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Financial services: the race to empower customers

Last month the finance ministry announced that Britons could save hundreds of millions a year as credit and debit card fees added to payments will be axed from January 2018. The total value of surcharges for the use of debit and credit cards was estimated at £473 million in 2010. There was an immediate impact with shares in take-away food app Just Eat dropping by 6% and airline EasyJet also taking a hit. These companies may be vexed but consumers finally have something to cheer about. The story over the past few years in financial services hasn’t always been one of customer first. Analysts still favour growth forecasts and profit-and-loss statements over evidence of company cultures which are focused on customer satisfaction. On the contrary, a Watermark Consulting analysis found that 10-year investment returns from publicly traded customer experience leaders (measured by Forrester’s Customer Experience Index) were 43%, while investments from customer experience laggards generated negative returns. This highlights that bringing great customer experiences to the marketplace will be rewarded – by both consumers and investors. It’s high time that financial services took note. 

The customer comes first

Now more than ever, today’s customers know what they want. And how to go about getting it. They want to conduct transactions anytime, anywhere. Consumers have become savvier in understanding that every financial institution has stored all kinds of their personal information and that this data holds valuable insights and contextual knowledge; meaning there’s no excuse for impersonal or poorly timed communication. Whether they walk into their bank, visit the website, or call the contact centre, customers expect their financial service organisation, like any other business, to be able to provide exactly the service they need, right there and then.

In addition to better understanding how their data could and should be used, customers are increasingly lacking loyalty to financial services organisations, particularly banks. The ability to switch accounts quickly, easily and free of charge has led to many retail banks vying for the attention of new customers, tempting them away with deals and offers. It’s easy to see why a strategy based on putting customers first should be a top priority if financial service organisations want to survive and thrive in the age of customer centricity. This obsession with putting the customer first has given rise to the concept of the ‘Responsive Organisation.’ In the context of financial services, the ‘Responsive Bank’ is one that learns and responds rapidly through the open flow of information. It takes into account all available and meaningful information about the customer to drive better engagement, gain more revenue and increase long-term loyalty. But how easy is it to affect this kind of change in a centuries old sector?

Customer-focused technology

All too often a bank’s ability to put the customer first is restricted by the rigidity of legacy IT infrastructure. Yesterday’s systems of record are deeply integrated and hold a wealth of essential customer information. But they are rigid, closed to change and built for security rather than agility. These systems don’t allow for the nimbleness that a Responsive Bank requires to react to, or even predict, the service expectations of customers. Established banks have to deal with organisational complexity, the many different touch points a customer might have and the fact no one business group has end-to-end ownership of the customer journey. However, if banks want to succeed in this age of customer centricity, systems need to be integrated, so one can achieve a single view of the customer.

This is where digital process automation platforms can help spark significant change with ease. An agile wrapper is deployed which orchestrates and integrates existing systems, people and processes. It brings siloed systems together providing banks the flexibility and control needed to compete in the digital economy; providing a single version of truth across customers and products. Not only does this enable employees to engage better with each other but ultimately customers too. The ability to provide the right insight and the right context at the critical moment will significantly improve the customer experience and ultimately go a long way to nurturing a loyal customer base. Conversely, visibility into the customer profile will be of utmost importance once the EU General Data Protection Regulation (GDPR) comes into force in May 2018 which will likely see financial institutions having to deal with a flurry of data requests.

When the surcharge ban comes into effect in January 2018, customers across the country will have a bit of extra cash left in their pockets. This is a positive development in empowering customers. When any organisation succeeds in putting the customer first and delivering a great experience, it transforms the engagement and prolongs the relationship. This is the same for financial services sector as it is for any other. It’s no longer good enough to pay lip service to customer centricity, the industry must combine it with technology, such as digital business platforms, to really put the customer at the heart of the business.


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Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?

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