One sector that has witnessed drastic transformation is undoubted- the banking sector. And the key catalyst in the role is technology. Digital transformation has pushed the banking sector to a whole new next level; digitalization is here to stay but the need for physical branches will continue to be relevant for consumers. There are certain scenarios where users prefer going to banks physically. So, considering the changing behavior of new-age customers banks should offer digital as well as physical services to its customer to deliver an exceptional customer experience. One such approach banks can adopt for maximizing the benefits of physical branch and digital abilities is in the shape of Phygital Banking.
Let’s dig deeper to know more about the new way of banking- Phygital
The word Phygital is coined by combining the two words i.e. Physical and Digital. Simply put, Phygital banking is a type of banking where physical branches reap the advantage of digitalization across various channels. In this disruptive model, both humans and technology are employed to serve the customers.
The retail sector has embraced the Phygital ecosystem i.e. At Amazon Go supermarket, customers go physically to check products and make payments via smartphone.
As the pandemic has standstill our life but after vaccination life is coming back to normalcy. Due to the global pandemic, people choose the digital landscape for the transaction and it has led to a surge in usage of digital banking. Covid-19 has accelerated the Phygital experience for customers. And their expectations are changing quickly as they want seamless and unmatched Phygital banking.
With that being said even the new age customers are also reluctant to put their hard-earned money on a completely digital bank with no physical branches. So, the bank should equip themselves to offer digital customers some real-time solutions for their issues.
According to Fintech Magazine, a Barclays report quoted that 46% of Gen Z customers surveyed said they would visit the physical branch to explore more products or services before investing or making a purchase. These data suggest that for a customer both physical and digital elements are imperative. In the physical environment, they can discuss the products and services and later digitally they can purchase them.
Additionally, the banking system with digital capabilities such as biometrics, APIs, machine learning, and other business aspects can abet a bank to transform its physical difficulties into Phygital chance. Not to mention, with the Phygital approach a bank not only gains a competitive edge over brick-and-mortar banks but also against digital competitors.
The new-age customer wants a quick and instant process, no matter if it’s digital or physical. Furthermore, Phygital banking examples proffers such feasible solutions to them. They can easily choose the option to engage with the banks to avail services such as voice calls with digital bankers or using digital services to solve their queries.
Banks have those customers also who aren’t able to use digitalization so for them Phygital banking has the solution. They can visit the physical branch to get the queries solved; the bank can educate them on digital facilities also. This way it leads to higher customer satisfaction.
Another astounding advantage of Phygital banking is it abets in reducing overhead costs and amplifies customer value. Moreover, numerous repetitive tasks including both backend and frontend have been automated by the Phygital banking approach. Besides this, the time required for processing documents or issuing cards, and opening a bank account has been reduced by this mode of banking.
People in rural areas are still reluctant for digital banking; the reason could be a lack of authentic and correct knowledge. However, the best-fitted solution in this scenario is Phygital banking. To add, globally open banking regulation is being discussed for banks to be more secure, reliable, and most importantly transparent. With Phygital banking, the banking space is connected with a wider audience, helping the banks connect with the right prospective customer giving them the right banking products.
Phygital banking offers a solution to the customer at both the physical as well as digital levels. This facility abets in strengthening the relationship with the customers. Bank branches create a sense of trust among the customers whereas digital services offer a fast resolution to their queries, this enhances customer experience.
The advantages of Phygital banking are strong and cogent. It could be the most accepted and secure mode of banking for customers of every generation. Banks are required to leverage the trust of the physical branch and the power of digital transformation. Any bank that mingles both the services in the correct manner could create future-ready banks along with saving costs, the scale at a fast pace, integrate a customer-centric approach, and competitive edge.
To put it simply: the concept of Phygital banking is capable of furnishing a plethora of benefits to its congregating users including enhancing customer experiences, bestowing customer satisfaction, access to a wider market, improving the customer-bank relationship and so on. This is why; the modality is often considered the future of banking and is likely to dominate the contemporary market.
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