Transforming customer journeys in financial services

Consistently delivering a great customer experience can be challenging for banks. According to recent Microsoft research, the biggest success comes from financial institutions that focus on digitisation, personalisation, AI and self-service

Lindsay James
Lindsay James
By Lindsay James on 16 July 2021
Transforming customer journeys in financial services
Unsplash/Brooke Cagle

Today’s most successful banks have realised that experience is everything. Give customers a great experience, and they’ll buy more products, they will be more loyal and they will share their positive experience with friends. And ultimately all this leads to an uptick in revenue.

However, consistently delivering exceptional experiences is no easy feat – and it’s only getting more difficult for legacy financial institutions.

For a start, an increasing number of challenger banks are entering the fore, destroying years-long relationships with traditional players with the promise of faster, cheaper and more convenient offerings. In fact, according to data from Trading Platforms UK, European challenger banks are projected to cumulatively hit 42.4 million app downloads by the end of 2021. The estimates represent a growth of 18.9 per cent from the January 2021 figure of 35.6 million.

Customer expectations are changing in tandem with this. The majority of today’s consumers, but in particular the younger generations, demand seamless, secure, omnichannel, on-demand and personalised interactions – and they have little patience for those that fail to deliver. In fact, according to recent Signicat research, it’s clear that consumers have stopped accepting poor experiences and are breaking free. Over a quarter of consumers considered their last application process for a financial product to be difficult. And 63 per cent have abandoned an application in the past 12 months (one in five of these due to lengthy processes) and a third (32 per cent) are refusing to even start an application if they are required to take identification credentials to a branch.

If banks want to keep hold of their share of their customers wallets, things need to change. But how?

In January 2021, Microsoft sought to understand how customer experience strategies have shifted and to understand the future of the customer experience in financial services. It surveyed leaders across banking, capital markets and insurance organisations, and uncovered four key areas where significant progress needs to be made.

The first is digitisation. In Microsoft’s recent Customer Experience Trends in Financial Services: A Research Study, 73 per cent of respondents said that at least 50 per cent of their customers’ financial activities had switched from in-person to digital services.

Third-party findings back this up. According to the 2020 World Retail Banking Report from Capgemini and Efma, customers are moving to digital channels faster than they have in the past. Online banking use has risen by 23 per cent, and mobile banking use is up by 30 per cent. These changes are likely to be permanent, accelerating the migration to digital channels by three to four years over pre-crisis trends.

What’s more, with over half (57 per cent) of consumers now preferring internet banking, up from 49 per cent pre-Covid-19, and 55 per cent preferring banking mobile apps, compared with 47 per cent previously, the stakes have risen further.

What’s important for banks to realise, however, is that digitisation is no longer solely about providing self-service offerings; it’s about providing deeply personalised and differentiated customer experiences across channels.

While Ofcom’s 2020 Online Nation report found that over 80 per cent of time spent online is now spent on mobile devices, research from Deloitte has revealed that 94 per cent of mobile banking customers access their bank from their desktop at least once a month. This highlights the importance of not only providing customers with a choice of channels, but allowing them to switch from one to another without disrupting or fragmenting their journey – and allowing access to the same support, whichever channel they choose.

Digitisation is an area of focus for global financial services firm Morgan Stanley, who is collaborating with Microsoft on its cloud-first and multi-cloud strategy. The partnership will enable the transition of workloads onto Microsoft Azure, resulting in a modern, more flexible and scalable environment, improved employee experience and higher developer innovation, better service, insights and connectivity to clients.

The second trend is personalisation – which respondents in the Microsoft study believe is the key to delivering exceptional customer experiences. As one marketing executive for an enterprise capital markets firm stated: “Tailoring and personalising services for customers is something that will redefine the customer experience in the financial services industry.”

Analyst findings cement this point of view. Deloitte’s recent report The future of retail banking: The hyper-personalisation imperative, highlights how progress in other industries – ranging from retail, transport and hospitality – alongside advances in fintech are contributing to redefine customers’ expectations of banking. It is, therefore, unsurprising that 51 per cent of consumers surveyed by Salesforce expect that banks will anticipate their needs and make relevant suggestions before they even make contact.

Respondents to Microsoft’s survey are putting their money where their mouth is with this trend. Of those who said their budget will increase, the number one initiative they’re investing in over the next 12 months is leveraging data for real-time personalisation. Examples include personalised offers and communications. One respondent said: “The level of personalisation will define how much a brand cares about their customers.”

Swiss multinational bank UBS is succeeding in creating a more personalised experience for its customers on the Microsoft Azure cloud. “The cloud makes us more flexible, gives us greater cost transparency and makes us available to interact with the ecosystem,” said UBS group chief information officer Mike Dargan, in an interview with Microsoft. “All of those are great for our clients. We can respond faster to their needs and maintain security, as well as conduct better research.”

The third trend is artificial intelligence (AI). When asked about the digital technologies they used during Covid-19 and which of those they plan to continue using, respondents to the Microsoft survey cited AI-powered predictive analytics as a key topic to explore. Over 50 per cent said they used this technology and plan to continue using it, while 28 per cent said they didn’t use it, but they have plans to use it going forward.

Investing in AI will allow financial services organisations to drive personalisation at scale. Additionally, AI can allow firms to uncover new insights, such as predicting customer needs and understanding customer intent.

The final trend uncovered by Microsoft’s research is self-service. While there are many obstacles when it comes to creating a seamless customer experience, 63 per cent of respondents said they were unable to provide enough self-service options for customers.

The report highlights that self-service will be a key driver of business moving forward. Customers no longer tolerate waiting in long lines to speak to an associate when they can take care of their financial business on their own, either through a self-service device in the branch or via their smartphone at home.

Ultimately, what the Microsoft research has revealed is that organisations that are increasing their investment in the customer experience by implementing a new generation of in-branch solutions, infrastructure, and software, are better positioned for success. As one customer experience  department says in the report: “The organisation with the best technology will lead in the future.”

Partner perspectives
We asked a selection of Microsoft partners about the technologies that they believe are delivering differentiated customer experiences in financial services. Below are extracts from their responses, which you can read in full from page 112 of the digital edition of the Summer 2021 issue of The Record.

Gijs Gerts, CEO of Anywhere365, said: “Many banks embrace the shift left strategy, putting bots at the front row of customer service. But we also know that it’s often challenging to make conversational AI just as personal as a human agents. Anywhere365 has taken on that challenge.” 

Shweta Jain, director of digital and cloud product and strategy at Finastra, said: “Finastra is posed to help banks thrive in this highly competitive environment by offering solutions that support fast and intuitive onboarding with strong customer authentication and a compelling persona-driven mobile and omnichannel experience – crucial differentiators for customer acquisition and retention.”

Rajesh Saxena, CEO of global consumer banking at Intellect Design Arena, says: “Now is the time for banks to embark on their digital transformation journeys to provide customers with banking that is designed around their lifestyle through digital offers, personalised services and timely insights.”

Zubair Ahmed, executive president and general manager of MEA at VeriPark, says: “With our Intelligent Customer Experience suite, whether they apply for a loan, open an account or dispute a credit card transaction, customers are able to move seamlessly across devices and channels.”

Karen Reichle, vice president of global customer success engagement at Nintex, says: “Automation is an absolute for operational scalability, but also to deliver exceptional experiences to banking customers.” 

This article was originally published in the Summer 2021 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.

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