In the latest Digital Sentiment Survey by management consultants McKinsey, banking is rated as one of the digital winners. As part of the study, users across Europe were asked about their behavior with regard to digital channels. Compared with the previous year, a particularly strong increase in the use of digital channels was observed in Germany and Austria. This goes hand in hand with an already high penetration overall, which was driven by the pandemic years, among other things. These findings are supported by those of the Digital Banking Maturity Study conducted this year by consultants Deloitte Digital. Preference for using digital channels has increased by 7 percentage points in Germany compared to the 2020 survey, strong growth by European standards. In contrast, the “Digital Banking Maturity (DBM) Index” – an overall metric for assessing a digital maturity level – improved by only one percentage point, which is low compared to other countries. Accordingly, the gap between the demand for attractive digital banking services and a corresponding offer seems to be widening, especially in the German market.

Online banking as a driver of competitive strength

Online banking is a well-established and frequently used part of the customer journey for banking transactions and financial services. Accordingly, there is great potential here that banks and financial institutions can leverage to improve the digital user experience they offer. For traditional banks, the intensity of competition in this area is particularly high, especially from neo and challenger banks. With comparable products and services, these players place a strong focus on the user experience as a key factor for differentiation. This is also reflected in their lead over established banks in the Deloitte DBM Index in these areas.

Based on our experience in the development of online banking software, applications should be consistently geared to the needs of users. In this way, the digital product experience can be improved and competitiveness increased in consideration of the developments in customer behavior described above. The customer touchpoint online banking and its refinement are also a particularly effective building block of the digital transformation because it has a high and regular visibility in the course of customer journeys.

Three important factors for a good customer experience in digital banking

Time savings and user-friendliness are generally very important factors for digital banking and thus also for online banking applications. It is therefore essential for banks and fintechs to find out what is particularly valuable to their respective customers in the interactions surrounding their accounts and payments. Key questions include: What do customers want to see as quickly as possible after logging into the application? What exactly do they want to do frequently? The answers and data collected on questions like these can be used to derive specific points for designing the user experience in online banking. These can be summarized in three overarching factors that are closely linked: Clarity, relevance and accessibility. Users who have quick and intuitive access to the data and actions that are particularly important to them should develop a high level of satisfaction with the online banking service they use. This in turn strengthens customer loyalty and the brand perception of banks.

An often-mentioned buzzword in digital banking that is closely related to the topic of accessibility is “mobile first”. While mobile devices and apps are important and firmly established channels, individual customer and user orientation must not be ignored in this case either. According to the results of the McKinsey Digital Sentiment Survey, the website and computer are still the dominant ways users interact with banking services. The factors described for improving the user experience should therefore be addressed for all target group and customer segments so that individually tailored use environments can be offered. As a result, a consistent omnichannel brand experience can be built up in this way.

Accelerate digital transformation with external development partnership

With such a target scenario for the design of the online banking touchpoint, banks are faced with the decision of whether to implement it as an in-house development or by purchasing the software from an external provider. To accelerate their own digital transformation, the external “buy” decision offers clear advantages. This is particularly true for smaller to medium-sized banks and financial institutions that have only limited in-house resources for IT and software development – especially in terms of personnel. By leveraging an already developed and mature solution that relies, among other things, on proven standard components for easy implementation, time-to-market can be shortened and a new enhanced customer experience can be rolled out quickly.

Finally, there is one important condition for implementation in partnership with an external provider: It should be possible to make continuous customizations in line with customer needs via flexible white-label software. Depending on the scope and requirements, these can either be carried out directly by the banks themselves or implemented via individual software enhancements. Such individual tailoring of the customer experience can include, for example, product configuration, multi-language capability and adaptations to local standards, or different user interface themes for customer segmentation.


Do you want to refine your online banking as the key touchpoint of your product and brand experience and thus differentiate yourself from the competition? Then learn more about BANCOS Online Banking here – our online banking suite for specialized retail banks. Feel free to contact us if you would like individual consultation or a demo of the software.

To begin with a disclaimer: BANCOS does not offer any KYC solutions of its own. As a long-standing developer of end-to-end onboarding processes for financial service providers, we would like to share our experience here on the integration of KYC solutions as vendor-independently as possible.

KYC as an elementary digital process module

When it comes to compliance and money laundering, the topic of KYC is mandatory for banks as part of their business relationships. However, in-person identification and the associated manual processes were still one of the main barriers on the way to automating onboarding processes long after the advent of digitization. Processes that had been common for a long time, such as PostIdent, quickly no longer met customer demands for convenient application processes that were as digitized as possible. In addition to the digitization of KYC, the connection with the qualified electronic signature (QES) plays a major role in automation. The combination of the two steps is what makes it possible to conclude a legally valid contract and, in the case of an installment or credit line application, to pay out the money to the (new) customer immediately.

How does a digital KYC process work today? Currently, the most common method for verifying identity is online identification via video chat (“video ID”). In this process, the applicant interacts with an employee of the solution provider, who performs various verification steps and interactions with the ID document and can thus help with any questions or problems the applicant may have. Providers of this KYC solution can usually link it to a QES, which allows complete digitization. This is a significant advantage of this KYC solution. The requirements for the applicant are also relatively low in times of more and more familiar video conferencing and high-quality smartphone cameras. The main disadvantage of video ID is its comparatively low level of automation. Due to the necessary personal interaction, it is not consistently available and manual steps by the verifier can lead to errors. From a compliance point of view, it should also be noted that video ID solutions from several providers were recently hacked by the Chaos Computer Club. As a result, it has already been banned as an identification method for the e-patient record.

Advanced development in the automation of KYC processes

In addition to video ID, which dominates the banking sector, there are a number of other KYC processes available whose primary goal is further automation. What they have in common is that they bypass personal interaction with a verifying person. However, the implementation differs significantly in each case, which brings with it various advantages and disadvantages. The following table shows an overview of these for the KYC checks discussed here.

Benefits and drawbacks of KYC methods


Auto ID: This solution uses biometric processes and is supported by artificial intelligence, according to providers. The customer first takes a photo of the ID document and is guided through an automated check of the security elements of the ID. A portrait photo or video is then taken and matched accordingly. The method enables very high availability compared to the “personnel-intensive” video ID. However, it also requires a camera-equipped device and sufficiently good lighting conditions.

eID: In this case, a German ID card with activated online ID function (eID) and a smartphone capable of NFC (near field communication) are required to verify identity. If these requirements are met, the customer reads out the ID data via an app, which already completes the process. In principle, this solution is convenient and secure. However, it should be borne in mind that the eID function is not yet very widespread in the German market and can therefore be a conversion barrier in onboarding as a sole option.

Account ID: The first step here is to take photos of the ID document and the applicant’s face. The face-to-face interaction for verification is then replaced by the customer’s login to online banking, where a one-cent transaction required by law is then carried out. Since the required identity checks can be performed via the bank account data, the process can be completed directly here as well. Due to the familiar actions for customers, the process is convenient. On the other hand, it can be disadvantageous for data-sensitive persons that they must share their online banking information with the KYC provider.

Digital identity: Services for a digital identity enable verified information and data to be stored centrally once. If these are required in an application process, they can be provided for verification via app/wallet without having to check them again each time. However, similar to eID, the use of digital identities is not yet widespread. In addition, there are a number of different providers, none of which has yet established a leading position in Germany, although potentially strong network effects can be assumed in this market segment. In addition, the diversity of providers is reflected in less developed implementation standards.

Which KYC process is best for my onboarding?

There is no one-size-fits-all answer to this question. In consideration of the technical development of the processes and the legal conformity required for their approval in terms of money laundering prevention, it is important for banks and financial service providers to continuously monitor the situation around KYC. The market and customer needs are moving further and further in the direction of speed and convenience – especially in the credit business – to which the alternative solutions offer advantages over the current standard video ID. However, these must be evaluated in terms of their potential disadvantages and barriers with regard to the respective customer target group. 

In addition to an optimized customer experience, the costs of the KYC processes obviously play a decisive role in a final decision. As a guideline, it can be assumed that video ID as a digital solution has lower costs than PostIdent. However, in comparison with more automated solutions, the costs are usually higher due to the necessary personnel deployment.

A recommendable basis is a flexible technological infrastructure that enables the connection of the individually desired KYC solution through appropriate interface competence. One conceivable scenario could be, for example, to offer customers a choice of different identification methods in the application process, comparable to the decision for a payment option in e-commerce checkouts.

Our end-to-end solution BANCOS Onboarding for fully automated application processes includes such a flexible API architecture – for the KYC area, among many others. Find out more online here and feel free to contact us if you would like individual consulting or a personal demo.

Sales platforms drive automation in credit decision-making

Especially in the area of standardized products such as traditional installment loans, platforms have long played a dominant role as a sales channel. Check24, probably the most important player in the German market, is worth a closer look. This is an example of how platforms are shaping competition not only at the sales level, but also at the digital level. Technical and procedural aspects of the individual loan providers are translated directly into information relevant to prospective customers at the point of sale. This approach becomes particularly clear around the credit decision and the associated time to disbursement of the loan. The following screenshot shows this as an example. Other platforms such as Verivox or Smava also design their credit comparison touchpoint in a similar way – albeit somewhat less prominently.

Screenshot zur Darstellung der Kreditentscheidung auf

Excerpt results installment loan request on (18.08.2022)

This consistent highlighting of the time period until payout has a high priority for the platforms when interacting with customers. This is what Check24 founder Henrich Blase says about it in a podcast interview with the industry platform Finance Forward:

“The speed of the credit decision is the most important issue for us, besides the area of interest rates. Digitally affine customers in particular don’t want to receive any more paperwork after entering their data with us. Banks are still struggling in this regard now, but I think they will move tremendously in the next two to five years. That’s one of the top priorities for us in that area.”

Some banks and loan providers obviously already meet these requirements. On the other hand, when looking at the platforms, significant differences can still be observed in the time to loan disbursement. This is also underlined by figures from the study report “Credit Processes of the Future” by the management consultancy Horváth. According to these figures, the processing time for installment loans is still longer than 180 minutes at 23% of the institutions surveyed – a clear competitive disadvantage, especially on digital sales channels.

The customer experience as a differentiator in the lending business

Customers on the demand side of the market also have needs that speak for an accelerated and convenient credit decision. Last year’s “World Retail Banking Report” by Capgemini and Efma focused, among other things, on the topic of customer experience. On the one hand, it emphasized the importance of the “delivery” of a product that is difficult to differentiate at the product level, such as a loan, for the brand experience of a bank. On the other hand, the globally surveyed customers singled out the loan application process as the most complicated interaction (“highest level of friction”) with their bank. So there still seem to be gaps between the desired and the actual customer experience.

Another important development in customer behavior is also related to digital offerings and platforms that focus on convenience. Schufa’s current “Risk and Credit Compass” identifies a significant increase in small loans. These are mainly attributed to forms of “buy now, pay later” offers, the growing demand for which is particularly evident among younger age groups due to the low barriers to usage. Moreover, this development contributed to the fact that the number of installment loans taken out rose again in 2021 for the first time since 2017.

Full automation in credit decision-making as a solution

Banks therefore face a challenging situation between changing customer needs, powerful sales platforms with high technical demands, and the corresponding alignment of their own IT and software landscape.

A viable solution lies in the implementation of a comprehensively digitized loan application process. Central to this is the most complete automation possible of the credit decision, which can bring the competitive advantage on credit comparison platforms, among others. In addition to a transparent implementation of the parameters for the credit decision, such a solution must offer a flexible interface architecture to ensure a seamless process: from the inclusion of the applicant’s data on the platform, to the integration of service providers for credit checks, KYC and QES procedures, to the transfer of customer data to the existing core banking and CRM system.

We can offer you such a solution with BANCOS Onboarding. Achieve speed advantages with credit decisions in under 30 seconds and total application processing to disbursement in under 10 minutes. Find out more online here and feel free to contact us if you would like a personal demo.

Our approach to fintech company building

Despite, or perhaps precisely because of, the current increasingly difficult market situation, we have decided to start building up this business unit now. As an established, profitable mid-sized company in the software industry, we operate with a solid capital base and without dependencies on external investors. This gives us flexibility even in difficult market situations and allows us to focus on our core business activities at any time.

The planned cooperation between the founders and the BANCOS team covers all areas of the venture. As a fintech builder, we support the founders in MVP development and in finding the ideal product-market fit as quickly as possible. At the same time, we make sure that all issues related to the company setup run as smoothly as possible. After the successful launch of the MVP and the acquisition of the first customers, our teams provide support in the later stages of the development and operation of a scalable, stable, regulatory-compliant application.

In addition to the transfer of industry and market know-how, mentoring, and the provision of financial resources, we offer extensive personnel and technical support for software development. In addition, we have various software solutions based on state-of-the-art technologies, which can be used in whole or in part as a basis for rapid MVP development if necessary.

The joint development of startups in the BANCOS Fintech Builder is designed as an independent business model alongside our core business as an established B2B software company. The capital for the investments in our startups in the Fintech Builder comes exclusively from our own business activities. The startups are not subject to any short-term targets.  Decisions for the participation of further venture capital investors can be made together with the founders depending on the development of the company, the market and the overall economic situation.

Market segment focus and application

As far as the subject matter of the business ideas is concerned, we definitely see potential beyond the hype topics. Our focus is on process automation (as RPA or workflow solutions), data analytics, AI, banking, open banking and personal finance. We are open to both B2C and B2B solutions.

The first step for founders is simple: the process starts with sending the pitch deck. After the first screening we will contact the founders in any case and design the further process.

Go to the landing page of the BANCOS Fintech Builder for further information about the program and the application.

We are using the new brand identity to communicate a number of important points relating to the company’s corporate and product strategy more clearly. This was initially accompanied by a brand architecture decision. While both the product name “BANCOS” and the associated cube element have long been part of our company, from now on we will be using BANCOS even more clearly and consistently than ever before in our brand communication. The link with our current five main solutions shows that, in addition to the core banking system, our portfolio has now become much broader and more modular. Over time, we have continuously developed and expanded our range of software solutions – such as with the core agnostic products Online Banking and Onboarding, which, among other things, enable workflow automation and embedded finance.

An evolutionary modernization

In terms of design, we have kept the color red and the characteristic cube as central elements of the logo and the overall appearance. Changes in a few key details modernize the brand overall in the process: a lighter, friendlier color tone, a new more independent block serif font in the logo, and more coherent placement of the wordmark.

In addition to the primary logo, there is a new secondary logo variant that creates a connection with our service areas in a landscape format. The BANCOS cube forms the link to the umbrella brand. Each service area is linked with a key visual based on systematically designed graphic elements. These are created by subdividing and rearranging the BANCOS cube into individual elements that are reminiscent of pixels or sections of QR codes – a metaphor for the digital transformation in which we support our customers with our software solutions.

New website as central digital touchpoint

Step by step, the new brand identity is being implemented on more and more touchpoints and media. The start of the rebranding process is marked by our new website as the central digital contact point for customers, employees, applicants, and all other stakeholders. After the admittedly somewhat information-reduced previous website, we now want to communicate our services and our company in a more relevant, comprehensive, and up-to-date manner. The launch version is just the beginning and will be continuously updated and expanded.

The financial industry in transition: New ideas instead of outdated business models

For a long time, net interest income was the most important source of income for banks. After years at a very low level, a potential recovery is just beginning. Income from commissions is also stagnating. But customers have also become more demanding, wanting individualized and convenient solutions. More and more people – especially younger generations of customers – are coming to branches less and less frequently, which brings with it incentives to save on personnel and material costs. In order to survive in the long term, banks are therefore required to develop new business models and offerings. Digitization plays an essential role in the financial sector.

Just like Amazon, Zalando, and others, banks are information-processing companies that can use the data available to them and will have to do so actively in the future. The key here is to conduct smart analyses, draw the right conclusions, and take action based on the insights gained and personalize offers as much as possible. Corporate customer data provides banks with insights into supply chains and production processes, among other things. In this way, potential risks can be better assessed or tailored financing can be made possible.

Professional IT systems: the basis for digitizing the banking business

IT solutions, such as our BANCOS solutions Core Banking, Onboarding, and Online Banking, among others, play an important role in the digitalization of the financial industry because they provide banks with the necessary digital infrastructure and smart solutions. Openly designed systems that offer diverse interfaces without sacrificing security are in demand. In order to remain competitive, the focus for banks is on dovetailing business processes traditionally divided into individual segments – including branch business, payment transactions, private and business customers. Important aspects of digitization in the financial sector are IT security, clouds and big data (also in combination with artificial intelligence). The associated processes can be automated via core banking systems as essential digital instruments in the background. Despite the holistic approach, modularity and thus flexibility are important premises for the IT solutions of banks and fintechs.

Communication with customers via mobile devices such as smartphones and tablets is a fundamental success factor. The goal is to provide consistent and convenient support via various channels – such as e-mail, social media, website, and call center. Unlike in the past, existing and potential customers no longer necessarily go to the bank branch to obtain a financing offer, for example, but obtain information online – at any time and from any location. As part of the so-called “customer journey,” communication becomes a digital experience for the customer. Branding, storytelling, and user experience (UX) are buzzwords that are on everyone’s lips for a reason. Only with digital solutions like the fast and uncomplicated BANCOS Onboarding, are credit institutions up to date and able to meet the demands of their customers.

The customer as a central factor in business activities

For banks, this opens up the potential to offer their services via platforms and digital ecosystems – a combination of software, infrastructure, and platform. Unlike platforms, which merely bring together customers and providers in a two-sided market and receive a commission in return (for example, or Airbnb), digital ecosystems bring together an expanded number of players, such as customers, providers, platform operators, and service providers. Smart apps and software solutions such as those from BANCOS are able to meet the needs of customers precisely and, at the same time, guarantee the greatest possible security. In order for banks to survive in the future, they will be required to work in a customer-centric manner, to offer processes digitally or at least with digital support and – just like direct banks, brokers and tech groups such as Amazon, Apple, and Google – to operate close to the customer with open, flexible systems.

We would be happy to present our professional software solutions for the digitalization of the financial industry to you in detail in a personal meeting. A major advantage: Thanks to modular architecture, the solutions can be optimally adapted to your individual requirements and integrated into existing system landscapes. Contact us and we will help you with our expertise!