There has been intense debate about how digital disruption is breaking the backbone of the financial industry. It might surprise you that traditional banks have already made their names among fintech startups and internet giants. Global financial services took root at a rate of 4%.

With the proliferation of digital technology and big data, the financial industry is expected to undergo significant changes. With emerging economic headwinds and changing customer expectations, banks and credit unions must identify potential problems and opportunities and develop thoughtful strategies to grow their brands.

 

This is a time of difficulty and opportunity for financial institutions, with multiple avenues for exponential expansion. In this context, we will examine several digital growth techniques banks can use to achieve their growth goals.

Why banks need to prioritize digital growth strategies

Digital development initiatives are critical to a bank's success as they help banks remain competitive and meet customers' changing needs. Here are some of the main reasons why banks should adopt a digital expansion strategy:

Meet changing customer expectations: Customers now demand an explosion of easily accessible, personalized services they can use while on the go. Banks can meet these expectations and deliver services that align with customer needs by applying digital growth strategies.

Competing in a crowded market: The financial industry is becoming increasingly crowded as fintech startups and internet giants expand. To remain competitive, banks must differentiate themselves and offer a different value proposition.

Increase productivity and reduce costs: A digital growth approach can help banks streamline processes, reduce manual work and save costs. This allows for the creation of funds for investment in innovation and development.

Build revenue: Banks can create new revenue streams and attract new consumers by offering new digital products and services. This enables them to use digital growth strategies to increase their market share.

Strengthen data analytics capabilities: Digital growth initiatives enable banks to collect and examine vast amounts of data about their customers, which can be used to inform business decisions and improve customer experience.

 

Fundamental digital growth strategies for Banks

Banks can employ various digital growth strategies to expand market share and generate significant revenue. Here are the best methods for digital growth that banks can follow:

Strategy 1: Don't focus on a single core

Gone are the days when banks used to focus on a single core business, and now banks are expanding their presence to benefit their customers better. As a result of this strategy, some banks choose to be neighbors, while others prefer to be unbanked neighbors.

The best examples of neighborhood banks are Ideabank and ING. These banks expanded their offerings to include accounting, factoring, cash flow analysis, accounts receivable management, and more. Postal Bank, on the other hand, is a thriving non-bank community. In addition to baking services, it has become a well-known mobile operator in Italy.

Tactic 2: Digital Attack

This strategy best suits banks looking to enter new markets without investing in physical infrastructure. Overall, it offers a cost-effective alternative to banks' digital evolution and involves using novel business models and digital channels.

The famous ING Bank is a perfect example of an original digital attacker. The success of this strategy can be seen from the fact that the bank started offering online services in 1996. In just ten years, she has gained more than 20 million clients from nine countries worldwide. Isn't it amazing?

Strategy 3: Monetize your data

Most banks have recognized this strategy. Banks can make money in several ways, using bank data to create new analytical reports or adding innovative analytical features using their internal data.

By monetizing data from both parties, they can create an end-to-end view of different transactions. Furthermore, banks can use the available data as a competitive advantage. This enables us to gain a competitive advantage by delivering better value to our customers.

Tactic 4: Increase Customer Loyalty

Identify the basic needs of most customers and become a service provider. Banks can capitalize on the value they leave behind by providing banking-related services. Advising clients on how much they should save for retirement and helping them analyze the maturity dates of financial-related instruments are ways to better engage with clients.

Final insights!

Digital transformation is essential for banks to remain competitive in the modern age. The strategies mentioned in this article are just a few digital growth techniques banks can use to improve customer experience, increase operational efficiency and achieve revenue growth. These are a starting point for banks looking to accelerate their digital transformation journey and stay ahead.