While it may be tempting to provide an infinite number of products, customizations, and information to the customers, the research shows that simplicity is almost always the best option for increasing both company value and customer loyalty. But what does it take to create a seamless and simple customer experience from start to finish? Let's talk about it in this article.
The customer journey is a series of interactions that begin when a customer perceives a necessity, such as resolving a service issue or purchasing a home, and continues until the need is met. It encompasses a variety of decision-making events that customers encounter when engaging with one or more financial institutions in person or online. Each interaction triggers a chain reaction behind the scenes that impact both the customer and employee experience. This chain of activity spans the operating model and bank processes, including operations that customers are not aware of, such as risk and compliance, technology, change management, and flexible delivery.
Customer journeys in the banking and financial sectors have been drastically altered by technology. To meet the ever-increasing customer expectations, banks must continuously curate unique journeys and propositions. Banks are increasingly required to deliver more contextual and personalized services, as well as a more digitalized customer experience.
Source: appinventiv.com
Consumers have traditionally selected financial institutions based on trust, reputation, and corporate size. The banking and financial sectors are not exempt from the technological evolution that has turned the focus on the significance of customer experience. Nowadays, providing an optimum customer experience is just as crucial as the conventional core factors influencing consumer purchases.
Related: Banking CEE Expo | 3-4 November | Prague
The COVID-19 pandemic has expedited the digital transformation of banks and financial institutions. The key reasons for this acceleration, according to the EY Future Consumer Index, are global lockdowns and an increase in stay-at-home orders. These are also the principal reasons why digital banking may evolve into a more permanent solution for groups of customers. According to the EY poll results, 40% of respondents stated that they would expand their use of internet banking over the next 24 months.
Banks must reconsider their digital transformation journeys in order to discover new possibilities for growth and generate greater benefits for their customers. The banking and financial sectors will face immense rivalry, and only the strongest will prevail. The strongest will be those who best harness this digital transformation process, put their customers first, and offer them an outstanding customer experience.
Omnichannel Approach in Customer Journey
Customers in 2022 are not only accustomed to buying online, but they do so efficiently through applications and mobile devices. The omnichannel strategy is becoming more popular in the financial and banking industries. This isn't just because banks are striving to be more innovative or reduce expenses. This is nothing more than addressing the most recent client expectations, as well as the frequent demand of today and the rapidly growing digitization. Banks that fail to provide clients with continuous and limitless access to services eventually lose loyal clients and reduce their capacity to attract new ones.
Offering an omnichannel customer experience is all about offering the same services and products to customers regardless of platform or channel.
Digitalization in the Banking Sector
As per Laura Vizir, the Chief Product Officer at TBI Bank Romania, 'the adoption of digitization is essential for the banking industry'. Banks will enhance their customer service by embracing digitalization. Customers can benefit from this since it reduces their time. Digitalization minimizes human mistakes and, therefore, improves customer loyalty.
Customers now have 24/7 access to banks thanks to online banking. Managing huge amounts of cash have also become easy. Customers have benefited from digitization as well, as it has made cashless transactions feasible. Customers no longer need to carry cash and can execute transactions at any time from any location.
Some examples of digital transformation in banking are blockchain technology, utilizing Artificial Intelligence (AI), Customer Data Collection, and Management & Analysis. The more digital services a bank provides, the more data it has. Banks can utilize this data to find possibilities, enhance offerings and services, and automate processes. They may, for instance, personalize key points all throughout the client experience. Furthermore, technology such as AI and Blockchain can make certain processes simpler and quicker for clients to complete. This, in turn, optimizes the consumer experience and increases customer loyalty.
Digitalization in the banking sector comes up with numerous advantages such as:
Better data-driven decisions. More digital offerings provide a clearer understanding of client demand, which can enhance decision-making and expand growth.
Better user experience. By tailoring the client experience based on collected data, financial institutions would be able to cater to the demands and needs of every user. This enhances client retention by encouraging loyalty.
More clients. The rise of Fintech and competition has drawn more people into the financial sector.
Processes are quicker and more efficient. The integration of AI and ML will automate operations, enhancing the value of the user experience.
Cost reduction. Banks will be able to decrease operational expenses by improving productivity through technology.
Challenges Related to Digitalization in CX
Preventing 24/7 Transactions
Despite rapid technological advancements, account-to-account payments still face issues. Paying bills or transferring money to friends and family should be as simple as a few simple clicks. Banks that fail to provide such convenience generate fiction for their consumers and thus are likely to lose their loyalty in the long term.
Failing to Implement Mobile-Friendly Digital Solutions
Customers who are always on the go prefer the convenience of mobile banking. They want to be able to verify balances, pay bills, deposit checks, budget, track expenses, and even apply for loans or mortgages without having to visit a physical bank.
Having a Portal and an App That Offer Diverging Digital CX
This brings us to the next issue, which is the lack of consistency in CX throughout the banking portal and the app. Bank websites are usually simple to integrate with multiple features, allowing users to execute a variety of duties. Apps, however, cannot fall behind as they are the preferred method of browsing banking services by customers.
Customers are 89% more likely to stay with a firm that offers a cohesive experience. As a result, irrespective of how your consumers engage with the company, a successful omnichannel strategy necessitates a uniform, highly intuitive digital user experience throughout all consumer touchpoints.
Using In-House Technology That Does Not Meet Security Standards
Customers in the banking industry seek all the advantages of digital transformation without sacrificing the security of their financial information. Unfortunately, numerous financial institutions remain reliant on antiquated technologies, limiting their capacity to optimize operational efficiency and data security. Using old technology while introducing new solutions results in constantly fragmented data architectures with weaker security credentials that can be readily attacked owing to a lack of real-time updates.
Not Adapting Interfaces to Suit All Audiences
Finally, effective CX promotes encounters that show how various consumer segments want to interact with the banking sector. Regardless of the customer's age or use case, digital experiences should include features of accessibility and intuitiveness. Finance-savvy customers may not require numerous explanations while conducting simple banking activities, but others would benefit immensely from modal pop-up windows with short instructions. Every IT choice, regardless of customer, must be centered on providing excellent CX.
As banks continue to implement their digital transformation plans or strategies, it is critical that new or upgraded services be tested before they are introduced.
To summarize, it is challenging to adapt and prosper in the digital age. But certainly, digitization of processes, products, and CX is mandatory in the financial sector. In order to be implemented properly, digital solutions and their usefulness must be carefully evaluated and tested before launching. They need to be implemented, tested, and re-evaluated when needed. Banks that effectively integrate these key technology trends can stay ahead of the competition and will be positioned well for whatever the future holds.
Related: Banking CEE Expo | 3-4 November | Prague
Resources:
Digitizing the Banking Experience, a keynote presentation by Laura Vizir at the CX CEE Summit on 23-24 June 2022
Delivering Value with Customer Journey, a keynote presentation by Maja Mikic at the CX CEE Summit on 23-24 June 2022
How to transform your legacy system from a reactive cost center to a proactive value generator? a panel discussion at the CX CEE Summit on 23-24 June 2022