Helena Müller, VP Banking Europe, Diebold Nixdorf

As the world of financial services continues to change, are we reaching an inflection point where the balance between digital and humanised banking needs to be re-assessed? Architecting and creating value for the consumer has never been more important, but in the rush for progression there is a danger we have lost some crucial elements that define the customer experience. 

The recent evolution of financial services has been inherently digital, opening the door of possibilities for a whole realm of new experiences. But often this is accompanied with standardisation and a natural shift towards more homogenised banking. Has the shift gone too far and the ability to truly add value through consumer journeys been lost? Let’s discuss in more detail.

Does one size fit all?

The need to rationalise operations and achieve efficiencies has driven a laser focus on driving out costs for many financial institutions in recent years. With the COVID-19 pandemic, economic instability and changing consumer behaviours all accelerating trends that were already in flight, the opportunity to standardise some elements of banking has enabled cost savings to be achieved.   

From a back-end process point of view this has been hugely beneficial and is allowing a realignment of operations in line with the need for a more efficient and adaptable business model. However, does a more standardised approach to banking mean a less personalised experience for the consumer? 

The answer lies in getting the right balance. There is no doubt that digital banking and new technologies have been a game changing enabler for banking services and have provided new levels of convenience for the consumer. The danger comes with too much automation and not enough emotion, and it is vital that the ‘human’ factor of banking does not disappear. 

Emotional banking draws out the differentiators across the banking value chain. With an increasingly competitive landscape, as well as non-traditional players moving into the financial services space, creating a more connected and contextualised experience for the consumer is often the only way to stay ahead of the game. 

The importance of being local

The way people bank has undoubtedly changed but what hasn’t changed is the need for financial service providers to maintain a local brand presence. The need to restore emotional dialogues with customers has never been more important if the industry wants to maintain trust and long-term loyalty. 

Looking at the unique characteristics for customers in a particular market and assessing how they can be served most effectively should be a fundamental part of building meaningful customer journeys and transactions. 

This does not necessarily mean the format of service delivery has to remain the same, and there are many opportunities to embrace innovation to maintain these local connections. For example, if a full branch is no longer financially viable for a bank to maintain, creating a smaller local hub or ‘branch in a box’ concept can ensure that services remain available, and customers still have access to personal advice and information through customer service representatives when needed. 

Ensuring services are tailored to local requirements can also create competitive advantage. The industry has undergone lots of incremental changes over the past few years but what’s the next stage of differentiation? Most banks offer digital services of some form, but how they are delivered can be very important and this also plays an integral part of socially responsible banking. 

The role of personalisation

As well as providing consumer choice and convenience when it comes to banking services, being relevant shifts interactions from transactional to mutual, personal relationships.  The ability to offer a personalised experience, whether in person or digitally, goes a long way in maintaining customer satisfaction and loyalty. For example, a customer service advisor offering to help complete a recent online application the customer started or displaying a customised screen at an ATM based on most frequent transactions. These are also examples of where digital capabilities can support a more integrated journey, using innovation as the platform for an augmented, end-user experience. 

Establishing a proactive approach rather than being reactive builds this foundation for more personalised services; working hard to really understand what the customer wants and delivering services in the way they want to consume it. 

This often requires going back to basics for financial institutions and challenging the status quo. Reassessing current customer journeys can be time consuming, but it is vital if services are truly going to be aligned to consumer needs. A re-bundling of services may be necessary to match the consumer needs of today (and tomorrow) with the streamlined business models many financial service organisations are moving towards. 

Therefore, taking the time to bring customer journeys right up to current day relevancy provides a two-fold opportunity. Firstly, to truly match consumer’s needs, and secondly, to create operational efficiencies along the way. 

Maintaining the power of trust

Many financial institutions still hold a level of trust that is not found within other industries. As consumers put faith in providers to look after their money and support their financial lives, maintaining this trust builds the backbone for long-term loyalty. Therefore, maintaining authentic relationships outside of the standard transactions that have been digitised is necessary for deeper customer relationships, helping to restore emotional and meaningful dialogues.  

This is exactly where personalised, localised, and emotional banking plays a fundamental role. If the shift towards standardised ‘one size fits all’ banking goes too far, it is highly likely the element of trust will begin to diminish. 

To conclude, standardising some elements of banking is crucial for financial institutions to maintain viable business models for the future, but the recipe for growth and success comes with balance. By embracing the power of innovation and avoiding commoditisation, it is possible to deliver efficient and effective digital services along with a human touch.