It’s already the last leg of the year and the COVID-19 pandemic still remains prevalent in many areas of the world. Aside from the effects and implications on physical and mental health, the global economy also took a hard hit as businesses either slowed down or closed permanently.
With the threat of continuous economic suffering looming over us, the practical thing to do is start looking for potential solutions. This is where Phygital comes in as a viable solution that will not only assist the economy, but also pave the path for the future of banking.
What is Phygital and how can it help the economy
In a nutshell, Phygital is the portmanteau of the “physical” and “digital.” The definition is also pretty straightforward. It describes a digital banking experience that does not sacrifice the humanized experiences that traditional banks offer and that customers crave.
Phygital does not require choosing between digital banking or brick-and-mortar banking. Instead, it meshes both together and draws out each one’s strength to provide smooth and seamless banking experiences to people and businesses everywhere.
So what exactly makes Phygital different from traditional banking? Here’s a quick checklist of its major highlights:
- The interaction with customers all happens digitally but across both physical and online channels. This includes the use of digital tools to enhance, not disrupt, communication barriers. For example, when it comes to applying for loans, some people might prefer to talk to a real person, not a chat bot.
- Operations are also dependent on a digital-first approach, meaning digital tools are used to remove the need for physical documents. Phygital also leverages algorithms, artificial intelligence, and other tools to increase both productivity and client relationships.
- While digital tools have been adopted by physical banks to improve transactions and processes, Phygital uses digital tools to improve customers’ banking experiences.
Essentially, in these tumultuous times, Phygital gives companies and businesses a shot at getting back in the game even during this crisis.
How is Phygital transforming businesses of today
Despite the still-existing presence of the COVID-19 pandemic, the economy is reopening in many states already. This is where Phygital can step in and help businesses recover even during these difficult times.
1.Phygital reduces costs while increasing customer value.
It’s basically a win-win scenario as businesses continue to invest in new tools that will improve their capacity. Phygital basically automates repetitive tasks like opening new accounts, withdrawals, and applications. This results in saving time and costs on a larger scale because of the decrease in manpower but increase in speed and quality of service.
Westbanc in Australia formulated its pension scheme in a way that it will allow customers to manage all of their accounts conveniently, whether it’s through the internet, their mobile phone, or in the physical bank. The BT Super for Life platform pulls in customer information and then takes care of the rest. This innovation itself reduced cost but provided more value for existing and new customers.
2. Phygital can help businesses expand and secure their markets.
While individuals in urban settings are already using Phygital, it’s not the same for those in rural areas. Phygital acts as a bridge that can help both parties. It can provide alternatives for individuals in rural areas so they too can experience efficient, transparent, and interactive banking processes. At the same time, expansion to other areas and markets means more business for financial institutions that are already invested in Phygital.
Hello Bank is a 100% mobile digital bank that was launched in a few European countries. As they continued to add more countries to serve and more tools to be used by customers, they were also able to increase their market share by being able to cater to more people. Hello Bank dives into omnichannel tools as its services are available on dedicated apps, video calls, online chat, or through voice calls.
3. Phygital can gain valuable insights on their customers.
With the presence of technology-based tools like artificial intelligence, big data, and machine learning, it’s easier for Phygital firms to access valuable insights on customer data. As a result, it is easier to adjust offerings, processes, or services to fit into the customers’ preferences. This is where FinTech really excels in—leveraging data to propel customer experience.
Here’s a quick example of a bank that focuses on customer experience. Umpqua Bank in San Francisco prioritizes customer connections. Their physical branches have unique features not mostly found at traditional banks, like big screens with information, public access to tablets, demonstrations of products, etc. To put it simply, they are utilizing these innovations to further meet the needs of their customers.
So listen to the data, check the numbers, and study the patterns—these will all lead you to the steps you have to take to make your customers’ lives easier.
Changing times as opportunities
Even as the economy eventually moves forward post-COVID, there will always be challenges that require businesses to step up or be left out. Success will always be multi-factorial, not just solely dependent on efficiency or relationships with customers. And as early as now, FinTech, specifically Phygital, is making its mark as a dependable tool for business continuity and sustainability.