Transformation is a must in today’s disruptive financial landscape – Financial institutions either need to intrinsically transform to stay relevant, or will be forced to transform in order to be still competitive. Even though the concept is relatively new, Digital Transformation sounds clichéd. A plethora of players laying out myriad definitions of what is “Digital Transformation” instills a sense of uncertainty in the best laid plans.
While most of us agree on the definition of Digital Transformation to be any strategy that leverages digital technology to transform financial transactions and business processes, many of us grapple with the implications of the implementation of such a plan. More so, when there is no clarity around – Where do I start? What should I do first?
This series makes an attempt to demystify the process and lay down a transformational roadmap. Here we take a look at narrowing down the objective of a transformational strategy to address a key concern – transform customer experience. Why is this so important? Shrinking global barriers have ensured that differentiation on the basis of a product offering is a tough ask. It’s not very difficult for a bank to come up with a comparable product, if not a better one. What matters to the discerning customer is the experience while getting the service / product delivered. That’s the USP now, the new playing field. Ensure a stellar customer experience while delivering a standard service and you have the customer locked in with more at the door. This is what I’ll cover in the current post.
Evolving the End to End Customer experience
A 2015 Gallup poll states that over 60% of customers in US prefer using a digital channel for their banking needs as opposed to visiting the branch or contacting call centers. There are countless other studies and polls that corroborate this trend with some variances on the actual percentage. It is but obvious that these “digital” customers cannot be effectively serviced by “extensions” of existing service channels, much less by the erstwhile service channels themselves. The need of the hour is to think through the desired experience to be provided and a transformational strategy to implement the same.
I am giving below the 4 essentials to deliver a stellar customer experience
a) Evolve Products
A product or feature that has seen stellar reception on a traditional channel, may or may not generate the same response if offered as an extension on the digital channel. For example, offering free checks on a Checking account might have been a good draw for traditional customers, but with an increasing number of payment / transfers happening on mobile, this might not be such a big draw for a newer customer set. This is evaluating the usefulness of the product / feature, doing a sanity check to see if it’s still relevant. This should be followed by an analysis of how best to make it available to customers
b) Build feature functionality customized for channels
“If it ain’t broke, don’t fix it” goes the adage. This cannot be more irrelevant in the digital context from a channel extension perspective. Trying to make the same product functionality available across available channels might be a time consuming and sometimes frivolous exercise. According to a survey released from the Federal Reserve Banks of Atlanta, Boston, Dallas, Minneapolis and Richmond, 78% of banks and credit unions offered mobile banking services in 2014, with an additional 16% planning to launch mobile offerings in the next one to two years. Despite this nearly universal availability, just 4% of financial institutions reported that more than half of their retail customers were enrolled and active users, while 80% reported that less than 20% are active mobile banking users. So what gives ? Continuing the above example, if the bank continues to offer its current product limitation of a say 5 transfers per month using a mobile device, then it might not find wide acceptance of mobile usage of its online banking mobile app. This is where the bank needs to perform a usability assessment to evaluate if certain product features need to be tweaked per channel.
c) Personalize and contextualize the customer experience
Personalization is the new buzz word. No one seems to be interested in the standard product offering any more, especially in the highly competitive Corporate banking world where the corporates have already been pampered with exclusive retail offerings and custom made services. Would they expect any less from their banks? Not anymore! Think of a scenario where the bank analyzes a customer’s payments over a period and can slip in an application on the app used by corporate to show them forward covers for a specific currency over the next few months as soon as they have received an invoice in that currency. One click and the corporates can buy the cover. This may not be a standard offering for all users of the app. Applications of personalization in the retail banking scenario are as abundant. With countless financial options available to consumers now, banks need to be proactive and tap additional revenue options with alacrity to ensure as large a wallet share as possible.
d) Empower employees to deliver the desired customer experience
You are only as good as your tools – we have heard this often. Delivering a digital experience is not possible using traditional tools at workplace. By adopting a more collaborative approach and digitally transforming the workplace, organizations can empower employees to use the tools and technology at their disposal, providing the creative and innovative environment that will drive business growth. Continuing with the previous corporate banking scenario, empowering a Relationship Manager with real time credit utilization data on an app accessed from a tablet, goes a long way during a client discussion for additional credit limit on a corporate portfolio. Digital transformation is not only necessary, but it also allows them to increase workforce productivity and escape the constraints of traditional business models.
In our next post, I’ll write about how banks can leverage and encourage innovation across stakeholders, and thereby add more value to products and services.