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Survival of the fittest: Digital advice, the strategic cost - income play

COVID-19 flushes away traditional banking

Last week at premier financial services event SIBOS ( a series of C-level banking executives shared their immersive visions on the post COVID growth of banks. “How will the pace of technological change push digitalization forward and how will the rise in consumer demand for new digital services encourage banks and Fintechs to work together more to innovate and disrupt the market with fresh ideas” was one of the leading themes. The FT Adviser ( just as many other news sites increasingly pay attention to digital advice in a post-COVID world. But, let’s be honest, most banks actually suck when it comes to seamless customer experience because most of their processes are still not digital at all!

With a deep global financial crisis coming up an exploding number of people will need financial advice. Young generations want this advice to be digital. But also, the enormous number of people needing advice in developing countries can only be reached digitally. On top of that the threat of the virus will urge us all to do this digital whenever possible. And, last but not least, digitizing advice and services is a key element in strategic cost/income breakthroughs.

Digital human centered advice

Modern banks plan for a viable business in the next decade, rather than just making profit in the next quarter. They should give highest priority to digital human centered advice and get rid of the manual processes in their customer servicing! Human centered advice is highly personalized advice that blurs the boundaries of online and offline with intelligent automated processes. The combination of the need for financial advice, the drive towards digital services and strategic cost/income moves will unprecedently give exploding rise to digital advice concepts as ‘the virtual affluent banker”, “the virtual wealth advisor”, “the virtual mortgage advisor” and “the virtual insurance advisor’. But also, in other verticals we see the rise of digital advisors. Think for example of shopping advisors for e-commerce, virtual brokers and virtual doctors for medical advice. Covid-19 will be the first wave that makes virtual advice explode!

Based on my operational and scientific experience in digital advice for 15 years now, I want to share my vision on this topic. I will shortly tip on my, sometimes painful, learnings in the evolution of digital advice and will translate them into a sustainable vision for banks (and other companies who operate in fast moving services environments).

Digital advice learnings

End of 2009, when I used to be responsible for daily banking at ING Retail, we were the first Dutch bank that launched a personal financial management tool under the name of “Tim”. At ING we were kings in customer acquisition so in a few months we registered over 1 million users for the tool. However, a few months later we needed smart intensive campaigning to drive customer activation. The first important digital advice lesson I learned is that excellent self-service or advice tools need to be human centered designed with customer activation as central element.

After I had left ING, I started as a Fintech entrepreneur in 2010. With my first company eyeOpen ( ), we successfully brought world’s first digital mortgage advisor to the UK and The Netherlands in 2013. In the eyeOpen value proposition we digitized the advice process for 100% for financially skilled customers. For less skilled customers we offered virtual access to advisors in our call center. My second important lesson based on this experience is the extreme power of the combination of seamless customer experience and data. I learned that even in a highly regulated mortgage advice market a strategic data play could shorten the advice process with 90 questions. That is what I would call a real customer experience breakthrough! But also, by doing this we succeeded in bringing the operational costs of mortgage advice down from € 2,000.- per advice to € 49.- per advice. Low costs, high value! I further researched this phenomenon in my PhD research on “Human Centered Virtual Advice” and developed the so called Digital Customer Experience model for digital advice ( The ability of the digital advisor to match with the personal situation was and still is a core attribute of an excellent digital advisor. This, linked with reliable, transparent and helpful processes, really makes a difference.

Based on these lessons, I launched two other companies five years ago: AdviceGames which ran a gamification platform for customer activation and engagement, and AdviceRobo which ran an innovative credit decisioning platform. Later we integrated AdviceGames and AdviceRobo into an innovative digital customer acquisition engine for banks that want to get rid of the spaghetti of onboarding applications. We also help our customers design modern digital advice solutions and often use the engine as part of the solution. More important, my lessons learned are transformed in the human centered advice software: when well executed, “seamless customer experience”, “advanced analytics” and “data” are key success factors in modern digital advice solutions.

Digital advice vision & strategy development

These lessons were learned the hard way: by doing! Based on them (and many others) we see virtual advisors flourish that design their solutions with the customer at their heart. This means that a modern advisor must think mobile first (or even mobile only). Modern virtual advisors are designed as an eco-system. Aite research shows that key functionalities for these kinds of mobile advisors are “real-time (portfolio) info”, “educational content’, ‘aggregated account info” and ‘chat/ co-browsing and videoconferencing’. On top of that virtual and augmented reality as upcoming new killer technologies for virtual advisors emerge from an increasing number of academic researches across verticals. Going back to my own research, these technologies have the ability to better match with the personal situation. Their vividness and interactivity also tremendously increase the customers telepresence and therefore their perception of usefulness and enjoyment. In short, they are amazing activating technologies that will drive customer interaction, purchases and recommendations and therefore a bank’s knowledge on their customers in digital advice environments. Companies that want to support their customers with virtual advisors have to make strategic make-or-buy decisions. What functionalities and competences are core to them? And which ones can they better outsource? Our research and experience show that well-designed and realized virtual advisors deliver up to 40% higher customer satisfaction and up to 50% lower operational costs. Most banking costs are in the traditional human labor driven processes. And in those processes, the dominant factors in costs are the advice- and customer support related ones. Modern banks therefore close their branches and switch to digital advice and support solutions fast. Human centered digital advice is the killer app for post-COVID customer engagement and cost/income ratios!





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