Skip to content Skip to sidebar Skip to footer

Here’s How You Can Capitalize on the Servitization Trend Today

Digital transformation across industries is largely driven by consumer demand and in an always-connected world, customers have grown to expect digital support and streamlined services from every business they encounter. This makes it necessary for less tech-savvy companies to embrace digital solutions that would cater to their customers’ needs.

In response to these evolving demands, conservative business industries, such as financial institutions, have begun integrating digital capabilities into their services. Many traditional banks have invested in comprehensive digital banking software solutions to modernize their operations. However, beyond offering digital capabilities, banks are obliged to provide customer-centric services that are digitally driven to enhance personalized experiences for customers. This is essentially how servitization works—by providing an ecosystem of connected services that differentiates a bank from its competitors in the market.

As the world grows more connected in the digital age, servitization has become an increasing trend among businesses. This practice involves delivering different service components to drive value for a company’s existing products and services. Banks can only achieve this if they fully embrace digital transformation and use tools that enable them to provide better services. Read on to learn more about how banks can leverage today’s growing servitization trend.

Shift to Open Banking for Flexible and Secure Transactions

In order to provide full servitization, financial institutions should be able to offer flexible banking services to their clients. Many customers use different bank platforms and internet-only financial apps to send payments and transfer funds. These customers also want the convenience of being able to use different digital financial apps without having to worry about whether their data is safe. To address this growing need, many financial institutions are now shifting to open banking. 

Open banking is an industry practice that allows third-party financial service providers, such as Financial Technology (FinTech) companies, free access to customer data. This is made possible through the use of Application Programming Interfaces (API), vital tools that allow different software to interact and engage with one another. API development encourages the use of open industry-approved applications that banks can use to enhance their services. As an example, APIs can enable banks to provide real-time money transfers for their clients.

With open banking, customers are not only free to use their data to apply for any available third-party financial service. This also opens a secure network of accounts for banks, customers, and third-party providers.   

Use of AI Technology to Deliver Smart Banking Experiences

Another way banks can increase servitization is by improving customer experience. This can be done by using artificial intelligence (AI) technology with machine learning capabilities to interact with customers. In fact, large banks have already started using AI chatbots that mirror human communication.

AI-enabled chatbots can answer customer inquiries and process requests. Many banks are now using these for lead generation to encourage customers to sign up for services. AI chatbots also automate multiple requests simultaneously, which frees up more time for bank employees to do other important tasks. This helps improve the overall customer experience while boosting operational efficiency.

However, while AI technology is helpful in helping customers, it does not completely replace personal interactions. Some customers still prefer face-to-face engagement or live chats with financial representatives when it comes to discussing specific banking issues. Thus, banks should sustain these communications channels with clients, even with increased digitalization.

Use Data to Develop Customized Financing Options for Customers

Banks are in a good position to use AI technology to analyze customer data. By using AI and machine learning to generate insights, banks can glean valuable information to understand what their customers truly need. This data lake can also be used to create customized loan products for a wide range of customer profiles. As a result, clients will be happier when they receive customized products that truly put their needs first.

Providing Bank Access Through Internet of Things (IoT)

The Internet of Things (IoT) pertains to a network of connected objects outfitted with software and sensors that allow them to exchange data. Examples of these objects are mobile phones, tablets, and smartwatches that can exchange data via Wi-Fi internet or Bluetooth connectivity. Using these, many people can access their banking apps virtually anywhere they go.

Banks have started tapping into IoT technology to provide more convenient services to customers. Because IoT technology allows direct communications between devices, this enables banks to provide convenient cashless automated payments for customers. Instead of using cash or a credit card, customers can scan their smartwatch at a store counter to purchase items. Customers can even use their mobile phone to check for the nearest ATM machine to their bank and schedule a cash withdrawal.

Another advantage of IoT technology is real-time data gathering. As long as customers have a device and use their app, banks can track customer activities and trends. This is another way to gain insight into consumer behaviors, allowing banks to tailor their services as needed. These are just several examples of how banks can capitalize on the servitization trend to provide more streamlined digital services for their clients. In a world where everything is always connected, customers expect banking services to provide different options for their needs. All of this results in an enhanced customer experience and greater trust from their clients.

This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now