User-centered innovation the new route to follow for Costa Rican banks

Melissa López
December 6, 2020

The pandemic was the main cause that forced to accelerate the digitization of some banking processes in Latin America, towards a more agile, flawless and digital model.

If something is going to reveal the digital transformation, it is who are the leaders capable of promoting something that already exists, but in a different way before their consumers.

The habits of a bank's clients have changed: they no longer want to be passive actors in their finances, on the contrary, they seek to be proactive, having the power of decision in their hand.

Their experience of tedious, complex and not very transparent interactions have made them look for alternatives to traditional banking, a space that FinTech took advantage of to stand out in the market.

"Not only have they had to adjust to allow what was previously unthinkable, but there is pressure between regulators, or a kind of ' transformation competition ' " , says the Director of Digital Transformation and Business Strategy Bac & Asociados, Fernán Gallegos.

Under this scenario, banks will have to take advantage of the business opportunities offered by the new digital era , placing the customer as the center of their strategy, entering into a FinTech logic focused on the experience of a sophisticated, volatile and demanding customer who wants solutions. fast and flexible.

"The advantage of Fintech companies, from the beginning, was to be able to provide financial services in a more agile, digital, less expensive way and with a generally more memorable experience," Gallegos said.

Greater challenges

However, one of the biggest challenges for banks is to develop a platform robust enough to allow users to acquire all the services offered on their physical platform in a virtual way.

Process reengineering: because it will be useless to increase the use of technologies if your processes are not agile enough to adapt to digital transformation.

However, when we refer to this we are not referring to a before and after, but rather to a sustained change focused on the client and its timely solutions. We are at a time in history where the user has greater decision-making capacity, more information and possibilities to choose .

The bank must seek new models, new services, new physical-digital connection platforms, taking advantage of technology to save costs, streamline processes, provide security by delivering value to the customer.

Better decisions based on data : Technologies such as Big Data allow banks to base their decisions on the data available to their customers. "As the FinTechs maturity process evolved, they realized that they suffer from something that traditional banks have and that is even more valuable: DATA, " Gallegos emphasized.

This allows them to have information about what their customers buy, where they travel, their tastes, which they can take advantage of to make personalized predictions and recommendations for each user.

Making data a profitable, clear, transparent and non-invasive business is the future for banking by improving decision making through the intelligent use of data.

Cybersecurity: many traditional financial institutions have not been able to provide an efficient response to users who have experienced vulnerability to the security of their accounts, leading to scams and financial damage. As if that were not enough, the response of the entities to resolve these disputes is not necessarily quick and satisfactory for customers.

To change this they will need a strategic perspective , adequate resources, and an integrated operating model to manage operational risk effectively.

In addition, they must reduce dependence on physical offices , which will translate into cost reduction, allowing them to offer a lower cost per transaction to their customers in their mobile applications.

"A highly regulated system is difficult to adapt as easily as one would like, however, COVID has accelerated the need to adopt new ways of operating financial services and regulators are no exception," concluded Gallegos.