Matt Phillips, VP, Sales & Systems, Diebold Nixdorf UK/I
We are in the age of ‘now’, with customer demands shaping the competitor landscape, as well as entire business systems.
This has never been more true than in the world of financial services – where net promoter scores stand for everything, where technology is advancing customer interactions at a rapid pace, and where physical touch points (especially those on the high street) are under increasing pressure to prove their worth.
The case for customer service
Against this backdrop, there is a strong case to show that high quality customer service can deliver real business value in the financial and payments sector – something that has already been proven multiple times, by multiple other industries. Indeed, across a broad range of sectors, 84% of organisations that improve their customer experience have also reported an increase in revenue.
In the financial services world, this point has been made clear by the challenger banks, such as app-based Monzo, Starling and Atom, which have recently shaken up the industry. The growth in popularity of these digital-only financial services, where customers can apply for mortgages and manage their current accounts directly from their smartphones, has often been put down to their ability to both offer a high-quality service to the always-on customer, and quickly bring new platforms and services to market.
In order to stay competitive, the more traditional financial services firms have needed to add value to their offerings, boost their customer experience and journeys for these ‘now’ consumers, yet still drive efficiencies. They have needed, in effect, to make customer service demonstrate ROI, and fast.
More than a challenge
Needless to say, this hasn’t been an easy task. Traditional financial services organisations have for a long time suffered from large, complex and inflexible infrastructures. These systems have been built up over many years, with layer upon layer of legacy platforms making it hard to drive agility and competitive differentiation. Indeed, Capgemini has recently found that many core banking systems were originally developed in the 1970s and 1980s, making most banking system solutions over 30 years old and counting.
This, understandably, makes the digitisation of services, such as online and mobile banking, extremely difficult.
Added to the challenge of legacy infrastructure is the fact that those within the financial services sector are under increasing pressure to implement engaging digital transformation strategies, often with limited resources. This puts not only budgets under strain, but also puts the teams required to transform the customer experience with new and innovative technologies under pressure – pushing some organisations to the limit, and leaving little time to manage day-to-day operations effectively.
Taking a holistic view… and winning back some customer service kudos
Where there is a desire to get customer service right, there is not always the agility or perceived resources to do so.
In many instances however, a mind-shift from treating customer services as a separate entity, to putting the customer at the heart of every operation, helps organisations to find a more practical way forward.
This is customer-centricity in its purest form. It involves more than just responding to what challenger banks are doing by copying their approach. It involves more than introducing new apps, more digital platforms, or new gimmicks. Instead, it involves using digital as a way of improving or evolving the customer journey – enhancing every touch point, where necessary and where it’s going to improve the customer experience.
This approach can make the overall customer journey more holistic. But to be successful, it must be underpinned by digital platforms which can build a picture of how a customer is banking, what platforms they are relying on at different points in the day or month, and what products they might need help with.
Evidence suggests traditional banks are starting to get customer-centricity right. For example, RiF Group has found that appetite for digital-only banking providers fell from 74% in the first half of last year to 63% in the second half, perhaps due to the bigger banks providing a service that’s less likely to make customers consider defecting to market challengers in the first place.
A practical way forward
The reality of putting the customer at the heart of every operation requires, as mentioned earlier, a mind-shift. But at a processes level, it also involves a change in how internal teams work, how different departments work together, and how different platforms communicate.
Making operational changes like this is no mean feat and there is a new industry trend of banks embracing service providers as a way of provisioning resource effectively, getting access to new skills quickly, or freeing up internal staff.
This so called ‘as-a-service’ phenomenon has been prevalent in other industries for decades. In the retail sector, for example, it’s a tried and tested model, with the British Retail Consortium recently finding that 70% of retailers are outsourcing an element of their operations, with warehousing and IT being the most likely functions to be outsourced. This helps them to reduce costs, and optimise how their businesses are run.
Indeed, the transformation from traditional resourcing, to an ‘as-a-service’ economy is well underway in the UK, with analysts expecting the XaaS market to grow 38% by 2020. For the financial sector there are clear benefits to be gained, if organisationsare able to boost operational efficiencies, and provide internal staff with the time they need to evolve their current customer service offering.
BankData in Denmark is just one example of a financial organisation that has already using an as-a-service model successfully. Rather than spend precious time managing its own huge ATM network, BankData has elected to work with a service provider to implement enhanced ATM monitoring tools, newly automated processes and services support across BankData’s entire self-service network of 11 Danish banks. This means that internal staff can instead focus on future-proofing the bank’s services, and placing customers at the heart of every new innovation.
Even some banking services start-ups are exploring as-a-service options to improve their growth performance. For example, mobile-based Coconut, which combines banking and accounting services so that freelancers can pay/ get their bills paid easier is partnering with a banking-as-a-service provider to run its back-end technology.
Ultimately, adding value to every touch point is crucial when it comes to putting customers first, and thus gaining ROI. It is encouraging to see more financial services firms find new ways to boost their offering, with many increasingly turning to service providers to do so.
Every platform needs to add something to the journey if a customer-centric strategy is to be successful, and the ‘as-a-service’ model holds the key to striking the right balance between making a customer-centric approach successful, and also efficient. Long live the ROI of customer service.