Rising Expectations in the Financial Services Industry

Customer Experience

The finan­cial ser­vices indus­try (FSI) is under­go­ing a dra­mat­ic shift toward dig­i­tal touch­points, with dig­i­tal-first dis­rup­tors like Atom Bank chal­leng­ing tra­di­tion­al ideas of what a bank should be, while new reg­u­la­tions like the Revised Pay­ment Ser­vices Direc­tive (PSD2) require banks to pro­vide the back-end infra­struc­ture to sup­port third-par­ty appli­ca­tions. At the same time, the Gen­er­al Data Pri­va­cy Reg­u­la­tion (GDPR) is tight­en­ing down on pri­va­cy and data secu­ri­ty.

Giv­en these changes, tra­di­tion­al banks are find­ing it increas­ing­ly dif­fi­cult to com­pete on the basis of their core products—and that’s only going to get tougher over the com­ing year. Banks that aim to sur­vive will have to shift their focus to deliv­er­ing data-dri­ven cus­tomer expe­ri­ences that set them apart from their com­peti­tors.

To find out how retail banks and oth­er FSI com­pa­nies plan to dif­fer­en­ti­ate them­selves in 2017, I caught up with FSI expert Michael Plim­soll, the indus­try mar­ket­ing direc­tor at Adobe Sys­tems Europe, for part three of this five-part series on the cus­tomer expe­ri­ence in 2017.

Michael is a sea­soned, inno­v­a­tive mar­keter focused on dri­ving effi­cien­cies and improved return on invest­ment through the bet­ter use of data and ana­lyt­ics. Before Adobe, he worked at BskyB, where he opti­mised the company’s online media chan­nels, enhanced its audi­ence man­age­ment capa­bil­i­ties, and over­saw its onsite Test & Learn pro­gram, deliv­er­ing improved con­ver­sion rates through A/B and mul­ti­vari­ate test­ing, as well as on-site behav­iour­al tar­get­ing.

JB: Michael, how do you define cus­tomer expe­ri­ence in FSI?

MP: I define it as the jour­ney the cus­tomer takes across every device, in what­ev­er ways each cus­tomer choos­es to inter­act with each touch­point. From the provider’s side, that means inte­grat­ing dif­fer­ent types and sources of data, dif­fer­ent screens, and dif­fer­ent mes­sages into a sin­gle con­sis­tent jour­ney that gets cus­tomers where they want to go.

JB: That’s a tall order to fill. What do FSI cus­tomers expect in terms of cus­tomer expe­ri­ence in 2017?

MP: Cus­tomers want expe­ri­ences that are com­pelling, per­son­al, use­ful, and every­where. They expect their banks to know them and respect them as indi­vid­u­als, to speak in one voice across all touch­points, to make tech­nol­o­gy trans­par­ent and com­mu­nica­tive, and to delight them at every turn. This means banks need to rely on real-time con­text to under­stand each con­sumer, to cre­ate com­pelling and per­son­alised expe­ri­ences, to antic­i­pate and pre­pare for that consumer’s needs, to orches­trate their expe­ri­ence across touch­points, and to con­stant­ly mea­sure, analyse, and raise the bar on the qual­i­ty of ser­vice that cus­tomer receives.

JB: Have retail banks wok­en up to these expec­ta­tions? Are they act­ing on them now?

MP: In answer to the first ques­tion, yes, def­i­nite­ly. Adobe’s 2016 Econ­sul­tan­cy FSI Sur­vey found that finan­cial exec­u­tives saw cus­tomer expe­ri­ence and indi­vid­u­alised data-dri­ven mar­ket­ing as their top two oppor­tu­ni­ties for that year. A full 62 per­cent said that uni­fied cus­tomer pro­files would have the biggest impact on their company’s advance­ment, and more than half cit­ed cus­tomer expe­ri­ence as the pri­ma­ry way they’d seek to dif­fer­en­ti­ate them­selves over the com­ing years. But the answer to your sec­ond ques­tion is more mixed. Many exec­u­tives say anti­quat­ed core sys­tems are hold­ing them back from deliv­er­ing on their cus­tomer ser­vice pri­or­i­ties, and many oth­ers cite an inabil­i­ty to share data across chan­nels as a major hur­dle. The core prob­lem is that many big banks are still think­ing in terms of tra­di­tion­al depart­ments, when they need to be shift­ing their focus to seam­less expe­ri­ences.

JB: I’ve noticed a lot of banks work­ing to improve their mobile wal­lets, apps, and oth­er dig­i­tal ser­vices. Is that help­ful, or will it sim­ply not be enough in 2017?

MP: It’s cer­tain­ly help­ful, but it’s see­ing the trees while miss­ing the for­est. Fea­tures like mobile pay­ments, “robo-advice” chat sys­tems, and per­son­alised apps are all going to be cru­cial over the next few years; there’s no doubt about that. But the much big­ger issue for tra­di­tion­al banks is that they’re going up against dig­i­tal-first com­pa­nies who spe­cialise in these ser­vices. In oth­er words, now that PSD2 requires banks to make their cus­tomer and trans­ac­tion­al data avail­able through pub­lic appli­ca­tion pro­gram inter­faces (APIs), a com­peti­tor doesn’t need to open branch­es or ATMs, or even print deb­it cards. Those dis­rup­tors can focus entire­ly on pro­vid­ing a per­fect cus­tomer expe­ri­ence, while the tra­di­tion­al banks con­tin­ue to do all the heavy lift­ing of main­tain­ing accounts and pro­cess­ing trans­ac­tions. So while it is impor­tant for banks to improve their apps and pay­ment solu­tions, these things are just com­po­nents of a more fun­da­men­tal trans­for­ma­tion: tra­di­tion­al banks need to find new ways of using their cus­tomer and trans­ac­tion­al data to pro­vide bet­ter cus­tomer expe­ri­ences than their dis­rup­tors can offer.

JB: What are some exam­ples of tra­di­tion­al banks that have brought their data togeth­er to deliv­er bet­ter cus­tomer expe­ri­ences across the board?

MP: Roy­al Bank of Scot­land (RBS) recent­ly had great suc­cess by cre­at­ing spe­cialised teams respon­si­ble for over­see­ing each cus­tomer jour­ney. They realised many of their cus­tomer com­plaints were due to dis­con­nects between depart­ments. For exam­ple, a cus­tomer would start fill­ing out a cred­it card appli­ca­tion form on the mobile app, but would have to start the same form from scratch in the branch. RBS already had the cus­tomer data to uni­fy these expe­ri­ences, so they empow­ered each ded­i­cat­ed team to make con­crete improve­ments through­out a spe­cif­ic cus­tomer jour­ney, across the bank’s app, web­site, call cen­tre, and branch­es. These changes dra­mat­i­cal­ly increased RBS’s onboard­ing rates for cred­it cards and oth­er ser­vices, and sig­nif­i­cant­ly raised their cus­tomer sat­is­fac­tion rat­ings. AXA Bank also achieved sig­nif­i­cant results with just a few small changes. By cre­at­ing a uni­fied sys­tem for man­ag­ing all their email and SMS com­mu­ni­ca­tions, they were able to up-sell and cross-sell more cus­tomers, result­ing in a 10 per­cent increase in con­ver­sion rates, and an 80 per­cent lift in email open rates. In both cas­es, it’s worth not­ing that the banks didn’t achieve these results by chang­ing their prod­ucts. They sim­ply used their exist­ing cus­tomer data to improve expe­ri­ences around the prod­ucts they already offered.

JB: So, in oth­er words, banks who want to suc­ceed in 2017 will need to invest in new ways of turn­ing data into cus­tomer delight.

MP: That’s exact­ly right. In fact, with PSD2 and oth­er new reg­u­la­tions, it’s going to become sig­nif­i­cant­ly hard­er for banks to dif­fer­en­ti­ate them­selves in terms of their core prod­ucts, like accounts and loans. Banks like RBS and AXA, who’ve worked to improve the expe­ri­ence around those core prod­ucts, will be the ones who pull ahead of their com­peti­tors over the com­ing year.

JB: That makes per­fect sense. Thanks for join­ing me today, Michael. I hope banks will take your insights on cus­tomer ser­vice to heart.

Join me next time, when I’ll be inter­view­ing Adobe’s indus­try lead in the retail sec­tor. See you there!

Customer Experience
Jamie Brighton

Posted on 05-03-2017

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