CTO of Infostretch, a digital engineering services company that helps enterprises prosper in the digital age.
We are living in an on-demand, “Amazon Prime” world where consumers judge their service providers on value, service and speed. Financial services are no different. Just as consumers expect an omnichannel retail experience, so they increasingly look to their financial providers for an omnichannel banking experience.
The strategic adoption of digital technologies has proved a major enabler — across all industries — for competitive differentiation. Some sectors have been quicker to adopt a consumer-centric approach than others. Retailers and social media giants are known for their intuitive customer experiences, while some more traditional industries, less so. In banking, digital has helped companies optimize transactions. While back-office efficiencies are understandably important, from the customer perspective, the banking experience as a whole needs a reboot. For example, industry research consistently finds that trust in banks is ebbing. What’s more, consumers tend to see very little that differentiates the big banks, while also being increasingly willing to make values-driven decisions when choosing financial products.
Experience As A Spectrum
To understand why a customer experience (CX) overhaul in banking is needed, we need to look at the values and preferences of millennials and Generation Z. Digital natives care little for opening times (access should be round-the-clock). They prefer to be able to bank wherever and whenever they choose over the reassurance of a bricks-and-mortar high-street presence. And they’re happy to give their business to the brands whose values match their own.
It’s clear that banks and financial institutions need to modernize their customer experience to appeal to younger generations, but they can’t rip up the traditional customer service rulebook just yet. In truth, customer experience needs to be seen on a spectrum, with appropriate journey options for different customers, which in effect means keeping four generations of customers happy.
Shifting To A Customer-Centric Model
Winning over customers depends on delivering seamlessly designed customer experiences, which is why the new wave of financial services pioneers have borrowed the lessons and design principles from customer-centric industries such as retail. They have shifted from a transactional mindset to one where fulfilling expectation is half the challenge, the other aim being to anticipate future needs.
Multichannel Good, Omnichannel Better
Both multichannel and omnichannel approaches offer customers a variety of ways to interact with banks. The differentiation lies in omnichannel’s focus around the customer journey. The omnichannel experience enables a contextual understanding of the customer at every digital touchpoint.
Experientially, this feels like the financial provider is meeting the customer wherever they happen to be on their journey, rather than trying to keep up with them using a multitude of different communication channels. Technically, it’s more sophisticated too: Omnichannel is truly integrated, leveraging one source of data truth even when users move from one channel to another, in contrast with traditional systems that need to duplicate data from channel to channel.
Another important advantage of omnichannel is that it enables businesses to personalize interactions as never before, delivering customer experience on a spectrum catering to different generations and tastes.
Evolving Customer Journeys
What worked for your customers pre-pandemic might not work any longer. The onus on financial institutions now is to design engagement paths around their customers’ new preferences.
One obvious casualty of the pandemic has been the decline of cash, with a corresponding uplift in the use of contactless payment methods. Factoring in the increased use of digital wallets and biometrics in paying for goods and services is integral to improving customer experience, because 85% of consumers expect digital options when they pay for goods in person and 65% prefer contactless payment methods, according to a recent report from Visa.
While digital touchpoints will inevitably play a more dominant role than in-person interactions in the banking sector, keeping the human touch will be just as important.
Designed For Digital
A big CX challenge for banks is that there is a limit to the amount of retrofitting and redesigning they can do before they need to address the capabilities of the existing (often monolithic) digital systems.
Yet, many banks are facing the reality that this kind of fundamental rebuild is not only necessary in order to realize their vision of customer centricity, but that it’s getting increasingly urgent. After all, their fintech competitors, digitally native from inception, can call upon powerful data analysis on flexible, cloud-based architectures to rapidly pivot their business around changing market forces.
Knowing Your Customers
Companies that are digitalized to the core also gather and use data better. One example of this is personalization. More personalized interactions on the customer journey are good for business: They hold the customers’ attention better, inspire brand loyalty and lead to higher sales. Social media platforms know this very well and will anticipate what users want to see next. This element of prediction has been missing from customer engagement in banking. For example, the pandemic caused financial upheaval for many, but how many banks were able to respond to their customers’ shift in circumstances?
Drive Digital Disruption Or Face Customer Churn
When it comes to rolling out hyperpersonalized products, there is no silver bullet. Rather, it requires banks to integrate – in real time – digital capabilities such as AI, big data analytics and cloud-based architectures. To better understand and respond to customers, banks need to digitalize further and faster.
Consumers expect more from their banks — and why not, when social media platforms and retailers can anticipate their needs and provide services when and where they need? Customer experience is now a critical factor influencing how financial providers engage with consumers and compete against one another. The omnichannel approach, with its focus on seamless, contextualized customer journeys, allows banks to address the full spectrum of their customers’ needs. It is time financial providers took advantage of the tools and platforms that are now available to create intuitive and authentic omnichannel experiences that reflect how their customers live their lives.
