The future of digital finance is adopting a banking as a marketplace business model, shifting to a platform with bundled services and customized offerings to gain trust and meet changing customer expectations more effectively.
The timing to move toward marketplace banking—driven by customers, market, and competition—is now. Customer trust has disappeared during the last half-decade, and a significant shift to move from banks to non-bank entities for financial services has skyrocketed. Ernst & Young reported in 2016 that 40% of customers expressed decreased dependence on their bank as their primary financial services provider using non-bank providers for financial services in the last year.
During that time, Apple, Google, Amazon, Facebook, and Alibaba have all played significant roles in the financial sector. Additionally, non-bank players (Wechat, Alipay, and ApplePay) and neo-banks (online-only financial institutions) have forever changed customer expectations and behavior. Intuitive online sites and user interfaces have conditioned consumers to expect a simple ecommerce marketplace-like experience, whether they spend time online for business or pleasure.
So, what should traditional retail banks do? Given the expansion of successful worldwide marketplaces, retail banking industry experts believe retail banks should rethink their role and relevance to customers and ensure their retail banking digital transformation strategies are in place for long-term success.
How and Why Marketplace Banking Works
The rise of fintech offerings in a marketplace banking model is based on an ecosystem of aggregated products and services sharing similar values presented to a customer to address a banking customer’s specific needs. For example, products and services could come from ecosystem partners like retail, healthcare, and insurance to bolster related bank products.
The marketplace banking model is fueled by retail banking software solutions that use guided journeys offering customers predefined paths to help them find what they need to drive marketplace development. With products the consumer banking industry already has bundled with new customized products and services customers need, the industry has tools to help them form deeper relationships, increase brand loyalty, and convert new generations.
GoBear was launched in 2015 to operate an online financial products marketplace that offers more than 1,800 consumer financial products such as travel, health and car insurance, credit cards, and personal loans. Its global success is built upon a sophisticated targeting system matching user profiles to use financial products and has reached 40 million people, mostly in APAC areas.
Canada’s answer to GoBear is PolicyAdvisor.com, aimed to “take away the pain” of searching for life insurance, critical illness insurance, and mortgage protection products for Canadians. Revolut, UK’s fastest-growing super app, offers insurance and wealth management services to customers in-app, giving access to consumer loans, fraud protection, multi-currency accounts, budget tools, daily discounts, and cashback incentives.
In India, Bank of Baroda, the third-largest bank, announced plans to launch an online marketplace to offer banking and farm-related products. Likewise, a Singapore bank took retail banking software solutions to a new level, targeting mothers and mothers-to-be, offering a range of goods and services from health services to baby and motherhood products along with wealth and insurance products. Retail banking industry experts say this emerging banking marketplace model positions traditional banks to serve as a trusted advisor through a customer’s lifelong financial decisions and growth.
Deutsche Bank, one of the world’s leading financial service providers based in Frankfurt, Germany, wanted a new way to serve banking clients in a personalized and innovative manner. Beyond its millions of clients, the bank also has an alumni network of 500+ members representing the next generation of entrepreneurs and investors. The innovative bank launched a mobile app-based community to promote events, encourage engagement, identify peers, and connect with the next generation of its wealthiest customers.
Whether it’s an electricity marketplace to allow consumers to compare pricing plans or a travel platform where travelers can book flights, hotels and get complimentary travel insurance in one place, the move towards a complete retail banking digital transformation is here. A McKinsey & Company report found self-service platforms allow banking customers greater transparency, giving customers more autonomy and higher satisfaction. Further, the opportunity a retail banking digital transformation provides can strengthen customer engagement, spawning new customer acquisition, and lead generation. The convenience, security, and satisfaction translate to a more meaningful customer journey, reducing loss and churn for banks.
How Salesforce Retail Banking Features Help You Overcome these 6 Fintech Challenges
Starting a retail banking digital transformation can be simple when you start with the right tools. Retail banking industry experts find banks often suffer from various technology challenges, unaware of how retail banking software solutions can increase conversions and how a retail banking accelerator can advance your organization. Take a look at some common challenges and solutions you have available to plan a successful marketplace bank.
Challenge 1: Customer journeys are not intuitive.
Sometimes the process of finding what’s appropriate for a customer is time-consuming and leads to abandonment.
Answer: Choose a retail banking software solution that provides guided journeys to offer customers predefined paths to help them find what they need. This solution also assists banks in forming stronger relationships and increasing brand loyalty.
KPI: Drive traffic and monitor your website’s average time until an application is submitted, personalizing the customer’s journey and increasing conversions for your bank.
Challenge 2: Lack of statistics on what customers need.
Most retail banking stakeholders miss out on a great opportunity: knowing what their customers need and want.
Answer: The best retail banking software solutions have advanced functionality leveraging Salesforce Marketing and Commerce Cloud analytics to provide stakeholders insights into a customer’s journey to match their preferences to services and products your bank can deliver.
KPI: Observe the increase in applications submitted, a decrease in cart abandonment rate, and an increased number of conversions toward your specific products and services.
Challenge 3: Visitors are not re-targeted.
For some merchants, a potential customer leaving the website is the end of the journey, but this kind of closure misses a chance to follow up.
Answer: Retail stakeholders can create more intuitive product matches to customer needs when using a retail banking software solution operating Salesforce Marketing and Commerce Cloud analytics to help retarget them in future automated campaigns.
KPI: Check out your visitor conversion rates to see how retargeting customers can influence future conversions.
Challenge 4: It’s a complicated process to apply through a third-party for a loan to purchase a consumer good.
Answer: The robust retail banking features of an accelerator brings new capability to the Salesforce Commerce Cloud, which can facilitate and fast forward the process of buying a consumer good with interest rates.
KPI: Compare increased acquisitions from your retail banking software solution vs. previous sources used before your retail banking digital transformation.
Challenge 5: Mixed solutions between online and offline environment (Back Office issue)
A physical presence and signature are sometimes required even if digital alternatives are available.
Answer: The advantage of using a retail banking software solution, driven by Salesforce Commerce Cloud, is complete digital delivery of all products, allowing customers to handle the entire experience in one space instead of dealing with hassles jumping between the front and back-office systems or third-party platforms.
KPI: Find out how many clients are referred exclusively to your new digital retail banking solution than your previous programs.
Challenge 6: Switching between multiple non-integration applications (Back Office issue)
Frequently, a website will play the role of just a portfolio, and the entire acquisition process takes place in two to three disparate systems.
Answer: When financial institutions use a retail banking software solution that includes multi-cloud integration of Salesforce Marketing and Commerce Clouds to streamline systems, they provide their customers with a one-stop experience.
KPI: Compare the time spent for an agent to manage and close a deal vs. effort toward automated digital customer support and assistance.
The journey to a thriving banking marketplace involves engaging and integrating with the right ecosystem partners to deliver a relevant and robust marketplace. The future of digital banking is best met using a Retail Banking Accelerator for Salesforce, the perfect platform for retail banking, to launch your retail banking marketplace fast at a lowered cost. The opportunity to leverage proven, trustworthy, Salesforce retail banking features using products backed by your bank's credibility is a step toward meeting new customers. The possibilities a banking marketplace offers to strengthen and leverage relationships can bring your financial institution a customer’s lifetime value—and that is priceless.
Have a website but want to leverage technology to attract more clients? Discuss your retail banking digital transformation with the retail banking industry experts at OSF Digital. The Retail Banking Accelerator, developed especially for the industry, helps banks develop a marketplace model fast and at a low price. Innovation like this is how OSF Digital has achieved Salesforce’s Platinum Partner level and earned the highest expert rating from Salesforce for Retail, B2C Commerce, and Consumer Goods. The distinction is rated based on the company’s knowledge, customer experience, and quality.
FOR MORE: Check out how retail banking industry experts developed Deutsche Bank’s NextGen App to help engage the next generation of entrepreneurs and investors.
DON’T MISS: The OSF Digital Retail Banking Digital Transformation Center aimed to supply you with the necessary resources to build your business case to launch or implement a robust, agile ecommerce solution to meet the needs of current and future demands.