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Graceful Degradation in banking

Graceful Degradation in banking

Beyond revenue losses and trust erosion, the recent Facebook outage brings urgent lessons. For banks aspiring to grow CX capabilities at scale, it is a clarion call to revisit “Graceful Degradation”, according to Muraleedhar Ramapai, executive director at Maveric Systems

An attention-deficit planet is unlikely to forget the memorable Monday moan in a hurry. For six hours, Facebook and its app family of Instagram, Messenger, and WhatsApp went down. Beyond the flood of FOMO memes, the impact to Facebook was tangible – shares fell 4.9 percent, its US ad revenues bled $545,000 each hour, not to mention the inconvenience it brought on to millions of businesses that rely on Facebook pay to access e-commerce sites. Using specific indicators from World Bank and other agencies, the cost of shutdown tool (COST) was estimated at $160m to the global economy.

An internal Facebook blog pointed to a cascade of mistakes, but the effect grows ominous as one considers how outages at brands like  Target, Amazon Web Services and Microsoft influences market leaders across BFSI and Fintechs. After all, with massive investments in digital banking, banks want to, and laudably so, replicate their scale and customer agility.

To be fair, not all of us are FOMO sapiens. But the fear-of-missing-out does influence the billions of dollars’ worth of resiliency agendas pursued across global enterprises. That fear is of course rooted due to rising global uncertainty, fluctuating geopolitical risks, an increased frequency of natural disasters, recurring large-scale outages and security breaches.

Resilience is an easy word to proffer, tricky to pin, harder to promise. But the singular difference, between Big Techs and banking, is the essential nature of services. Not being able to stream a favourite movie, upload a picture, or refresh a feed, are all lower on the “anxiety-spectrum” as compared to when banking systems go down. The sweet spot? Combine the agility and innovation of Big Techs with the resilience and reliability of banking systems.

To a certain extent while regulatory oversight shields customers’ data and deposits, the number of outages at banks aren’t negligible, in fact just the opposite. Consider, the ten outages a month at Barclays, or even the recent disruptions across Bank of America, and Visa.

How serious is the resiliency imperative?

In an age where every company aspires to turn pure cloud, the resiliency imperative is alive for not only the FAANG’s (Facebook, Amazon, Apple, Netflix, and Google). According to McKinsey research, companies report that one month or more of disruptions occur every 3.7 years, resulting in losses worth almost 45 percent of one year’s EBITDA over the course of a decade.

So, what does resiliency mean for our hyper connected world? Simply said, whereas quarantines and social distancing works for humans; for systems a different fail-safe is needed. It is called Graceful Degradation.

The business need for Graceful Degradation

The theory and practice of Graceful Degradation (GD) is captured by the question “If everything was to fail, what’s the most important thing that needs to work?” For network engineers, product managers, UI designers, and CX professionals, as we would shortly discover, the answer to that question is neither straightforward nor facile.

Let’s say you are in the middle of an online moment – booking an airline seat, at the ATM withdrawing cash, locking a stock market transaction, browsing Netflix recommendations – and the network breaks, or latency hits a threshold, or maybe a power outage or the system inexplicably behaves in an unexpected way. Complex systems, after all, are often fragile systems where macro level issues of saturation, latency, and excessive workloads are failures with more than one root cause.

What happens next? Does the seat get locked out, the card retained by the ATM, instead of your personalisation’s does Netflix offer general selections? How much of failure status does the system communicate to the user and at what stages? At the point of failure, how much information counts as good customer service and yet, doesn’t create silent anxiety? Does the “broken” system offer alternatives to delight the customer or not? If yes, how? Does it shed workloads, or time-shift it or reduce the service quality or add more capacity? Does the system prioritise between functions – may be onboarding new users smoothly over allowing latency for users already on the platform?

These are all answers to the primary question: how should the system gracefully degrade?

The ability to maintain limited functionality even when a large portion of it is rendered inoperative to prevent catastrophic failure, is how large-scale enterprise applications generate the power of resiliency.

Designing a Graceful Degradation system

In the age of CX dominance, the first aspect of designing a gracefully degradable system is probably obvious. These are the twin design features of fail fast (setting aggressive timeouts such that failing components won’t make the entire system crawl to a halt) and fall backs (designs that allows for fall back to lower quality). Once the failure has been “injected” comes the critical part –  test it.

Graceful degradation may begin with causing the failure to see what happens, but it is equally thinking about what to expect before it happens, and what was designed to happen when it does take place?

How to introduce GD in banking user journeys

  • Rather than stating the entire app being down, build portions (especially information vending) that are serviceable from multiple sources of the same truth.
  • For transactions, even as the promise and intent are to provide straight through processing, the architecture should be message driven. It should switch between request/response at full availability and publish/subscribe on lower service levels.
  • Create secure embedded data stores within customer apps that isn’t network-dependent or has to seek enterprise app(s) for every function.

Seizing the future – learning the Netflix way

No matter the cause, the fact that technology will disappoint, can be countered by the question: How can we handle the failure gracefully? What stops us from planning ahead to keep our customers happy? Ahead. Not after the feature is built, the product tested, and the version released. The profits of heeding GD lessons come to us from another iconic brand – Netflix. After its 2o12 Christmas eve outage when across parts of US, Canada, and Latin America programming went off-stream, the company put in a slew of GD measures. Netflix today regularly uses external services to simulate service failure, automates zone failover and recovery, and de-risks critical dependencies.

Eventually like Netflix, if banks are to increase GD into their operational systems, they must begin by rethinking their resiliency philosophy.
Disclaimer: Originally published on Bobsguide

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Customer Experience in Retail Banking – The Need and Top Priorities

Customer Experience in Retail Banking – The Need and Top Priorities

Retail banking has never had it worse and delivering a good customer experience is more important than ever. It is a banking sector that is still trying to build its reputation from the 2008 financial crisis, but today, customers are far less forgiving with more market players and with more choices.

Customer experience is the basis for customer loyalty in many retail banking areas, so effective internal communication in retail banking is crucial as the sector grows.

“Bottom line, having a customer-centric culture is more than just a good thing- it’s becoming a matter of survival.”
Jim Marous

To keep their customers, retail banks need to place customer experience as their focus. Looking at the customers’ need and delivering them efficiently will help keep their head above the ground.

This blog article dwells in to the various customer experience needs and priorities in retail banking, and how technology can help achieve them.

The need of Customer Experience in Retail Banking

According to a report by marketsandmarkets, customer experience market is projected to grow from USD 8.5 billion in 2020 to USD 14.9 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 11.8% from 2020 to 2025. This estimate clearly echoes on to the initiatives lined up for customer experience transformation in every industry. Let us look at why retail banks need customer experience
Customer needs are rapidly changing in Retail Banking
Today, customers are more empowered, less loyal, and usually maintain relationships with multiple financial institutions. Customers are far more demanding as there are numerous options that all want their business. Understanding the customer’s mindset and knowing what competitors are doing, could aid retail banks in devising an effective strategy that lets both sides benefit.

Positive customer experience is more important than ever as reports show that customers trust peer reference seven times over advertisements. If a customer does not get a good service, they may never return to the bank and their perception levels drastically changes. Already, customers are skeptical about financial institutions, and their reviews/complaints make more significant impacts globally with the advent of social media.
Helping Customers Select the Right Products
Customers are looking for retail banking partners who can recommend suitable products they need. Researching options is crucial in the onboarding process, and customers are looking for banks that can take the process off their hands. In the onboarding journey of customers, researching options is one of the most deficient performing aspects, but it is twice as important as any other step in the onboarding path.

A retail bank can personalize customer engagements by recommending best options based on their available information and needs. This way retail banks can significantly boost the levels of customer satisfaction. If you explain all the options available to the customers clearly, they’re more confident in their choices and will trust you better. All of these contribute in no small part towards retaining the customer.

How can retail banks offer
superior customer experience?

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Top Customer Experience Priorities in Retail Banking

  • Personalization is key

    You have to deal with customers who belong to an age where no one wants to visit the branch. So, we are more or less seeing branchless banking in full swing. This is where banks have to be very innovative and adopt personalized approaches which can help them. In order to cross-sell or up-sell, many retail banks have started aligning personal account advisors and managers who can help their customers. Furthermore, retail banks can take advantage of new-age experience platforms and systems which allow highly personalized customer engagements.

  • Omnichannel Methods is the way forward

    Fostering a seamless experience through omnichannel banking is one of the biggest trends in retail banking. The five omnichannel methods are communication, face-to-face interactions, data, onsite check-in, and online appointment booking. Communication involves keeping customers informed of all the required information on a daily basis through various channels. Data involves using key metrics to gather intelligence on what customers want most so you can engage with them in the best possible way.

    Of all the omnichannel methods, appointment booking plays the most important role because it allows customers to book and change appointments anytime, giving them enough flexibility. Retail banks worldwide are implementing different forms of appointment booking methods to make the customer journey seamless and safe. KYC processes are done virtually through videos by many banks to avoid branch visits. This trend touched its peak in the current crisis. Necessary web security controls are in place to avoid any data theft and cyber security threats. Other essential features of the omnichannel approach include mobile app integration, internet banking, and self-check-in services.

  • Efficiency is a clear choice

    Keeping efficiency for customers and staff is now paramount in delivering quality service. Putting a customer journey management system in the process can significantly improve the handling of customers in a branch leaving customers more satisfied.

    A smoother journey means less wait time for the customers, and the staff is positioned and used effectively to obtain the best results. A sound customer journey management system ensures that they are directed as customers entering the branch virtually, and staff attends to them in a smooth process. Reinforcing this kind of positive experience will encourage the customers anytime they have to come into the bank.

  • Transform customer experience
    for your retail bank.

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    How Can Technology Help?

    Customers are looking for simple banking system they can easily understand their needs and wants. Other important factors are transparency, conciseness, and precise services. Banks that are upfront about all their fees, rates, communications, and services are on the right path to keeping customers satisfied. Investing in the right technology can bring unmatched value to retail banks in raising the bar for customer experience. These include as follows

    • Flawless communication
      Communication is paramount in garnering customer experience. Effective means of communication through best-of-breed channels is a clear necessity. Technology service providers can help in building innovative channels which foster the culture of prompt response system to engage and retain customers easily.
    • Proactive Support matters
      Many customers want interactive and personal relationships with their banks, especially with regards to support. This is where retail banks also have to put efforts into advisory services through technology channels. Banks can use a combination of external and internal resources, including networks of financial experts and advisors, to provide reliable insights to their customers through apps and other means. Banks can also utilize big data and analytics to gain prior knowledge of their customers and their behaviors to deliver personal finance tools.
    • Live Assistance
      Mapping your customer’s journey with CRM software can help banks identify specific metrics such as:

      • Insights to help reduce the customer journey
      • Know and understand customer expectations to serve them better
      • Detecting common complaints
      • Identify the common touchpoints of customers with the bank.

      Based on the information obtained from the above, retail banks can serve their customers better with live assistance using advanced tools like video chat and co-browsing. Visual customer engagement methods can help banks proffer faster solutions to their customers in real-time. Banks will improve customer resolution time, cut down on the sales cycle, and assign tickets to touchpoints appropriately.

    • Chatbots
      Even though chatbots shouldn’t replace human contact, you can use them for routine and simple customers tasks so staff can focus on more significant business priorities. Some of these tasks include checking account balance, changing addresses, outstanding credit card amount, and other tasks where humans are not needed. AI can help you train the bots to handle conversations better and match language style or convenient time with the customer. Bots can also help you deliver a 24/7 availability that customers crave in today’s world. Integrating chatbots into apps can give them access to the user’s account details and provide more personalized service.

    Conclusion

    Retail banks need to transform into a model that puts customers at the heart of their service to better fit in today’s world. Previous traditional banking systems were based on services that suit the banks and not the customers. But today, where there’s fierce competition, that model may be their undoing.

    Banks need to learn to cross-sell and deliver excellent service that leaves customers satisfied to maximize their ROI. Putting the priority on customer experience can help banks compete in the market favorably.

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