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Three Ways to Innovate Your Bank’s Digital Strategy

Published by Fintech Americas on Aug 9, 2023

Learn from the success stories of Bancolombia and Banorte and discover the latest trends in artificial intelligence, security, and customer experience.

In recent years, the banking landscape in Latin America has undergone a significant transformation due to the growing adoption of digital technology. With an increasingly connected and online user base, financial institutions across the region are immersed in a constant race to innovate and improve their digital channels.

There is a great deal at stake. Digital banking is a market worth more than $20 billion globally and is projected to grow at an annual rate of 20% through 2030. At the same time, the fact that cash is no longer the most widely used payment method in Latin America’s formal economy demonstrates how digitalization is outperforming traditional banking models across the region.

Some institutions, such as Bancolombia, have successfully understood this new reality, planned ahead, and adapted effectively. Thanks to this approach, the bank was named the financial institution with the highest digital maturity in the region according to a study by Google and Boston Consulting Group. A well-deserved recognition, considering it increased its digital sales from 19% to 43% between 2019 and 2022 and grew its mobile banking app users from 6.5 million in 2021 to 7.8 million in 2023.

To learn more about Bancolombia’s successful digital initiatives, click here.

There is still a long road ahead in digital banking. To help you move forward with confidence, below we analyze three strategies you should know to adapt your bank to the new digital paradigm, improve relevance and competitiveness, and deliver better customer experiences.

  1. Use Artificial Intelligence and Automation

Artificial Intelligence (AI) and automation are redefining the banking industry. According to McKinsey, 70% of financial institutions already use AI in some aspect of their operations.

AI-powered chatbots have proven to be a valuable tool for improving customer service and reducing operational costs. By providing quick and accurate answers to frequently asked questions, they allow human employees to focus on more complex interactions while improving customer satisfaction.

At the same time, internal process automation technologies — such as document processing and fraud detection — increase efficiency and accuracy in banking operations, both of which are essential for accelerating digital channel experiences.

A successful example in the region is the Mexican institution Banorte, which introduced Maya into its mobile banking platform. Maya is an Artificial Intelligence assistant capable of carrying out up to 17 monetary operations through conversations with users. In addition, it can answer more than 300 chat inquiries and perform transactions including transfers, tax payments, service and card payments, mobile token activation, and more.

  1. Security and Trust: The Foundation of the Digital Customer-Bank Relationship

Security and trust are fundamental in the digital world. A McKinsey report highlights that 74% of customers are willing to share personal information if they trust that their data is protected.

One of the best strategies banks can follow to expand their digital presence is investing in advanced security technologies such as multi-factor authentication, biometrics, and continuous cyber threat monitoring.

A regional example is Banco Industrial, which achieved exponential growth in digital channel adoption after implementing biometric technologies, growing from 91,000 app users in 2016 to nearly 551,000 in 2022.

It is equally important for financial institutions to effectively communicate the security measures they implement. Doing so is essential to building trust and protecting the institution’s reputation.

  1. Deliver a Frictionless Digital Customer Experience

Customer experience has become a determining factor when choosing a digital bank in Latin America. A Forrester report highlights that 70% of customers are willing to pay more for a better customer experience and, as a result, 82% of banking business leaders plan to increase their budgets dedicated to improving Customer Experience over the next twelve months — most likely with a strong focus on digital channels.

Banks must collect and analyze data to better understand customer needs and preferences. By offering personalized services and solving problems more efficiently, institutions can generate greater customer loyalty and satisfaction.

As a result, delivering an exceptional and frictionless Customer Experience has become a key differentiator within the banking industry across the region.

One way to improve Customer Experience and keep pace with evolving customer expectations is by incorporating initiatives based on emerging technologies into digital channels.

For example, Banco do Brasil announced the launch of BraBlox in 2022 — the bank’s first experience in the Roblox metaverse, one of the most popular gaming platforms today. BraBlox guides players through a map filled with puzzles that provide financial literacy guidance, helping solve real-life budgeting and planning challenges.

A Shortcut to Implementing the Digital Strategy of One of the Region’s Most Innovative Banks

As mentioned at the beginning of this article, Bancolombia is a leading institution in modernization and adaptation to emerging digital trends. In addition to continuously increasing sales through digital channels, the bank gained more than one million new app users in recent months.

Would you like to discover the formula behind their success and learn how to replicate it within your own institution? Join the next FATV Inside Access episode to find out.

On Thursday, August 17 at 11:00 AM EST, Juan Diego Agudelo Ordoñez, Digital Distribution Leader at Bancolombia, will discuss:

  • The strategy behind the growth of Bancolombia’s digital channels and what you can learn from it
  • How they revolutionized the user experience across their digital channels
  • Tips for redesigning your institution’s digital strategy using the latest cutting-edge technologies
  • Key insights for ensuring all areas of the bank actively participate in new digital strategies
  • And much more!

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