Enhancing Bank Service Popularity Through Digital Innovation: Strategies for Customer-Centric Technology Integration

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International Journal of Management Science and Business Administration

Volume 9, Issue 6, September 2023, Pages 7-12

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Enhancing Bank Service Popularity Through Digital Innovation: Strategies for Customer-Centric Technology Integration

DOI: 10.18775/ijmsba.1849-5664-5419.2014.96.1001  
URL: https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.96.1001 

Ruzyieva Olima Shukhratovna ¹, Ruziyev Shukhrat Narmuradovich ²

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¹ “Uzmilliybank” JSC Head Office “Department of Network and Service Development, Bank.”, Uzbekistan
² Samarkand State University of Veterinary Medicine, Animal Husbandry and Biotechnology, Uzbekistan

Abstract: The paper explores the possible strategies to increase the use of digital tools in modern banking. The conceptual study proposes four strategies banks should focus on to be competitive and satisfy diverse customer needs. The primary focus is enhancing the customer experience through digital tools, such as online payments, credit requests, and bill payments while acknowledging the security and technical limitations with which users may have issues—the strategies banks can utilize have a customer-centric approach that includes user-friendly design and personalization. The technology focus would encompass technological advancements with security features like encryption and biometric verification and integration with broader services. Financial product innovation and effective marketing strategies are also essential for increasing the use of digital banking tools. Blockchain and AI, integrated marketing, and customer relationship management should be significant points of emphasis for the banks to serve the business and consumer markets effectively. 

Keywords: Digital Banking Innovation, Customer-Centric Technology, Banking Services, Financial Product Innovation, Marketing in banking

1. Introduction

Banking is one of the critical financial services provided to the general public and businesses (Vijayaragavan, 2014; Davies, 2010). As such, it is highly challenging for banks to offer specific services that allow them to be competitive in the market, and there is a continuous need to innovate so that customers receive a satisfactory level of service (Al Eisaw et al., 2012). Due to the specific needs of each target market, there often needs to be more consistency in the services offered to maximize the fulfillment of customers’ total needs (Kuhl et al., 2019). In recent decades, digital tools have been developed, and banks are heavily relying on them to enhance the customer experience and provide a higher level of quality in their services (Mbama et al., 2018). Such digital tools allow customers to perform payments online, request credit, quickly pay their bills, and possibly invest (Wenzel-Ruelberg et al., 2020; Sharmila, S. 2019). The convenience provided by such digital tools often saves time and is an excellent alternative to visiting a bank (Sharmila et al., 2019).

However, there are many challenges when using digital tools and apps because there may be issues with the software, specific glitches, and various reasons such as server issues or server maintenance (Wisniewski ET AL., 2020). Existing studies show that simplicity in using software or an app in the banking context leads to increased use of the tool for some operations (Pallathadka et al., 2022). This article provides background and review of concepts that increase the digital tool’s popularity in the banking environment. This means increasing the tool’s use and the ability to attract more customers and retain them. As a part of this paper, the concepts are first reviewed, the possibilities for the development of tools and the evolution of tools in the future are discussed, and specific propositions are derived.

2. Overview of Literature and Strategies

In this section, we review various strategies that banks can use to increase the popularity of their services by using digital tools. We will explore these strategies from four main points of view. One is the user perspective, where the customer is central to our aims and goals to increase popularity. This is a customer-centric approach. For instance, when designing platforms to interact with specific services, the user should always be at the center, so user-friendly digital tools such as mobile or web applications need to be developed with the customer in mind. A friendly interface that is easy to use and simple to access is essential. Also, a banking experience that is personalized by using data and best customer preferences is an excellent way to develop a better relationship with the customer and build loyalty.

Another aspect and strategy, in addition to the customer-centric one, is focusing on the technology itself. Here, features such as security measures are extremely important. Impenetrable apps secured with two-factor authentication or encryption build trust from the consumer towards the digital tool and may dispel the fear of personal information being taken or misused. In past studies, encryption and biometric verification have been linked to a specific increase in trust and not easy access for hackers. From a technology perspective, we can also observe how well this digital tool is linked to other bank vices or channels of other infrastructures. For instance, with a specific bank token, you can access your profile in some countries, such as Croatia or the EU, where you have all the services related to healthcare, administration, and police issuing of new documents. So, with the simple bank token provided by your app, you can enter and use all of these services, which is another advantage that certain banks may offer and some do not. It is not only the provider’s prerogative to connect those services, but the bank itself should find a way to integrate its system with these more comprehensive systems.

Figure 1: Strategies for Enhancing Bank Service Popularity

The third strategy is related to the entire system’s financial side; we have to consider the quality of the bank’s products and services, which may offer specific blockchains for secure transactions or advisors like virtual advisors or robo-advisors and chatbots to solve issues. Also, applying for credit digitally and doing everything through an app without visiting a store is valuable. Having a fully digitalized service conclusion process is something that is very valuable. Finally, the fourth strategy is the marketing part. More is needed because the digital tool exists, is fully operational, user-friendly, and secure, and the products are high quality. To build up your audience, these tools must be promoted through digital marketing strategies, newsletters, social media, specific promotions, and app notifications. Then, through quality and extensive and purposeful marketing communication, you can keep your customers, build loyalty, and recruit new ones. Customer relationship and feedback are also essential aspects of marketing strategies. Timely and high-quality customer support from the side of the app itself can enhance the user and customer’s experience. The customers can then provide this feedback to improve the app or the digital tool, addressing all the issues.

3. Strategies to Enhance Popularity of Banking Digital Tools

3.1 User-centric Design

Regarding user-centric strategy, banks must consider numerous key aspects, always with the customer at the center. They must understand customer behavior and how customers interact with their interface (Kader, A., 2019). The first point of contact, or the ‘first touch moment,’ is crucial. This stage requires development by a team that combines designers’ skills with marketing expertise, and the marketing team should ideally have an understanding of the users, preferably based on existing data. The second part of the user-centric strategy relates to personalization. Banks can use existing data on customers to send them tailored messages. This approach guides customer behavior and addresses their needs more effectively. For example, addressing specific housing issues that couples or individuals of a certain age may face, providing information on how to access credit and financing, or offering investment advice to high-income professionals and those investing in retirement funds (Habila, M. 2015). While it is challenging to implement personalization through a single interface, it can be achieved by simplifying interfaces and using various templates for different user segments (Rossi et al.; R., 2001). This approach is essential for older users who may be less inclined to use digital tools. A user-friendly, easy-to-manage interface that requires minimal technical knowledge can make these apps accessible to a broader audience. Each user segment requires a specific approach to enhance the overall usage of these apps.

3.2 Technology Focus

The Technology Focus strategy is a crucial aspect and a prerequisite for ensuring everything functions effectively. Technical solutions must be implemented for the product to be delivered correctly (Tomiči et al., 2020). These solutions extend beyond the specific features of an app or digital tool; they aim to improve not just usability but also the security of the entire system (Laukkanen et al., 2017). For instance, we can utilize biometric and fingerprint access and even implement SMS two-factor authentication. These measures significantly enhance the security level of the app. Security is a significant concern for users of digital tools. Trust is built when banks effectively communicate specific safety measures, making customers feel more secure (Kaabachi et al., 2017). This relationship between security and trust has been demonstrated in previous studies (Yu, Y. et al., 2023; Flavián et al., 2006; P.Riquelme et al., 2014). With the advent of AI technology, this system is likely to undergo significant changes (An et al., 2023; Gu et al.; W., 2023). The future could include AI assistants, voice-activated to handle various user issues. Banks’ technical integration of services beyond traditional financial resolutions is another beneficial aspect of digital tools (Faulks B. et al., 2021; Pazarbasioglu et al., 2020). For example, e-citizen programs allow users to connect to various civil services using bank cards (Tomiči et al., 2020). These services can include anything from issuing IDs to applying for different services, potentially extending to healthcare and other administrative functions. This can all be achieved using biometric authentication or a secure password provided by the bank, linking the user’s bank account to these services.

3.3 Financial Product Innovation

The strategy focuses on financial aspects, putting product innovation at the center. Here, blockchain-based transactions are a vital aspect where blockchain can further secure and enhance the system’s overall ability (Bodkhe et al., 2020). Talking in more detail, financial innovations include digital credit applications. In this context, we can collaborate with fintech companies to produce highly relevant products for each segment. These products need to be of high quality and marketed correctly to people. Furthermore, seamless integration of these digital tools into consumers’ daily lives is paramount (Ashiru et al., 2023). User-friendly interfaces, intuitive design, and robust customer support are crucial elements that contribute to a positive user experience (Shen et al., 2023). Investing in cutting-edge technologies such as artificial intelligence and machine learning can enhance the functionality of digital tools, providing personalized recommendations and predictive insights (Ashiru et al., 2023). Henceforth, enhancing the popularity of banking digital tools requires a multifaceted approach involving product innovation, technological advancements, and robust educational efforts (Shen et al., 2023). By implementing these strategies, financial institutions can position themselves at the forefront of the digital banking revolution, meeting the evolving demands of tech-savvy consumers.

3.4 Marketing and Customer Relationship

The marketing aspect of the whole thing is that banks need to promote themselves effectively on social media and leverage this media, not only traditional but also guerrilla media, to appeal to younger generations with specific needs (Quesenberry et al., 2020). They should also utilize platforms for communication and personalized app notifications, which are vital message distribution channels. The system must be integrated; a user-centric approach is necessary for effective marketing and customer relationship management. Data is critical to feeding correct marketing messages and adjusting communication to different segments (Batra and Keller, 2016). Customer feedback mechanisms allow customers to improve their services through open innovation. Moreover, implementing customer loyalty programs can incentive ongoing engagement, rewarding customers for their loyalty and encouraging using multiple banking services (Quesenberry et al., 2020). Educational initiatives, such as webinars and informative content, contribute to financial literacy, empowering customers and establishing the bank as a trusted advisor (Lee et al., 2019). Actively searching customer response and reviews provides valuable insights, enabling banks to refine their services based on customer preferences. Ultimately, the convergence of personalized marketing, digital innovation and community engagement forms a holistic approach to enhancing marketing and customer relationships in the banking industry.

4. Discussion and Conclusion

In conclusion, this research delves into “Enhancing Bank Service Popularity Through Digital Innovation: Strategies for Customer-Centric Technology Integration,” shedding light on critical insights that pave the way for transformative advancements within the banking sector. The findings underscore the profound impact of digital innovation on elevating the popularity of bank services, particularly when intricately woven into a fabric of customer-centric technology integration. The exploration of digital innovations, ranging from advanced mobile banking applications to personalized customer interfaces, reveals a tangible correlation between the adoption of cutting-edge technologies and the heightened appeal of bank services. The strategies employed in this integration, rooted in a customer-centric ethos, are instrumental in meeting and exceeding customer expectations.

The emphasis on understanding and responding to customer needs fosters an environment where technology becomes a seamless enabler rather than a distant disruptor. This research underscores a pervasive deficiency in financial education and awareness at a broad scale. Addressing this issue necessitates a comprehensive approach encompassing tailored strategies, tactful maneuvers, and precise operations. The complexity of this multifaceted process is paramount, as it involves a systematic breakdown into smaller, more manageable components to effectively influence the desired outcome—namely, an augmented level of popularity. Subsequent empirical investigations could further delve into the conceptualization and measurement of diverse strategies implemented by companies, aiming to discern their distinct impact on attitudes and behavioral patterns within finance. To increase this, we need a multipart process involving specific strategies, tactics, and operations that can be broken down into smaller parts to impact the desired outcome, increasing popularity.

Strategy	Aspects	Challenges	Solutions
User-Centric Design	Customer behavior understanding, interface interaction, personalization.	Designing user-friendly interfaces, addressing diverse customer needs.	Development by teams with design and marketing expertise, use of customer data for personalization.
Technology Focus	Security features (encryption, biometric verification), integration with other services.	Building trust, ensuring secure and impenetrable apps.	Implementation of two-factor authentication, regular software updates, use of AI technology.
Financial Product Innovation	Blockchain for secure transactions, digital credit applications.	Keeping up with technological advancements, meeting diverse financial needs.	Collaboration with fintech companies, development of innovative products using AI.
Marketing and Customer Relationship	Digital marketing, social media use, customer feedback mechanisms.	Effectively promoting digital tools, maintaining customer loyalty.	Personalized app notifications, integrated marketing strategies, leveraging customer feedback for improvement.

User-centric design is a holistic approach that involves understanding customer behavior, fostering seamless interface interactions, and tailoring experiences through personalization. At its core, it involves the meticulous process of crafting user-friendly interfaces that go beyond aesthetic appeal to address customers’ diverse and dynamic needs. This methodology hinges on the collaborative efforts of multidisciplinary teams equipped with a blend of design and marketing expertise. By amalgamating these skill sets, User-Centric Design ensures visually appealing interfaces and strategically aligns them with market demands.

In the realm of technology focus, a paramount emphasis is placed on incorporating robust security features to fortify digital landscapes. This includes the integration of advanced encryption protocols and biometric verification methods, creating a multifaceted defense against potential threats. The primary objective is to build and instill trust among users by ensuring the development of secure and impenetrable applications. Added more: To remain competitive, financial institutions are adopting cutting-edge technologies and fostering collaboration with fintech companies. This collaboration catalyzes the development of innovative financial products, often leveraging artificial intelligence (AI) for enhanced efficiency, risk assessment, and personalized services. By harnessing the power of AI, financial institutions can analyze vast amounts of data to tailor products that align with individual customer profiles, thereby creating a more dynamic and responsive financial ecosystem.

Finally, Effectively promoting digital tools is not merely about showcasing their features but also about cultivating an environment that encourages customer adoption and loyalty. This involves highlighting the functional benefits and emphasizing the experiential aspects that resonate with the target audience. A key driver in this process is the deployment of personalized app notifications, delivering tailored messages that cater to individual user preferences and behaviors. The effective promotion of digital tools, coupled with strategies for customer loyalty and the insightful incorporation of personalized notifications and feedback loops, shapes a dynamic and responsive ecosystem that attracts and retains a satisfied and engaged customer base.

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