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Digital Banking

Why Optionality Is Key to Digital Banking

Eric Evans
Apr 24, 2024

In the rapidly evolving landscape of the financial services, digital banking has reshaped the way individuals and businesses manage their finances. One of the key elements driving the success of digital banking services is the idea of optionality and making it easy to find banking features or products.

This flexibility plays a pivotal role in ensuring the continued relevance and competitiveness of digital banking platforms. Most accountholders don’t know to ask, so unless features jump out at them, they won’t know to enroll or use them.

Every day, normal humans buy when optionality and convenience create the opportunity. We see it, we click on it, we buy it, and then we use it. Grocery stores count on impulse buys, scattering their most popular products through the store. A store with a fresh layout forces you to scan the shelves more thoroughly – making it more likely that a new product or item will catch your eye. This strategy helps grocery stores achieve their goal of increasing the number of items included in each transaction. A fresh digital layout with plenty of optionality has the same effect.

As a kid, my parents would take my sister and I on our semi-usual trip to our local discount store. Think Blue Light Special. It was a place full of optionality at a great price. My sister and I would float around from special deal to special deal. Invariably, we would end up at the food court/café where we would buy something with whatever extra money my mother was able to scrounge up to get us out of her hair.

At some point, we would run into the machine that took your blood pressure (no purchase necessary). Not that I needed my blood pressure taken, but I did so every time. Probably not something I would have sought out without it being right there, but it was always present to give my arm a hug.

Looking back, the idea of going to that store should have been highly unappealing, but I sure don’t remember fighting it. Food café blood pressure machine: 1. Spending time with my friends outside: 0.

Availability and optionality won out.

The point is that most digital banking users don’t need a ton of complexity. They want simple, easy to use, relevant digital providers that offer multiple options when they need them most. The balance of embedding too many fintech providers and creating relevant optionality is something that needs to be well thought out.

Understanding Optionality in Digital Banking

Optionality in the context of digital banking refers to the diverse range of choices and features available to users. This includes various financial products, services, and interfaces that cater to the unique needs and preferences of a diverse user base. The importance of optionality becomes apparent when considering the dynamic nature of the financial landscape, where customer expectations, technological advancements, and regulatory changes constantly shape the industry.

Key Aspects of Optionality

  1. Digital banking platforms must offer a broad spectrum of financial products, including savings accounts, loans, investment options, and insurance.
  2. A one-size-fits-all approach no longer suffices in the digital age. Optionality extends to user interfaces, allowing accountholders to personalize their banking experience.
  3. Digital banks should embrace the optionality of integrating with third-party financial services and fintech solutions. Open banking frameworks enable collaboration with external providers, offering users a broader array of tools and services. This approach not only enriches the accountholder experience but also fosters innovation within the industry.
  4. The ability to make payments in various ways, such as peer-to-peer transfers, contactless payments, and cryptocurrency transactions, is integral to the concept of optionality in digital banking. Providing users with diverse payment options ensures that they can choose the methods that align with their preferences and the evolving trends in the payments landscape.

Benefits of Optionality in Digital Banking

  1. A diverse range of options enhances accountholder satisfaction by providing tailored solutions. This, in turn, leads to increased accountholder retention as users find value in the flexibility and customization offered by digital banking platforms.
  2. The financial industry is dynamic, with new technologies and trends emerging regularly. Digital banks equipped with optionality can quickly adapt to these changes, ensuring that they remain relevant and competitive in the market.
  3. Optionality serves as a key differentiator in a crowded digital banking landscape. Financial institutions that offer a wide range of choices and customization options stand out among their competitors, attracting a more diverse user base.
  4. Optionality fosters innovation by encouraging digital banks to stay ahead of the curve. By integrating with emerging technologies and collaborating with fintech innovators, these platforms can future-proof their services and maintain a leadership position in the market.

Why Optionality Matters Going Forward

In the realm of digital banking, optionality is not just a feature. It’s a fundamental aspect that underpins the success and sustainability of modern financial institutions. Providing accountholders with a diverse range of choices, customization options, and the flexibility to adapt to changing trends ensures that digital banking remains a dynamic and indispensable force in the future of finance. As the financial landscape continues to evolve, the ability of digital banks to embrace and enhance optionality will be instrumental in shaping the industry’s trajectory.

Wondering how to use optionality to your advantage? Speak with our digital experience team today.

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