Chase believes that digital and traditional banking channels should complement one another, rather than having digital serve as a substitute for the branch network. Because of that, the bank continues to expand its branch network while at the same time making substantial investments in new digital offerings and in creating omnichannel experiences.
The use of artificial intelligence and machine learning algorithms is growing rapidly in the financial services industry. While these tools can provide transformative insights to help better meet customer needs, they also have the potential to create new risks that need to be managed. This is particularly true regarding AI/ML use in the credit approval process.
Are fintechs friends or foes? Many financial institutions either have or are exploring relationships with these companies in order to offer new digital products and services to their customers. But many others lack the internal culture, understanding of customer needs, or technology infrastructure to play effectively in an agile, API-based world. Others are concerned that pursuing embedded banking or BaaS relationships relegates them to a background role in the customer relationship.
Improving customer engagement in a digital world involves moving beyond a transactional perspective to a personalized, holistic model that effectively engages customers across all channels. This involves the effective use of data and an empathetic understanding of customer needs.
“Far too many banks’ strategies for dealing with fintech are backward-looking”. They remain focused on protecting established business models rather than embracing competitive opportunities for change. Open banking, ‘niche neobank’ strategies, addressing customers’ savings needs, reforming overdraft policies, and looking for opportunities at the edges of BNPL are all strategies advocated in the Cornerstone Advisors report.
