Summary:

• Hybrid banking is a necessity birthed from pandemic restrictions and changing customer bases.
• “Neo-banking” should ideally combine physical and virtual touch points for optimal audience consolidation.
• A customer-centric approach can be facilitated by omnichannel customer engagement.

Hybrid banking, i.e., the integration of digital banking touch points with physical branches, has been gaining popularity since the peak of the COVID-19 pandemic in 2020. This approach has accelerated the adoption of many newer mobile initiatives, including:

• Omnichannel banking
• Voice recognition 
• Video interactions

This multifaceted approach caters to diverse customer personas, ranging from the traditionalists to the tech-savvy. Despite the positive impact this approach has had on growth, banks still need a reliable strategy for effective execution.

In this blog, we explore the emergence of a hybrid banking approach, why hybrid banking is here to stay, along with projections as to how financial institutions can kick-start this journey.

Setting the context

Digitization has simplified workflows for many industries, and the banking and finance industry is no exception to this. Banking customers required streamlined options to make their day-to-day transactions and other banking requirements as seamless as possible. 

Therefore, banks felt the need to streamline processes such as: 

• Customer sign-ups 
• Onboarding procedures 
• Daily transactions 
• Loan applications
• KYC compliance

Furthermore, the year 2020 saw the rise of “neo-banking''. As many countries became accustomed to end-to-end digital services, neo-banking offered customers the flexibility of accessing a range of baking products from the comfort of their homes, while banks benefited from lower costs of operation. By 2030, all banks are expected to use technology to activate insights from customer data to enrich customer journeys.

The challenge and solution

Digitization has provided many benefits including better quality of the products and services at a lower cost. However, in some countries like India, adapting to “neo-banking” is challenging owing to a plethora of demographic factors. 

• A large segment of the population consists of senior citizens, who might not be digitally savvy and need more guidance for onboarding. 
• In contrast, tech-savvy millennials would prefer a comprehensive banking solution that combines all services in one location. 

With this prevalent dynamic, customer requirements become more complex, and banks must incorporate both offline and online services in their repertoires and strike the right balance for their diverse customers.

To that end, banks are identifying more opportunities to increase cost savings, flexibility, security, and customer retention. For instance, banks have sought to synchronize online and offline channels by integrating customer data across relevant channels, enabling more seamless, real-time banking experiences. The result? Greater customer affinity and higher top-line growth.

Getting started

Hybrid banking will continue spelling growth for businesses, and financial institutions must buckle up for an omnichannel approach to capture more value. To execute omnichannel engagement effectively, banks need to acquire a 360-degree customer view that enables real-time assessment of customer journeys. 

Banks will thus be able to gain deep insights into customers’ behavioral patterns, preferences, and pain points, all of which lay the foundation for personalized customer engagement, increased brand loyalty, and top-line growth.