Staying relevant: Four pillars of the banking experience
Stephanie Bannos, Head of CX, Rightpoint, explores four pillars of the modern banking experience and how banks can stay relevant in today's market.
It’s a given that consumer banks need to invest in customer experience. With so much of global commerce already cashless and connected, consumers have come to expect seamless digital experiences regardless of industry. This expectation has been heightened by the COVID-19 pandemic, which has necessitated the adoption of digital technologies by consumers and companies alike. Unfortunately for banks, the pandemic has revealed underlying weaknesses in the digital consumer banking experience and underscored the need to invest to remain relevant.
Leading banking brands are already prioritizing investment in artificial intelligence and machine learning to improve customer targeting, orchestrate recommendations and predict churn. However, these investments only deliver game-changing results if they are applied to the consumer experience strategically. At , we break the consumer banking experience into four pillars.
Relationship Value: The tangible “what” of the experience
Answers the question: What is this relationship doing for me?
Banking has always been about relationships. What’s different now is how we can use technology to initiate, nurture and deepen those relationships. A found that 78% of banking customers would like financial advice and guidance from their banks, but only 28% feel that they’re getting it. Banks can use content, personalization and contextual education to play an enhanced role in the customer’s everyday life.
Appeal: The intangible “what” of the experience
Answers the question: How do I feel about working with this bank?
Appeal is about creating a positive emotional connection with customers by embodying three key attributes:
- Relatable — Putting customers at ease
- Personalised — Making customers feel special
- Interactive — Rewarding customers for engagement
An experience-led approach to consumer banking builds trust, empathy and ultimately provides a powerful competitive differentiator.
Ease: The 'how' of the experience
Answers the question: Is doing business with this bank easy?
According to (May 2020), NPS when opening a checking/savings account fully digitally is 53 versus 39 when done through a bank’s contact centre. This proves that the technology exists to deliver simple and easy self-service experiences and that when done well it’s preferable for customers.
Availability: The 'what' and 'where' of the experience
Answers the question: Can I consistently have the same experience and have it be “always on”?
If a bank is fully available for consumers, it has the opportunity to step into the role of guardian and steward for all daily decisions involving money. The three keys to availability success are consistent quality, persistent records and communication and ever-present access that is both reactive and proactive.
Time is of the essence.
Evolving the customer experience is imperative for consumer banks that want to maintain relevancy and growth in an increasingly competitive market. New and non-traditional entrants are succeeding because they put the consumer first. If there was ever a time to double down on modernizing investments and customer strategies, it’s now.
This article was contributed by Stephanie Bannos, Head of CX, Banking and Capital Markets, Rightpoint
Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.