A few weeks ago, the IEB published a report entitled “The digital transformation of Spanish banking”, which was produced by a number of banking experts and aimed to provide a snapshot of the current state of Spanish banking.
Academics in innovation and financial technology, partners involved in the digital transformation of Spanish banking such as Telefonica and Accenture, and key players such as FinTech spoke to the most important banks in Spain in order to find out how they are responding to the current need to develop innovative strategies in the sector.
At the end of 2014, Euroestat stated that there were 13 million Spaniards between the age of 15 and 74 using online banking. This amounts to 37%, well below the European average of 49%, and far from Norway, which leads with 89% of banking online users.
Nevertheless, Spain enjoys a very high percentage of mobile users, with some 78% of the population having access to a mobile broadband connection. This should make it easier to accelerate the expansion of banking digitalization in the coming years.
According to the IEB study, only 7 of the 21 banks consulted have more than 50% of their customers using multichannel services, predominantly those with a large number of customers under the age of thirty.
For this reason, the main focus of the majority of digital transformation projects is on existing channels and platforms and the use of these services by their customers.
Experts have drawn up the following ABC of challenges involved in adapting to new consumer behavior and in making technology available to all. And banking, which is well ahead of other sectors, is working closely with tech companies to implement a forward-thinking strategy.
Main challenges for digital banking
- Agility: need for digital skills, partnerships and focus on people.
- Business: selling through digital channels. New digital products, hence new business for banks.
- Customer: the customer as an essential part of the strategy. Customers expect to have access to personalized products.
Banking institutions don’t only compete amongst themselves; their main competitors are now the large technology companies. Customers are demanding much more than a service, they are looking for experiences. “Consumers demand the innovation of Apple, the user experience of Amazon, and the free, user-centred products of Google”, states the study.
Big Data, the great opportunity
The exploitation of Big Data is one of the greatest opportunities for the banking sector today, as banks possess vast quantities of data on their customers. And customers are looking for even more personalized offers and service. The key is in finding the correct strategy to follow, as customers will need to appreciate the value of using this data if they are going to allow the bank to take advantage of it.
The relationship between the customer and the bank has changed. Customers manage their assets and accounts online, which is the ideal place for data analysis and projections of future behavior. The information is an extremely valuable raw material.
Commitment to security
Cybersecurity is the main cloud hovering over the digital transformation of banking. Security is an ever-present issue and banks are extremely conscious of its importance. New channels mean new threats, and banks, acutely aware of the risks both to their customers and to their own business, have equipped themselves with and implemented the best cybersecurity technologies and methodologies. Given their experience in this area, they are very well set up to deal with the threat.
Written by María Gallego