Beyond Banking on Demand: The Digital Demands of German Bank Customers

The German and European banking industry is quickly transitioning into a digital age. Based on the growing customer demand for on-demand financial management, traditional banking products and storefronts are making significant changes.

At the core of this digital evolution are developments like the emergence of the digital finance industry, the integration of innovative technologies such as blockchain and cryptocurrencies, as well as new regulations such as PSD2 and trends such as open banking.

The latter makes it clear that the understanding of customer proximity, once the most important capital of banking institutions, is also changing. Because fewer and fewer bank customers are looking for a branch. According to a 2017 Bitkom study, around one in four German internet users exclusively regulates their banking business online. And only 30% of those surveyed regard bankers as trustworthy.

Inevitably, German banking institutions have to think about how and why they use branches – especially in conjunction with digital channels – and how they can keep their customers more up-to-date across online and offline channels.

From an economic point of view, many of the 1,800 banking institutes in Germany are at a crossroads for the first time. This past year marked the first drop in volume of German retail banking due in part to low global interest rates. The immense costs of branch operations is becoming a serious burden.

Despite increased competitive pressure and new banking technologies, the needs of the end user remain paramount

In the wake of the banking evolution, it is unsurprising to see new, competing providers emerge. In the German market, many traditional banking products and services are now being offered by technology-driven companies such as fintechs and online banks. This not only simplifies ordinary banking actions like account opening, custody, transfers, and consultancy, but anchors them in their daily lives to be managed simply on their smartphone.

Mobile applications are increasingly becoming the backbone of most banking and financial services providers. That requires banks to provide the traditional array of services without neglecting aspects such as user experience, speed, security, or functionality.

Is the digital experience of your banking products consistent with the digital needs of your end users?

Expectations of banking products and services today are based on the ever-growing digital affinity of users. Millennials will make up the majority of the working population over the next decade. Over the past two decades, GAFA have radically changed the way we (millennials in particular) digitally communicate, make consumer decisions, and implement them (also in the form of cashless payments). The result is a user expectation towards brands which can best be summarized with the keywords: mobility, flexibility, self-determination, and independence.

With that said, it is vitally important that existing banking products and services are designed to meet the growing digital affinity of users at the right time, the right place, and through the right channel.

In our free white paper (German only), we discuss the new trends and experiences of fintechs with innovative products. With topics such as On Demand and Open Banking, Omnichannel and PSD2, we will introduce four digital user claims which will bring the next generation of banking customers to digital banking products and services. In addition, we propose concrete measures that will ultimately enhance the digital experience of your digital products for the end users.