How Customer Experience Is Changing the Face of Banking and Financial Services

April 4, 2019

Banks and other financial services know they won’t be immune to the transformations brought on by new technology. It’s only a matter of time until the Netflix or the Uber of the financial world starts the ball rolling.

The number of people who prefer to do business online is growing at a fast pace and for some, mobility is a key factor in their decision-making process. This change in habits gave rise to the first digital banks, such as Simple open a new window, T-Mobile-Money open a new window, and even Bluebird open a new window, the brainchild of a partnership formed between American Express and Walmart. And while it’s true that there is often a technological element to these solutions, it isn’t the solution itself that creates value: it’s the experience from A to Z that makes the difference. That is how companies like these win over (and keep) their customers. Maintaining this client base means understanding humans and reforming values to focus on the customer.

Many industries have already started shifting to a customer focus, but the financial industry is lagging behind. Creating seamless experiences should be their priority number one.

The Digital Age Serving Customer Intelligence

At the root of the era of automation, personalization, data analysis and artificial intelligence (AI), it’s unquestionable that customer intelligence will play a key role in our business experiences. Fintech has started to emerge and offers the public simple and effective experiences. And some of them are already operating here in Quebec.

Wealthsimple open a new window’s appealing investment solution, complete with a robot advisor, stands out from its competitors thanks to its personalized, cost-effective and fully digitized experience. With automated portfolio management, and no physical branches to support financially, the company can promise its customers high returns by reducing operating costs and management fees.

Moka open a new window, a local company based in Montreal, is also in the business of offering a solution that simplifies the investor’s daily life, this time in the form of microsavings. The application rounds each transaction up to the nearest dollar, resulting in a few cents per transaction that the user saves. As these amounts accumulate quickly, they end up making some significant larger savings amounts. After analyzing the user’s transactions, the app can also suggest various ways of saving money.

These companies are using technology to create value, and this powers their business models. There are other examples of more modest technological solutions implemented to support an existing service, like chatbots, fee optimization, online appointment scheduling, reducing wait times over the phone, etc. All of these digital solutions are designed to bring the customer closer to the service he/she needs, at the right time, and eliminate possible irritants.

To deliver on this promise, most institutions will have to push their technological infrastructure (which is sometimes obsolete) forward and embark on major modernization projects. These projects are essential and have to be carried out systematically within the organization, while simultaneously improving service delivery via other rapid deployment initiatives.

Moving from Product Development to Experience Creation

While it may seem that the financial services industry’s biggest failure would be to neglect these technological projects, it is actually more important to develop a customer-centered approach. Transitioning from providing expertise as product creator to experience creator is fundamental in this process.

To offer an experience that goes beyond expectations, a company needs to understand the customer’s reality. All of these interactions, across all channels, are used to build customer intelligence and target life moments, emotions, projects and objectives more clearly. These factors are just as important throughout the entire customer journey, in order to communicate consistently and develop a relationship of trust with the customer. To achieve this, banks have to change their way of doing things and adapt their structure. Eventually, this transformation will guide their behaviour at all points of contact with their customers.

The institution also has to cultivate its ability to adjust its business model and value proposition. The first step is to adapt the product and service offer to match its customers’ needs, then focus on resolving the irritants they encounter along their experience. These skills require breaking down walls and overcoming internal limitations or other administrative/organizational obstacles. By establishing governance, the various parties involved will be merged and consequently, the customer experience can be measured, improved and managed on a continual basis.

And don’t forget that the employees play a pivotal role in the customer experience and they are the business’ main ambassadors, especially the employees that have direct contact with the company’s customers: they understand their clientele and their grievances. The important thing is to listen, equip, and give customers the necessary flexibility to act with their satisfaction in mind, then embed this customer-centered business vision.

The Banking Experience of Tomorrow

The financial services industry still has the potential to impress consumers with positive and memorable experiences and, to develop share of heart. And that’s exactly what USAA, a Texas-based financial institution, did when it prioritized a culture of innovation with their customers and put it at the heart of their business. Disruptive technologies are more and more common and are transforming our habits.

As is the case with many industries, there is a good chance that small organizations will push larger ones to change their ways. It’s increasingly difficult to use legal or organizational policy reasons to avoid implementing a new solution made possible by technology. This is where startups get one up on their larger competitors and can sway some of their customers. Eventually, financial services have to transform so that their customers don’t gradually move toward niche alternatives, for each product and service.

The banks of the future will deal with their customers in a personalized way, consistently across all channels, regardless of the vertical desired. They will use AI to learn, analyze and improve their personalization and service delivery, in addition to making it possible for other systems to connect to it (open data). Some are betting that Amazon, Apple and the other big five are getting into the game to offer self-service financial products (banking-as-a-service), using virtual assistants. To date, even if no one can know exactly how it will all take shape, we can say one thing for sure: the banks of the future will definitely distinguish themselves with exceptional, frictionless customer experiences.

Director, Consulting Services