digital banking to every customer. Senior citizens are often left out with tech solutions that fail to take their needs into account.
However, an important statement is to realize that seniors are not necessarily against the idea of embracing new tech. Indeed, 81% of customers aged 60 to 69 own a smartphone, 62% of customers over 70 own and use one. Yet, seniors are cautious about digital banking. Why? Mostly because banks continue to promote pen and paper administration and management for older customers. It is time for bank counselors to help their older clients make the most of digital technology.
Making digital banking more accessible begins with strategic decisions to ease seniors' concerns. High-security policies must be in place to prevent frauds and mistakes, so seniors can feel more confident creating and even forgetting a password. Indeed, providing different steps to recover a lost password or confirm someone's identity is crucial to promote accessibility.
Crypto investments are growing in popularity. Yet, too many banks fail to make their service available to the cryptocurrency world. Crypto banking is going to be one of the biggest trends in the future of banking. Indeed, by providing customers with the option to manage their digital currency through their traditional bank, financial institutions can cement their impact and influence on the modern economy.
Crypto banks can explore ways to make traditional services available to crypto investors, such as providing crypto interest accounts and crypto checking accounts.
Many banking institutions in South Korea have a unique service for customers who love Kpop. Customers can receive a credit or debit card with a photo of their favorite band, including ENHYPEN, BTS, TXT, etc. You might think that many banks already provide personalized card design options. But, there is more to the Kpop trend than meets the eye.
Indeed, customers could also benefit from unique discounts and offers through partnerships between the banking institution and other businesses or between the Kpop band and other businesses. Customers could obtain special rewards when they purchase music albums or merchandise with the Kpop credit card. The financial project launched by HYBE, the company behind BTS and many other bands, and Weverse — one of the most influential social media platforms for Korean musicians — was announced in 2021.
Nobody chooses debt. More often than not, debt occurs as a result of poor financial management, bad decisions, and lack of knowledge. The average US student leaves college with a debt of over $32,000. It makes no doubt that providing dedicated support to young professionals to help them make the most of their banking services can make a huge difference.
Many students and professionals are not familiar with budgeting best practices and available funding options for their situations. If banks were to provide access to financial training resources and advice to help people navigate their way out of debt safely and avoid many problematic decisions, how many people could regain their financial independence?
Another important issue that many banks fail to address is investment options. Helping clients build their first investment portfolio by explaining the risks and advantages of different strategies could avoid many poorly-informed decisions. For instance, inexperienced investors may be tempted by volatile assets such as crypto or forex trade, which receive a lot of media attention. Yet, they could benefit more from investing in a safe asset such as gold, which can guarantee long-term stability.
Withdrawing money can come at a cost depending on the ATM network. Similarly, international transactions can also have a hidden fee. There are many situations in which clients pay more than necessary to access or use their money. We can only dream of a future world where bank transactions and activities will come for free wherever we are.
Can bank institutions remain relevant in a modern environment? The phenomenal crypto and digital growth highlight the limitations of banking. Traditional banking must evolve to provide a safe, people-focused, and modern environment for all customers.