Richard Broadbent, managing director of banking, UK&I at Wincor Nixdorf

Digital technologies are rapidly, and fundamentally, changing the way financial organisations and their customers think about customer service. We only have to look at how customer experience has changed in almost every sector over the last few years to see the extent to which technology has been the driving force in that evolution.

These changes are driven partly by the rapid emergence of the ‘we want it now’ consumer. Technology is also exclusively responsible for changing expectations around the availability of services which has created a new and sometimes obsessive consumer relationship with technology. Customers increasingly expect a personalised experience, demand it in a shorter timeframe than before and want it delivered through their channel of choice.

Dr. Larry Rosen Professor Emeritus of Psychology, has discussed the possibility of this new consumer relationship with technology as being an ‘addiction’. He says that, “Addiction means that you are trying to get your brain to release neurotransmitters that we have learned signal a pleasurable experience… When we are addicted to [technology] we strive for the pleasure it brings.” Exploring this idea further, it’s possible to see why customers are starting to draw direct links between a positive customer service and the technology that they use in the process.

A recent report  has also identified how consumer demands and behaviour are changing in line with societal trends driven by the digital revolution. The findings highlighted how customers are more informed but less loyal and tolerant, emphasising that consumers no longer simply make comparisons with competitors in the same sector but now make direct comparisons across all sectors.

Digital transformation

It’s no secret that the retail banking sector is currently going through one of the biggest periods of change in history, and technology is playing a pivotal role in this journey. Only last month, the industry has been debating the introduction of ‘open banking’ for all customers, to be fuelled by third party technologies and data sharing.

Advances in technology are changing everything – especially the way customers complete their banking journeys. In the age of the empowered customer, financial institutions can no longer count on traditional channels and journeys to structure their customer interactions.

As a result, financial institutions across the world are rolling out a broad array of initiatives that place bold bets on new digital technologies, which they expect will fundamentally change how they attract and retain customers. They are investing in biometrics, facial recognition technologies – such as Alibaba’s recently announced ‘smile to pay’ function, and even branch service automation – such as the robots designed for Japan’s Bank of Tokyo Mitsubishi UFJ.

Playing catch-up

Experience shows that those companies which fail to adapt quickly enough to industry wide-shifts, tend to lose out to those who use ongoing technological transformation to redefine and enrich the customer experience. Unfortunately there are a myriad of examples out there, but companies such as Kodak and Blockbuster, who were slow to step up to the digital challenge, were eventually overcome by innovative newcomers in faster, lower-cost digital imaging and online video streaming.

In comparison to other sectors, innovation within the financial services industry has been somewhat restrained. One criticism levelled at the banking sector is that they simply weren’t ready for the digital revolution due to their traditionally unchallenged position within the market. Certainly you can argue that as a retail concept, the branch hasn’t kept pace with changes in the digital age. Until recently, the design of the typical UK bank branch hasn’t altered that much for over 100 years and many changes which have taken place were as a result of consumer demand, rather than through banking innovation.

Empowering the digital customer

So how can the financial services industry keep up with today’s constantly changing technology landscape and strengthen customer relationships?

Most banks have invested heavily in apps for smartphones and tablets which make it easy for customers to conduct a wide range of banking activities while on the go. In addition banks are looking beyond the pure customer touch point and tackling the much bigger issues of infrastructure, platforms and business processes.

As part of this broader bank transformation, most high street banks are in the process of evaluating their in-branch offerings, removing traditional banking barriers and utilising technology to provide user-friendly services which align more closely to their digital offerings.  Technology can be used as a key enabler to transform customer, staff and cash journeys. Not only can routine tasks be automated to provide a speedy service for customers but technology can deliver personalised services for each individual, displaying tailored offers which match products and services to specific customers.

Intelligent technology not only enhances the overall banking experience, but can also deliver process, time and cost efficiencies – helping financial institutions to become more agile in a time where adaptability is crucial. However with customer service key, organisations need to embed innovation and intelligent technology into the heart of the organisation, rather than skirting on the edge of technological advancements.

Looking further ahead, the use of artificial intelligence (AI) is on the horizon. RBS, for example, has trialled its “Luvo” AI customer service assistance to interact with staff and potentially serve customers in the future.AI could also have a big impact on back-end operations. Indeed, a study by Deloitte went as far as saying that “automation using artificial intelligence might be the next game changer in terms of process efficiency in the financial industry.” It stated that “autonomics is particularly useful in back-office centres performing high volume, rules based work.”

Strengthening customer relationships

Banks need to focus their strategies on remaining relevant and building engagement with the customer. While many financial institutions are looking beyond physical branches to connect with empowered customers, the truth is that most customers want it all: mobile, online, call centre, in-person and everything in between.

In the drive to deliver an integrated online and offline digital bank, there’s a balance which organisations need to strike between technologies which streamline business processes and deliver cost efficiencies and those which improve the customer experience.

The urgent task for financial institutions is to try to understand what truly matters to their customers and deliver the experience people are looking for. Utilising technology to help deliver effective customer journeys and experiences will be vital for success in today’s digital age.