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A level playing field: Competing for customers in a digital-first era

If there’s one thing that’s abundant in this digital era, it’s choice. Being hyper-connected has made it easier to reach new customers, and in turn, your customers are constantly being pulled in different directions when they’re looking for banking options that suit them - and it’s easier than ever to switch. 

One of the casualties of this era is the concept of a ‘bank for life’ - especially for younger customers. Digitally native Gen Zers are the least likely generation to stick to their bank, as more than half switched their main bank account within two years of turning 18. In recent years, agile, app-savvy neo banks have disrupted the consumer and business banking spaces, offering novel features and seamless experiences that attract more digital-savvy customers. Meanwhile, branch closures over the course of the pandemic have levelled the playing field against banks with large physical footprints by normalising digital interaction as the default. 

What’s more, traditional banks are no longer competing only with fintechs, but every business customers interact with. This is driving change across the sector as it rapidly expands following record breaking levels of investment this year  - in 2020, 89% of financial services companies implemented new customer experience (CX) tools and processes. For these newer finserv businesses, what makes them highly differentiated from their incumbent counterparts is their commitment to CX - but businesses of any size and age can compete with this commitment, given the right tools. 

What new fintechs are getting right

Financial services brands, such as Monese and Wise, and innovation-driven finserv businesses like Siemens Financial Services are at the forefront of CX innovation, adopting digital and omnichannel approaches that are helping them win and keep customers in this hyper-competitive digital-first world. But the competition between newer businesses and the existing giants of the sector is fair - CX is a level playing field where all banks, neo and established, can compete, as even small investments can lead to lasting wins. 

A common mistake enterprise banks in the sector make is assuming that change requires massive investment in tools and training, and so putting it off until it’s too late. It’s not about multi-year rip and replace transformations, but incremental shifts that can deliver quick value, more flexibility and greater customer insight. Newer ‘born digital’ fintechs have an edge here, as they’ve been built on flexible platforms from day one, to continuously evolve and add new features as they need them. 

This has allowed them to respond more quickly to customer feedback - for example, retail banking customers now expect features like real-time balance updates, budgeting support and even the ability to split bills with friends. Incumbents need to both attract new customers and retain existing ones, by innovating or matching these features early on, especially when feature ideas are so often found in customer forums and feedback. Taking a wait-and-see approach to new features, or worse, not listening to customer insights, can lead customers to switch to a more responsive, eager-to-please business. 

Be available to your customers on the platforms they use

When it comes to seeking support, nearly two thirds of customers (64%) expect to receive real-time assistance, regardless of the channel they use. It’s not enough to have an outsourced call centre anymore, as customers become more chat-oriented than before. Omnichannel tools help fintechs talk to customers, securely, where they are - be that chatbot, webform, social or even WhatsApp. In a dynamic field like fintech, where there is so much competition between incumbents and new risers, having more than one channel to reach your customers can help to make sure you’re not being left behind, outside of the room where it all happens. 

The proof, as they say, is in the pudding - when Monese adopted an omnichannel solution, it decreased its overall first response time by 59%, boosting its customer satisfaction rating by 10 percentage points. 

Limber up; stay agile; leap ahead

Agility should also form a central part of your business and CX strategy - and the two are closely linked. Greater agility allows you to identify opportunities, pivot quickly when needed, and keep up with increased customer demand. Siemens, for example, invested in agile, scalable tools that allowed them to extract and easily view customer data and insights, which meant that when ticket volume increased 30% at the start of the pandemic it was able to quickly adapt and manage the influx. Similarly, Wise has made great use of automation tools to create better self-service support for customers, even across 11 languages and several support centres, learning from customer enquiries to develop meaningful answers to frequently asked questions and mitigate inbound ticket spikes. 

Best, not first

Whether it’s automation, omnichannel, data insight, or rapid scaling - every fintech company will have a different challenge depending on where they are in their journey. But it’s not about being the first one across the line, powered by advanced, expensive and complex systems - it’s working with what you have to build relationships with your customers. Trust is earned when what you do matches what you say. If you tell your customers that you’re the best company for them, it should be backed up by making sure every experience makes them feel heard and valued. This way, customers don’t feel the need to switch - they’ll stay where they know they’re in safe hands. 

 

 

 

 

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Andrew Lawson

Andrew Lawson

Senior Vice President EMEA

Zendesk

Member since

26 Nov 2021

Location

London

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This post is from a series of posts in the group:

Digital Banking, Mortgages and Savings

Latest thinking in respect to mortgages and savings within the digital age.


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