The digital battle cry – are the legacy banks listening?
By Alex Klose, Head of Marketing of cloud communications software and solutions provider IMImobile
Digital technology is disrupting nearly every industry, and banking – now in the crosshairs of the new kids on the virtual block – will be no exception.
Consumers already have the computing power in their pockets to do most of their banking – like payments, mortgages, credit cards, loans and savings – on the move.
As a direct consequence, branch transactions are falling by around 6% a year. Walk into any bricks–and-mortar high street branch in central London today and you can almost see the proverbial tumbleweed rolling down the aisles.
The big question though is whether the financial services sector is about to face its “Uber moment”. Is so-called FinTech, in combination with artificial intelligence (AI), about to change the world of banking?
Banks and financial services have always used technology such as the faster payments network to make their operations more efficient.
But we haven’t seen the ride-sharing, taxi-hailing moment quite yet in terms of service delivery, transparency and quality. Uber, like Facebook and Airbnb, now dominate long-established industries because they offer an innovative, slick and yet simplified customer experience anchored around digital and mobile channels.
Likewise in banking, the FinTech challengers are also starting to give the big traditional household names a run for their money.
Start-ups such as Monzo, for example, are muscling into the sector, spurred on by reduced barriers to entry and calls for competition. It positions itself as ”a bank as smart as your phone”, offering a current account with intelligent notifications, instant balance updates and budget management on the go.
Starling Bank plans to target “millions of users who live their lives on their phones”, using data to give customers predictive insights into their life management skills and whether they have sufficient money.
The German digital bank Number26 has an app that uses AI to provide updates based on the customer’s personal banking history – and the more a customer uses their current account, the more accurate the analysis apparently becomes.
Mobile banking is transformational. Even with internet banking, you still had to sit down at a computer to access your bank account. But mobile technology and apps have now enabled the average customer to interact with their banking 20-30 times a month. Ease of access and speed is clearly enhancing the customer experience.
The listening bank
But are the C-suites at the big banks listening hard, and indeed well enough, to this new way of engaging customers?
Information insight is the key to providing consumers with products and services when and where they need them. Data – huge amounts of it – lies at the heart of this, with the ability not only to collect and analyse direct customer interactions but also to “listen” to all consumer communications about companies, ranging from call centre conversations to social media.
The quantity of raw data means AI is able to outperform humans, reviewing and analysing it on a mass scale to deliver insight into what customers feel about the bank and why. Future success will only come if traditional banks use these insights to provide a personal experience, delivering services and products on the customer’s terms.
Chatbots and virtual assistants – which help answer customer questions, find information and offer personalised content – are fast becoming standard in many digitally progressive companies. By 2030, virtual assistants will dominate in regards to informing people on both personal and financial obligations, according to KPMG.
Banks are recognising that this type of automation can provide potential cost-savings while also transforming the customer experience. For example, if AI cuts the time it takes to approve a mortgage, then staff costs can be reduced while the consumer benefits.
But there are challenges, particularly when smartphones allow customers to spread the word about good or bad service in an instant. A key issue is that very few companies can as yet deliver seamless customer journeys across more than a handful of channels. Currently only around 5% offer integrated cross-channel experience, while 27% have no integration of channels at all, according to CCIQ’s Next-Generation Customer Engagement Report.
The solution is a single place where all digital and mobile interaction channels can be managed alongside calls. Banks, like other organisations, need an application that can unify the contact centre’s existing infrastructure and processes, and provide the basis of an omnichannel customer experience.
Personalisation and cross-channel consistency are also important. When designing customer journeys, it is crucial to consider the strengths and weaknesses of each channel and try at critical points to funnel customers to whatever channel is most appropriate at that time.
Results can be dramatic. For example, IMImobile helped a traditional high street bank achieve 50% better first contact response rate for collections calls, simply by sending an SMS to the customer beforehand to schedule the call and enabling the customer to respond.
The lesson from so-called ‘unicorns’ such as Uber is that an efficient digital customer experience can be a company’s most valuable asset.