How can technology provide critical improvements to customer experience in banking and financial services?

August 2017 | PROFESSIONAL INSIGHT | BANKING & FINANCE

Financier Worldwide Magazine

August 2017 Issue

Poor customer experience can cost banking and financial services up to £5.81bn, highlighting the need for firms to adopt new technology solutions and offer a round the clock service. The Financial Conduct Authority (FCA) report, which was released in late April, estimates that the total number of complaints decreased in the second half of last year by 14 percent. However, changes in the way the FCA measures complaints means that the number has, in fact, increased. According to the FCA complaints data report, which helps assess how well financial services treat their customers over time, the largest number of complaints were related to general administration and customer service.

The financial services sector is constantly impacted by the rising use of technology, and in a progressively digital world, customer experience is ranked against tech giants such as Google, Apple and Uber, which are not hindered by outdated legacy systems. For banking services, the shift in methods of transaction has facilitated personalised engagement, allowing digitally savvy customers to engage in banking across multiple channels. However, digital engagement alone is not appropriate for such a diverse customer base, where in-person services are still required for the elderly and those without internet access or capability. Recent research reveals that with UK bank branches closing at a rapid rate, people over the age of 50, who are reliant on traditional interactions with their banks, could face serious financial difficulties. In addition, face-to-face financial advice still remains essential to millennials and digital natives when making important decisions, such as securing a mortgage. As a result of this, banks are now recognising that implementing technology to enhance face-to-face interaction is key to ensuring customer retention and creating an agile service.

In some respects, the digital transformation that is taking place in the banking and financial industries is undeniably bringing about positive social change. Digital banking certainly drives personalised and transparent banking services at lower cost, and also enables the financial inclusion of populations that are significantly underbanked. However, a recent report revealed that those who do not manage their finances via a digital platform are in worse financial health than those who are digitally connected to their bank branch. Financial services are investing large amounts of money into their online services, but this is to the detriment of brick and mortar branches and human interaction with customers. In order to benefit their customers, banks should be looking to merge next-generation technology with in-person services. This will allow banking services to be accessible for all, which in turn, promotes equality and better financial sustainability for the entire population.

With nimble FinTech players posing a threat to the market share of traditional banking institutions, C-suite decisionmakers are directing their focus towards creating a banking business model that will assimilate into the digital world. This will require high street banks to capitalise on their chief strengths: an established customer base and excellent face-to-face services. They can do so by exploring ways in which digital solutions can position their branch experience as one that is sustainable for the future, and furthermore, balances digital and human interaction in a seamless manner. Although the emergence of voice assistants and chatbots offer an innovative way of communicating with customers, companies must recognise that the need to speak to a highly-trained customer service professional still exists.

In order to achieve a balance between digital and human interaction, banks will need to focus on new technology that accelerates back-end processes, which in turn, enhances in-person customer service. Workflow automation can benefit this process, but innovative technologies such as uber-like scheduling tools, are now also equipped to streamline a bank’s employee network. This type of digital solution is being utilised as a way to connect mobile advisers with customers at their desired time and location via a mobile app.

Harnessing the power of uber-like scheduling tools increases accessibility and convenience, allowing banks and other financial services to efficiently manage a mobile workforce of advisers. In addition, this kind of technology cuts infrastructure costs, while simultaneously improving logistics and achieving a more customer-centric ethos – all of which can be achieved via the touch of a button.

New FinTech start-ups are utilising innovative solutions, such as simple application programme interfaces (APIs), to improve all touch points of the customer journey. Implementing open API is an excellent way for traditional banks to play into the digital ecosystem, and in turn, establish a platform for banking-as-a-service. Throughout Europe, many banks have opened to Payments Services Directive 2, which has paved the way for more partnerships between banks and FinTech players to eliminate ineptitudes in bank processes.

There is a unique emotional trust between a customer and their bank – a relationship so strong and so ingrained in the public consciousness that the majority of us do not question it. With this in mind, banks that have evaded branch closures should look different in their ability to blend digital self-service with human interaction. In order to adapt and survive in the digital era, banks need to monitor and acknowledge emerging customer trends, behaviours and expectations. Further, they must feed these into strategies to aid the delivery of their services both online and via physical branches.

Bhupender Singh is chief executive of Intelenet Global Services.

Bhupender Singh

Intelenet Global Services