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Innovation and Insight: The Changing Face of Retail Banking

A recent report published by the British Bankers Association (BBA) and advisory firm Ernst & Young - entitled It’s In Your Hands - the second in their The Way We Bank Now series - shows how ongoing digital banking transformation, growing consumer adoption of technology, and increased competition among banks is delivering significant improvements to customer engagement and service in the UK.

What we’ve seen is that the success of new entrants, as well as existing banks, is increasingly determined by whether customers are at the centre of the organisation’s overall strategy. Pressure on high street banks is mounting in light of a recent bank account switching regulation that simplifies the option for consumers to change providers if they are dissatisfied with service levels. Nearly 800,000 UK consumers have switched current accounts since last September. With churn rates on the rise, financial organisations need to do all they can to keep customers onside. This involves more engagement and personalised service.

In the last decade, technology and digital services have rapidly progressed and the financial sector has had to adapt to this change of pace to an increasingly digital and savvy consumer base. Customers are more mobile than ever before, engaging on the move and demanding a more agile and fluid service from banks. The industry has seen a rise in the adoption of online and mobile banking and specialty apps such as Barclay’s PingIT to offer easier payments on the go. Apple recently launched the Apple Watch and new mobile payments platform Apple Pay, demonstrating the fast evolution of futuristic concepts of wearable banking across Europe. There is an escalating demand for these innovative products and digital access points, which will be interesting to monitor.

In terms of here and now, the BBA evaluated what their survey told them UK consumers want from their high street banks:  

Multichannel Choice                                                                                    

People want to have options when it comes to banking. Their preferred interaction channel can vary by type of transaction and customer segment, even within the same day. Banks must now share data across channels and make use of analytics to enable relevant and timely engagement, helping bank employees offer the right services and products at the right time. Customer service teams also need to monitor these touch points for negative comments and feedback and be very responsive in order to meet expectations. Research Verint conducted earlier this year showed that 45 percent of businesses admit they rarely, if ever, analyse social media posts, but one in three consumers believe social media makes brands more accountable than ever before. So with customers talking about their experiences across a vast array of touch points, the true leaders in customer experience are already listening to the Voice of the Customer across most channels.

Viva the High Street Branch                                                                          

The branch will continue to remain integral to banking in the 21st century. Although the size of branch networks is expected to continue declining, the branches that remain will be essential for more important or complex needs such as getting a mortgage, investment advice, or resolving a complaint. Barclays Bank, in particular, is embracing technology innovation within its physical locations, bringing functionality typically offered online into the branch environment. Last year, two million transactions were completed on Barclays’ in-branch iPads.

Don’t Wait to Innovate                                                                                   

More innovation is required at a faster pace, and senior management must update their strategies and budgets to drive change, or risk losing out to the competition. They need to realise, however, that not everyone is comfortable with the newer technology. As Steven Roberts, head of strategic transformation at Barclays, has said, “Technology is nothing without people.” Barclays now has 7,000 “Digital Eagles” in its branches to help customers get online and use the latest mobile apps. By making them more comfortable with self-service technology for routine transactions, the bank can focus the strength of its branch staff on sales, financial advice and more complex customer service needs.

Above all, banks will need to address the requirement to deliver a more personalised banking experience to consumers. They can do this by capturing interactions across all channels, sharing insights from customer feedback with their staff, and by monitoring all touch points to inform a 360-degree view of each customer. High levels of innovation are now expected by customers, and financial institutions which implement innovative practices are going to benefit from a hugely digital and savvy audience. It’s up to them whether they want to seize this opportunity to succeed—or remain outdated in their approaches to banking and be left behind by their competitors.


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