How should banks invest in the digital experience?
A friendly hello from a banker who knows your name when you walk into the branch used to be the mark of a good customer experience.
Those personal moments in the analog age now have to be replicated in today’s digital, multi-channel world. With added restrictions from COVID, financial providers and banks are under increased pressure to personalise their digital offerings to deliver the “you know me” service that customers expect.
The basics: understand customers' preferences
In a recent webinar, Chef sara bradley from Kentucky restaurant freight house shared how difficult it was to not have live feedback from a customer. Did they clean their plate? Are they happy after their meal? With to-go options only, it can be more difficult to understand a customer’s experience.
The same goes for digital-first experiences. Businesses must prioritise interpreting customers’ online behavior to understand their preferences and better cater to their needs, even if they’re not physically with them.
Financial services organisations should capture signals such as what people click on, what types of accounts they research, the offers they ignore, the language they use to search, and when they reach out to customer support.
Through collecting and analysing these signals, financial services organisations can turn customer actions into insights to predict customer intent and make proactive recommendations, sometimes before they’ve ever asked the business for assistance.
Investing in digital post-COVID
Even before we had to wear face masks and stand six feet apart while waiting in line, a survey from Adobe found that “nearly nine in ten consumers (89%) use their bank or credit union’s online banking option, and just over half of them (52%) conduct most of their banking online.”
The survey also reported that nearly 59% of consumers would not do business with a financial institution that didn’t offer digital or mobile banking services. This was particularly true of Millennial and Gen Z consumers.
It’s especially difficult to replicate valuable opportunities to consult with depositors and investors in-person.
Those consultations are an important part of the sales cycle for high-margin products. Organisations will need to accelerate their investment in digital customer touchpoint technologies in order to preserve those sales opportunities.
The question is, where to start?
There are three emerging trends: the shift towards cloud computing, the rise of question-answering systems, and the adoption of digital voice assistants.
Cost savings with cloud computing
According to Lucidworks CEO Will Hayes: “Across the Global 2000, every enterprise conversation of late has been focused on cloud. It’s exciting to see the acceleration of this transition to the cloud happening before our eyes. A portion of the business we assumed would be on prem is now moving to the cloud.”
As the security of public cloud infrastructures reaches parity with on-premise data centres, more banks shift towards cloud computing.
This is a win-win because it reduces the cost of maintaining a diverse array of digital touchpoints, and allows resources to be redirected into improving the digital experience.
Make chatbots and virtual assistants smarter
Many question-answering systems are nothing more than keyword matches with a robust FAQ.
Advancements with NLP (natural language processing) make it possible to understand a wide array of sentence structures (even with misspellings) and retrieve the right answer so customers can ask questions online through a chatbot or search bar the same way they would speak with a customer service representative in person.
Financial service organisations that invest in question-answering systems can mimic natural language interactions between a customer and a member of staff. With advancements in deep learning, those conversational frameworks can learn for themselves and understand more subtle human nuance, which is useful in the absence of in-person interactions.
Free up advisors with voice assistants
Bank of America, an early adopter in the industry, launched its voice activated assistant, Erica, in 2016. In March of 2019, it announced a suite of enhancements to the product, and reported that in under three years it had amassed more than six million users, answered more than 35 million client requests, and learned upwards of 400,000 different ways in which questions can be asked.
Voice assistants are capable of handling customer conversations at the early stages of financial planning. Over time, this self-service option will free financial advisors to focus on the higher-value conversations towards the end of the decision process.
The digital banking future
After disruptions to business due to COVID-19, and many customers concerned about their financial health, global banking and financial organizations must work even harder to differentiate themselves, in order to retain existing, and attract new customers. Personalized digital touchpoints are key drivers to this multi-channel and digital future.
The most progressive global banking and financial organisations are already embracing an effective data analytic and technology strategy to support decision-making and to set themselves apart from the competition.
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.