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!