In a recent article about the digital banking trend, McKinsey & Company writers, Sonia Barquin and Vinayak HV, state that the digital banking revolution has just begun and that it is currently in its first phase. In this first phase, most traditional banks offer their customers high-quaily web and mobile sites/apps. The second phase approach will be one where digital becomes not merely an additional feature but a fully integrated mobile experience in which customers use their smartphones or tablets to do everything from opening a new account and making payments to resolving credit-card billing disputes, all without ever setting foot in a physical branch.
The demand for the second phase of digital banking is increasing. In the survey done for this article, "in developed Asian markets, more than 80 percent said they would be willing to shift some of their holdings to a bank that offered a compelling digital-only proposition. For consumers in emerging Asian markets, the number was more than 50 percent. Many types of accounts are in play, with respondents indicating potential shifts of 35 to 45 percent of savings-account deposits, 40 to 50 percent of credit-card balances, and 40 to 45 percent of investment balances, such as those held in mutual funds. In the most progressive geographies and customer segments, such as the United Kingdom and Western Europe, there is a potential for 40 percent or more of new deposits to come from digital sales by 2018."
The authors go on to say that rather than recreating a traditional bank and its services in digital form, creating a new digital-only banking business may be able to meet the evolving set of customer expectations more quickly and effectively. The authors feel this type of bank would be particularly suited for fast-growing emerging markets where customer needs often go unmet by traditional offerings.
That article lists six (6) success factors to build digital-banking businesses:
