Digitization and opportunities for banks


Author: Jan Tissler

The increasing trend toward digital offers and services opens the door to new opportunities, especially for traditional banks, as we'd like to demonstrate in this article. To do so, banks need to understand changing customer expectations and not least, reinvent the role of their branches.

Digitization is an important lever in order for financial institutions to remain in good shape in the coming years. An indication of this are the results of an analysis by the strategy and management consultancy zeb. They analyzed the 50 largest banks in Europe for the sixth time in a row. And it turns out that banks that digitized their business models at an early stage are in a much better position than their competitors. For example, these banks had a net profitability of 9.2%. A summary states that these “digital pioneers” not only substantially surpass the average of the largest credit institutions in Europe, but also exceed the requirements of the capital market.

At the same time, the authors of the study also predict further intensified competition for European banks. The reasons: new providers from the fin and big tech segment as well as increasing acceptance of “new, non-bank specific products and services”. Pure cost reductions are not the answer, explains Dr. Dirk Holländer, Senior Partner at zeb. Significant increases in earnings would also be required.

And this is where the opportunities of digitization come into play.

Six types of customers

In order to be digitally successful, new customer expectations must be taken into account. However, these are anything but homogeneous. A current study has identified six types of customers that financial institutions need to adapt for:

  1. «Digital financial experts» make up 21 percent of the clientele and are the largest group. They see themselves as knowledgeable and are very open to new digital technologies.
  2. «Timid onliners» are in second place with 20 percent. They do not reject new digital tools, but are still rather hesitant.
  3. «Carefree consumers» are represented at 18 percent. They are open to loans, but otherwise tend to be poorly informed and insecure.
  4. «Traditional financial experts» account for 17 percent. They know their way around but tend not to try anything new and are also skeptical about digital offers.
  5. «Suspicious offliners» make up 15 percent of customers. They have the lowest trust in banks and are not particularly interested in the digital.
  6. «Digital enthusiasts» represent only 9 percent. They are particularly intensive onliners and financially confident. Although a small group, they have an above-average income and a greater willingness to take risks.

As these six customer types show, it is not just a matter of offering digital-virtual services. Nonetheless, these already play an important role today and are destined to grow rather than decline in the future. The question is how to reach all of these customer groups.

Bank branches in the digital

This is where bank branches come into play, as their role will continue to be of fundamental importance. According to experts, however, in some cases they need to change significantly, while more generally speaking they need to develop a new role.

Some services will continue to migrate to apps and online – for purely economic reasons: An over-the-counter or phone transaction, for example, is significantly more expensive than a transfer via smartphone. To redirect customers accordingly, suitable, easy-to-use offers will be required. Only then will the "timid onliners" and "suspicious offliners" be intersected.

In addition to cost savings, there is another reason to promote digital services: Customers can be addressed more specifically. According to a worldwide study by Bain & Partner in 2018, almost half of all respondents did not buy bank products from their bank, but from a competitor. This often happened online and is a trend that will continue.

Dr. Nikola Glusac from Bain & Partner in Berlin recommends modernizing at least the most important bank branches. According to him, they need to have five specific zones:

  • self-service machines
  • an “information zone” to introduce customers to digital offers and services meeting tables for personal financial advice
  • meeting tables for personal financial advice
  • a “partner zone” in which local companies can present themselves
  • a discrete area for more complex transactions

This needs to be accompanied by a general re-learning process among employees. “In the future, bankers will no longer be specialists on one topic alone. They will be coaches who can explain all offers comprehensively, be it at the location itself or via video chat", he writes.


The number of bank branches has steadily decreased in recent years. But this also shows how they can be a tool to be exploited to the advantage of institutes, especially in times of stronger digitalization. They are also a great opportunity to reach those customers who are otherwise somewhat skeptical about new digital providers.

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