In my previous blog, Drivers of Digitization in Financial Services, I had covered different factors that are pushing the financial services industry toward digitization. I delved into points such as the rise of mobile banking, task fragmentation, changing customer mix and customer expectations. All these have compelled the financial services industry to adopt technology with the end goal of improving customer experience and increasing customer retention. In this blog, I will talk about some of the changes that we are already seeing in the industry and what will it take for financial institutions to stand out and truly differentiate themselves from the rest.
1. Real-time self service versus full service
In the last five years, web self-service has lead the way in setting expectations that customers should be able to independently take care of tasks, especially in retail. Banks today are under pressure to digitize more and more of their consumer facing workflow and enable them as self-service versus full service in a bank. We are already seeing this with services such as online check deposit, online account checking, and money transfer.
There is definitely a competitive imperative for the financial services indusry to meet the consumer expectations of digitalization and to offer a level of convenience in their customers’ daily financial tasks and transactions. However, a successful mobile strategy for banks is now way beyond just the ability to have a great app with a great UI or the ability to check balances. It’s now more about offering the next-generation engagement that is driven more by customer needs and intent versus simple product push. It’s about engaging users in real-time and proactively problem solving, before the customer contacts the bank. It’s about powering customer journeys through timely automated interventions versus manual inefficient ones. In the next few years these real-time automated functionality will no longer be a nice to have, but will be a competitive imperative for institutions to succeed.
2. Real-time interactions
The need for messaging as a trend is not contained to commerce alone. Banking, too, will be heavily influenced by messaging. Major banks worldwide are already moving toward this with push notifications becoming a significant part of engagement strategy for banks, across functions such as marketing, customer fulfillment and customer service.
Going forward, financial institutions that lead the way in real-time communications with their customer base will have significant opportunity for differentiation because it is an extension of the desired human behavior. In the next few years there will be significant momentum in carrying this trend forward, where communication between financial institutions and their customers will shift significantly toward messaging, in majority of the case real-time, in favor of the traditional call center communication.
3. Real-time front-end analytics
The rise of data and analytics to understand customer behavior has been a central story in financial services institutions for nearly a decade now. There is an emerging activity layer and data set, which we call front end analytics that is coming together due to the evolution of digitized touch point such as apps, kiosks, websites, smart watches, etc. Data from these touch points today reside in isolation, so do the analytics for them. The question to ask is what is possible if one were to harness data from these touch points in real-time, normalize them to understand customer journeys across channels, and device a method to enable those customer journey’s through real-time interactions mentioned above? How would it impact transaction success and ultimately customer experience and loyalty? I think it will go a long way in enabling customers to complete their journey successfully.
The Imperatives from Chief Digital Officers
The Chief Digital Officers focus is evolving from making each digital touch point more effective through social strategy, mobile strategy, on-site strategy. The fact of the matter is that in large financial services institutions, each digital channel has its own product and engineering teams. Hence, the optimization to date on each channel has been done in a pretty siloed fashion for that channel itself, but does not adequately address cross channel, cross session needs, which is a rising imperative. The time has now come to embrace a unification strategy for real-time customer journey’s and enable them cross channel.