The banking industry is undergoing a profound transformation. The previously stable banking market has taken on new competitive dynamics in recent years. Due to the high information intensity, the industry is particularly affected by the changes of digitalization. The banking industry as such has been characterized by a deconstruction of value creation for 20 years now. Large banks in particular have had to reorganize large parts of monolithic value creation through in- and outsourcing. The penetration of all customer-facing, in-house and service provider processes with information technology has become the primary differentiating factor in competition. In view of modern communication technologies such as the smartphone, the latest wave of digitization transformation affects the customer interface in particular. The smartphone enables new forms of automated customer interaction and modern forms of data analysis. The customer and his changed behavior are thus at the center of the digital transformation.

Banks find it difficult to differentiate themselves from the competition with traditional offerings such as accounts, loans and savings accounts. Financial services have traditionally been low-involvement products for the customer (so-called low-interest products). Traditional banks have treated the customer relationship stepmotherly in recent decades. Retail banking has been elevated to standard mass business, and the bank customer has been pushed out of the branch. In the wake of the digital transformation, this strategy is increasingly leaving its mark on balance sheets in terms of customer numbers and revenues. Gone are the days when the whole family was a customer at the same bank. Today, it is much more important that the bank fits the customer and their needs profile. Digital solutions that are easy to use and available at any time are a better fit for the mobile usage behavior of young customers than branch visits, where long waiting and call times have to be planned and the outcome of advisory discussions is also uncertain. Price increases due to high operating costs and low interest rates are passed on directly to the customer. As a result, many customers are increasingly questioning the traditionally strong customer relationship. Customers can now choose between the offerings of traditional and innovative, new types of providers (FinTechs) for checking accounts, credit offers, or investment products. Lower switching costs thanks to simplified account switching services with video identification enable customers today to quickly switch their banking relationship to a digital competitor. Gone, therefore, are the days of loyalty. New technology-centric competitors such as the German N26, the English Atombank or the U.S. player Moven can thus establish themselves as a serious alternative in the market with a novel range of digital, standardized banking products. Technology players such as Amazon, Apple, Google and Facebook are also eyeing the European market with their first banking solutions. N26, die englische Atombank oder der US-Player Moven können sich so mit einem neuartigen Angebot an digitalen, standardisierten Bankprodukten als ernstzunehmende Alternative im Markt etablieren. Technologieplayer wie Amazon, Apple, Google oder Facebook schielen zudem mit ersten Bankinglösungen auch auf den europäischen Markt.

New business models and the low level of interest rates are causing major worry lines, especially for the top management of traditional banks. Data-driven business models of new competitors do not need the bottleneck of outdated IT systems, especially core banking systems. Traditional banks, meanwhile, continue to struggle with high administrative costs. Price pressure has increased as a result of the intensified competitive situation and declining customer loyalty. The cost of providing services, particularly through branches and outdated IT systems, must be reduced in view of structural change. The increased use of electronic, mobile services is tending to lead to a decline in personal interaction, which reduces the strategic importance of the branch network. The customer advisor used to be able to provide comprehensive support for the bank customer's purchasing process, from information search to advice and conclusion of the purchase - all from a single source - at the main bank branch. The increasing self-efficacy of customers on the Internet has already changed much here. The bank advisor's offers are becoming more transparent and easier to verify thanks to the Internet with rating platforms and social discussion forums. As the customer decision model shows, customers can already obtain information in the search phase via electronic channels and media depending on their personal capabilities, using comparison portals and social networks in addition to bank websites. The customer advisor, who only becomes involved at a later stage, must therefore have the same knowledge at the point of contact as the informed customer. Due to the decreasing frequency of interaction, i.e., rather infrequent personal branch visits, this is hardly possible for the advisor. The advisor first has to laboriously re-record the customer's inventory data before he or she can even address the individual decision-making factors - in other words, the screws that need to be turned if a successful conclusion is to be reached. The advisor's verbal persuasiveness alone no longer seems to be a solution here. The banks are in a dilemma in this respect, since the personal customer interface can no longer be served comprehensively for cost reasons, but the potential of new types of digital technologies has not yet been exploited. Time is pressing, however, as competitors are waiting in the wings.

The customer therefore knows his problem much better than the bank advisor and already has possible solutions in mind. In the course of the emancipation of the end customer, it is no longer the expertise of the advisor that is decisive, but factors such as habits, a sense of usefulness or user-friendliness that come to the fore in the search for suitable alternatives. The habitualized trip to the bank advisor for all financial questions is a thing of the past for numerous customers. Trustworthiness and personal relationships still pay off in this respect, but many advisors have contributed to the loss of loyalty among customers through profit orientation. The modern bank customer is already led during the alternative search by its affinity opposite the offerer. Factors such as: Does the provider's presentation suit me? Have I or those around me already had negative experiences with the provider? Does the provider stand up for me? The approach to the customer must therefore be as individualized and personalized as possible.

Digital customers also act driven by the intention to have an external effect. New providers enjoy a trust advantage because their solutions are easy to use and at the same time "in". If a new checking app is frequently visible, customers tend to follow society's code of norms. A digital leap of faith, so to speak. It is the internal and external impact of digital solutions that is convincing. But watch out: When evaluating digital banking solutions, user-friendliness and pleasure in using the service continue to count. Their assessability has increased significantly in times of social media. The truth is on the screen. If something doesn't fit here, there is a threat of withdrawal of trust and migration of nomadic customers. Often, the customer is then threatened with a verbal roundabout in rating platforms.

Banks must set new standards in customer behavior and shape them before others do. Easy-to-use digital solutions for all standard business transactions make it easy to dispense with the branch. Only personal consulting should then take place in the branch on the basis of all the customer data made available, at least as long as purely digital solutions such as virtual consulting sessions are still in the pipeline. Before that, service processes must be standardized across all channels and without interruption, otherwise mobile customers will end up back in the branch with their problems.

Digitization is predominantly an organizational issue that requires a structured approach to rethinking all business processes. What does the bank need to do to achieve this? The interface between people and technology must become the focus. Business processes must be redeveloped along the buying process, without paper-based media breaks at the process interfaces. This can reduce processing times and increase service quality. This in turn generates trust and loyalty among customers. In today's fast-moving world, customers can quickly find themselves somewhere else, e.g., with digital competitors.

Convincing personalized offers are a possible reason for switching. Thanks to high usage frequencies on the smartphone, providers could make customers precisely tailored, individualized offers based on the data collected before the bank has even seen the customer. If the customer spends a large part of his day on the provider's platform anyway, the provider could extrapolate the usage data (e.g., websites visited, movement patterns or social interaction data) of its customers on the basis of statistical models in order to personalize offers precisely to the customer. This is made possible by Big Data techniques based on mobile usage data. In addition to needs fulfillment (ex-post), this could also be used for proactive needs identification (ex-ante). Arousing needs that the customer is not yet consciously aware of gives the provider a maximum head start in terms of time over the competition. With such an offer, the customer could skip the process phases of alternative search and evaluation. Ideally, this also saves the customer time and is very convenient at the same time. The self-control of the customer decides then, on the successful conclusion of the purchase process - the customer must click only, in order to lock for example a consumer credit. Those who know the customer and similar customer groups well therefore have a decisive advantage in the digital competition. To compete in this new competitive space, banks need new digital solutions that keep in touch with the customer at the mobile interface, if necessary across banks. These solutions must meet the customer's perception of usefulness and demand for user-friendliness. Only in this way is it possible to collect the necessary data to pick up the customer at the right time and place with the right offer. Customer knowledge is therefore becoming a key competitive factor in digitization.