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Enhancing the Customer Experience in Banking and FinTech

Enhancing the Customer Experience in Banking and FinTech

Several companies make it simple for customers and entrepreneurs to do all their financial transactions online, providing convenient access to banking services whenever and wherever they need them. Online banking is a suitable alternative to “traditional,” in-person banking, especially among younger generations.

Even though the vast majority of brick-and-mortar banks now provide some online banking services, there may be more they can do to differentiate themselves and win over modern customers. Making customers happy can mean the difference between success and failure. Many millennials will look elsewhere if they can’t bank from their phone.

Consistency and efficiency in Banking services define Customer Experience

The banking industry is no different from any other service industry in that the quality of service to the customer is entirely dependent on the customer’s expectations. A bank customer’s experience with a teller may be pleasant for one person but frustrating for another.

However, what constitutes a positive banking encounter can be standardized. Having a unified profile of your customers across all touchpoints is crucial to providing excellent service. Whether a customer interacts with you in person, over the phone, or on the web, they will always receive the same high-quality service and seamless experience from the bank. Experienced banking customers know when they have received top-class service.

The future of CX in Banking

The emergence of FinTech start-ups was a major driving force behind the digitization of banking procedures, which compelled traditional financial institutions to improve their methods for providing financial services to customers. Similarly, banks are undergoing digital transformations, automating processes across entire departments to reduce overhead. To understand how these landscape-shaping trends impact Customer experience in FIs, the banking domain and tech experts like Maveric Systems bring a fresh approach.

Enhancing CX through Product and Service Innovation

Strategic requirements in banking tend to fluctuate over time. The banking industry is shifting its attention from improving the client experience to developing new products. Message and offer (sometimes masked as “advice”) customization have taken a backseat to product personalization in recent years. Banking as a service (BaaS) providers collaborate with fintech and non-financial brands to manage the overall customer experience.

There is room to enhance the experience of using conventional banks.

Three critical considerations for amplifying CX in Banking and Fintechs

  1. Data: Credit card purchases, cash withdrawals, credit history, and other financial tools generate an enormous amount of data. The more information fintech companies have about their clients, the better they can meet their needs. Insights like these allow for more tailored promotions to specific audiences.
  2. Hyper-personalization: Customers are more receptive to targeted advertisements. – In addition, AI and ML are being used to provide consumers with on-demand credit at reduced rates and other hyper-tailored offers specific to their financial situations.
  3. Loyalty and Total Wallet Share: Clients’ income, investment history, tolerance for risk, and other factors are used by investment platforms to make personalized recommendations for investment opportunities. Evidence suggests that a higher proportion of a customer’s spending comes from happier clients; in fact, one study found that a client’s likelihood of becoming a profitable customer increased by 2.4% for every point of increase in satisfaction.

Banking And Fintech Infographic

Conclusion

Due to the increasing digitization of everything in existence, banks are increasingly prioritizing innovation in customer service. Bain & Company polled 111,000 clients in 2015 on whether they would miss their mobile phones or wallets more. The fact that more than half of consumers opted to pay with their phones instead of wallets is evidence of how much the mobile and digital revolution has altered society at large and, in particular, people’s perspectives on money and their ability to manage their day-to-day finances.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric Systems accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric Systems teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Trends Transforming Digital Customer Experience in Banking Industry

Trends Transforming Digital Customer Experience in Banking Industry

Trends Transforming Digital Customer Experience in Banking Industry

Digital customer experience in the banking industry relies on a three-step journey to discover and overcome obstacles that prevent superior CX in the first place.

Recognizing customer needs through in-depth interviews to decipher explicit and implicit needs. With an emphasis on integrating financial topics present in daily life with neuroscientific clues on how they feel, these deep dives aim to record the moments that matter. Redesigning or optimizing existing practices is the next step.

Identifying and developing user-friendly services by drawing out a target vision basis the research results. Comparing this with ‘as-is’ internal services shows potential improvement and target areas for inter-departmental teams to brainstorm. Next, the ideas are put through rigorous and swift prototyping, often with real-world customers.

Reorienting the future tasks within the organization by shifting focus to closing the identified gaps between current and target states – be it the people, processes, or platforms. A flight path with milestones is drawn out, meticulously measured, and reported to leadership and stakeholders.

Three Trends transforming Digital CX in the Banking Industry

Following the mentioned three steps, banking CX teams can harvest rich knowledge (across tools used, approaches taken, and culture nuances). From this profound source, the trends that inform the future of Digital CX emerge.

Leveraging mobile apps data

Customers today expect rich, diverse, and personalized banking services with fast-paced self-service via mobile apps. Also proliferating this trend is the growth of low-no code development platforms. Banks must make the most of the collected information from apps in this altered scenario. Crucial insights, usage behavior, and important decisioning reasons are available from the data analytics tools and machine learning algorithms. These insights are a rich source to build new products and finetune existing processes that bring an edge to the bank’s brand and bolster customer retention.

Automatic Customer Onboarding

Gone are the days when filling and signing document stacks was a given. Today’s onboarding processes are not the time or effort-consuming as they used to be. Electronic processes and AI-enabled document processing has enabled banks to bring remote comfort to their clients. Be it automatic KYC or the swathes of verification submission and completion procedures, FIs continually automate the processes involved in new customer onboarding.

Digital Customer Service and Customer Engagement

Customer journeys central to how banks work emphasize easy-to-understand ways for customers to start and change payments, dispute transactions, and change account information. From using intelligent chatbot technology to investigate issues and answer customer queries –tangible cost savings come from utilizing precious bank staff. Today, regardless of the channel used, banks keep track of the customer’s needs and context. This brings frictionless service and helps use real-time data assets to pinpoint customer pain points and the quickest resolution.

In sum,

The banking market has changed dramatically post-pandemic – Low entry barriers, technological advances, and customers willing to pay more for superior services. Not only has digital affinity attracted global service providers with digital DNA,  but also FinTech businesses. The attention is on consumers who want to simplify their daily lives and personalize them through on-demand customer service. In such cases, the FI’s wide range of services is crucial because prospective customers view Banks with fresh eyes.

 

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What are the Banking Industry Challenges Digital Transformation can solve?

What are the Banking Industry Challenges Digital Transformation can solve?

Chief information officers (CIOs) and their teams at leading FIs are busy embracing the next primary phase of digital transformation.

Unsurprisingly, C-Suite bankers foresee and prepare for the “new normal” environments, such as remote working, unprecedented cyber-security risks, and an accelerated shift to digital channels. The challenges are formidable – stay competitive in today’s high-stakes, low-margin business climate that begins to limber up post the pandemic.

As the world’s top banks see the urgency of the situation, they must meticulously navigate through a maze and combat the disruption unleashed by new-age business models proliferated by the deeply funded FinTech. A case in point – An MIT Study highlights how venture capital in FinTech has grown by 600 percent in the last four years.

 This blog deliberates on the challenges the traditional banking sector faces that emergent technologies can fix.

Managing costs while dealing with Investor Impatience

Incumbent banks are often measured on a separate set of standards by investors who look for steady profits. When it comes to established FIs, investors are less willing to take chances than the nimbler and niche FinTech’s.

In this climate of continual business model innovations, legacy institutions can be successful if they embrace Technology as a powerful enabler. And for this, they need to decrease their costs – by modifying operations and initiating enhanced cost optimization efforts.

Additionally, accelerating internal digitization will produce a better-utilized employee task force.

Transitioning away from Legacy Systems

Digital Natives and Millennials are quickly becoming a critical demographic for retail and investment banking.

Their demands for personalized and frictionless services cannot be met with banks beset with legacy mindsets or technologies. For instance, the COBOL PL has been around for half a century – still finds use in many large financial systems.

Similarly, back-office Technology needs an overhaul – changing from anachronistic, siloed systems to a digitally interconnected ecosystem is a logical next step. Another crucial aspect technology is fast transforming is Regulatory risk reporting and compliance. Regulatory Tech is a must to respond to the fast-changing risk, security, privacy, and compliance regulations.

In sum, deep inside the antiquated ‘banking walls’ sits the importance of Technology.

People first, Technology second.

It is essential to remember how people, not Technology hold the key to digital transformation mandates. This insight can be evidenced in how many of the FIs go about creating their culture. Doing this successfully is what makes digital transitions less burdensome and more effective.

But this is not a straightforward or cookie-cutter process as each situation calls for examining leadership’s perspective around employee empowerment and the company’s decision-making procedures.

Seventy percent or more of financial services CEOs feel that insufficient training and a lack of necessary skills is the most significant obstacle to launching a new digital endeavor.

Nevertheless, to foster innovation, legacy institutions must prioritize human values – high emphasis on continual education, encouraging a safe environment to experiment, and promoting progressive people policies across compensation, growth, and exposure.

The takeaway is institutionalizing unique practices that translate happy employees into satisfied customers. Again, there are advanced learning tech options that can make a difference.

Changing Perspectives of Today’s Chief Information Officers

CIOs are critical stewards of digital transformations across most organizations.

They must clearly articulate the business goals and ensure that tech initiatives deliver quantifiable business value, creating lasting value over incremental progress.

To solve the industry challenges, CIOs must move beyond “managing IT.”

Their priorities must focus on the crucial customer trends – such as attracting mobile-first eCommerce consumers to incorporate AI processes that enhance decision-making or amping up risk detection proactively.

To do all this with a measure of success, CIOs must establish the role of Tech as a business and innovation partner. After that, embracing agile, end-to-end automation, PaaS, and cloud systems to forge powerful ecosystem partnerships will create unprecedented value.

 Conclusion

When it comes to digital transformation, financial institutions face obstacles both inside and externally, some connected and some not.

In the Banking industry, there is no magic cure to all challenges, but there can be a set of standard operating procedures that deals with most known variables and problem statements. Without falling into the one-size-fits-all trap, incumbent banks must move their digital transformation agendas from “nice to have” to must-have.

After all, more than playing a catch-up game, the main thrust for leading FIs is to seize opportunities that can disrupt business models, boost customer-centricity across the organization, reimagine their brand, rapidly explore new products and optimize digital operations to create unparalleled and frictionless CX.

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Managing Customer Experience in the Fintech Industry

Managing Customer Experience in the Fintech Industry

Flipping the odds for digital transformation success in the Banking and Fintech industry depends on customer experience. An influential study that dissects digital transformation success pegs banking as having the second highest rate after Telecom, Media, and Tech sectors.

Reviewing the key imperatives that bring digital transformation success – such as integrated strategy, leadership commitment, agility in governance, or Tech platforms that combine data and digital – ultimately pivot around one common element: Customer Experience.

This blog deepens into the Banking CX aspects and elaborates on best practices.

The Banking or Fintech Customer Journey.

Starting with an impulse, or a need for information, a typical banking customer journey comprises many interactions that culminate in the customer’s decision to purchase.

While each action may appear hidden, it touches a specific part of the banking organization – whether the operations model, processes, or the core technology platform.

Before addressing the best practices that govern customer experience journeys in banking, let’s round up the top three errors that are often costly.

  • Significant investments in digital banking solutions may be focused on CX but do not integrate well with the organization’s back-end machinery (processes, regulatory, and risk protocols)
  • Business and Technology tracks may be misaligned in their CX priorities and responsibilities.
  • Siloed organizational behavior may be content with incremental improvements and miss out on the quantum opportunity to overhaul the organization’s CX capabilities.

CX components detailed

Managing Customer Experience in the Fintech Industry – Three Critical Practices

While many generic best practices apply across industries – listening to customer feedback and taking prompt actions, Improving the UX and UI touchpoints, and going omnichannel – let’s focus on niche CX best practices and their underlying mechanisms.

People First, Technology Second.

Be it chatbots and virtual assistants for consumer education, creating seamless UX that is intuitive, or learning from specific digital native audiences, one profound principle for designing successful banking CX programs is – to think of customers from a 360-degree perspective.

So even if an AI use-case experimentation is underway and reams of customer analytics data are revealed, it is pertinent to connect it to customer behavior, preferences, and pain points. When technology is complementary to customer-centricity principles, banks can create hyper-personalized experiences that customers demand today. The overarching lesson is that banks must see customers as co-creators and evolution partners.

Automating for Frictionless CX

The efficiency of customer service (and overall CX) can be enhanced through the automation of administrative tasks. End-to-end automation is an excellent choice for extensive, repetitive procedures, as digital data extraction makes it possible to verify and validate documents with ease.

Notifying, communicating, and providing access to information with customers is often a straightforward automated process. For creating a bank account, it is easy to collect and verify relevant consumer information across several platforms and under specific criteria.

This can be automated entirely, relieving stress from the already-burdened staff in the banking industry. Automation facilitates quicker service, boosts client loyalty, and directly impacts the top and bottom-line metrics.

Embracing the Trust Equation.

To rid customers of their confusion or anxiety is to gain instant trust.

A widely cited Banking Trust Barometer report highlights how a climate of “information bankruptcy” can erode an organization’s immediate and longer-term reputation. So, while customers’ involvement may be restricted to opening an account, applying for a home loan, or buying a specific insurance product, it is pragmatic for banks to educate them across the more significant aspects of the economic outlook, market, and investment trends, and noteworthy regulatory changes that they should anticipate.

A successful banking CX program evaluates various UX, and UI touchpoints from the lens of “Trust created Vs. Trust lost.” Consider, for instance, the Monzo lending app that uses reminders to ensure customers celebrate their on-time payments or the TransferWise app that offers pricing calculators for customers to understand their charges – two examples of bolstering customer confidence at appropriate moments in their journey.

Finally, how big is the “CX-stakes”?

A BCG research study credits exceptional CX as the springboard that differentiates the market leaders – Amazon, Apple, and Google.

Seen across a ten-year run, companies with higher customer satisfaction scores quickly generate twice the shareholder value over the average performers.

The firms report higher price-to-earnings ratios, greater total shareholder returns, and better earnings.

Conclusion

While the entire digital transformation journey for banks involves processes, rules, engines, scalable tech-ops, governance compliance, and increasing usage of intelligent self-learning systems, the gains of doing the right thing at the right time (or the CX-beneficial actions as mentioned above) will be rewarding in the longer term.

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How does Customer Experience Drive Digital Transformation?

How does Customer Experience Drive Digital Transformation?

Even before 2020, digital natives and new business models that put technology first were causing significant changes in the financial services industry. So, when the Covid-19 pandemic caused shutdowns worldwide, all financial services providers were forced to offer remote engagement options to their customers, whether or not they were ready to do so. This was true for both direct-to-consumer payments and business-to-business payments with small businesses.

BCG research shows that companies with the highest customer satisfaction scores have created twice as much value for their shareholders over the last ten years as companies with the average score. These companies have made more money, but their price-to-earnings ratios have also increased, which means that their total shareholder return has also increased. This customer insight makes Amazon, Apple, and Google market leaders. 

The Fast Changes in the Banking World

Financial institutions, especially those still relying heavily on a brick-and-mortar model, had to make significant changes to adapt to an entirely virtual market. Transactions moved online, customers wanted to be able to help themselves, and automation-driven tools helped customer experience teams grow to handle the rising number of contacts. It became necessary for businesses to get products to market quickly without compromising data security and measures to prevent fraud. Then, long-term resilience required the flexibility to grow or shrink in response to repeated closures and changing contact rates.

Fintech, already tech-savvy and flexible, was better prepared to weather the global storm and grew faster than its more traditional peers. But many well-established financial institutions could change quickly by using new cloud-based services and a scaled, agile approach to drive efficiency and speed.  

CX should be an essential part of digital transformation.

During the pandemic, more people worked, shopped, and banked from home or on their phones. This made businesses and customers rely more on digital technology. Health and safety became a more significant part of the customer experience in places where personal interactions were still needed. Behind the scenes, a lot was also changing in the financial services industry. The number of calls to contact centers went up, and most banks saw an increase of more than 20% in the number of digital accounts opened.

The following direct cause-effect relationships amplify the CX efforts banks must make.

Innovating the ‘new’ in human experiences. 

Incremental gains of 5 to 7 percent yearly do not impact the bottom line. For improvements to have a natural effect, they need to be between 30% and 50%. Companies are graduating to using human-centered design to create customer experiences that change the game. This means building a robust design function that hires, trains, and supports designers who focus on people. This method allows for significant changes by starting with a goal for the future and working backward to get there.

Team Integrations across the company. 

Companies must combine their budgets and projects for change initiatives into fewer, better-coordinated efforts focusing on customer journeys or customer-centric value streams. This way, the changes sustain and are genuinely transformational. For this strategy to work, companies must change how they handle governance and funding. Additionally, teams should be allowed the power to make decisions about design and implementation, while leaders set the direction and give permission to spend money.

Synchronized customer and channel interactions. 

Increasingly banks realize that they must first create a central database where they can store all the information about how each customer interacts with them across all channels and business lines. So, everyone in the organization will have the same level of understanding about the customer, which will reduce friction. Next, companies need to create a highly automated solution, usually powered by artificial intelligence, that can continuously collect and analyze data for each customer and suggest the best next step.

Relentless Customer-First Culture.

Creating a culture that puts the customer first is crucial to significant change. It means infusing everyone’s job with a healthy dose of CX and rewarding behaviors that lead to outstanding customer accounts. For this to happen, effective changes are needed across – leaders, senior executives, and front-level teams.

Impact beyond surveys. 

Companies are used to measuring CX by looking in the rearview mirror. They use CX metrics from surveys done after the experience has happened. But survey results don’t always tell us what causes CX problems or how they affect business. And because the metrics come after the incident, there aren’t many real-time chances to change course. Therefore, the new measurement must track every real-time customer interaction with the company and third parties. To build this more complex system, incumbents must consider the rich insights from crucial customer journeys.

Conclusion.

For banks to turn their CX into high returns, a radical overhaul is needed for CX programs, supported by an operating model that puts customers at the center of their business. As with any significant change, it’s essential to start with a big picture and see how current CX capabilities compare. Once the gaps have been found, companies should plan for how to fill them.

Future success will come down to three things.

First, for a business to be resilient in the long run, it will need a more flexible and dynamic model. Second, we need to make it easy for customers to use their financial services, products, and plans by giving them simple digital tools and ways to get help. Third, we must never forget how important it is to combine technology with live care when a human touch is needed.

 

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