By Stuart Templeton, Head of UK at Slack
London’s long and proud history as the beating heart of global financial markets has been established over centuries. Despite fierce competition and concerns of a ‘Brexit bite’, the UK remains the world’s leading center for foreign exchange trading and the number one location for cross-border bank lending.
However, over the past five years, the rise of the UK’s fintech scene has had a profound effect on financial institutions. New digital enterprises have spearheaded innovation, successfully digitising banking, peer-to-peer finance and currency transfers. Born with technology baked in, fintechs and challenger banks are able to anticipate shifting markets and provide next-generation customer experiences. Put simply, fintech has disrupted the way forward-thinking consumers bank.
Incumbents in the banking sector are working hard to improve their customer experience and to adapt to emerging technologies and trends by digitizing their services, product and processes. However, ensuring viability in a market that is rapidly changing is still a major challenge. So what can traditional financial institutions learn from London’s new wave of fintech disruptors?
New ways of working with customers
While traditional banks are working hard to overcome the upheaval of processes and navigation of red tape, due to years of regulatory compliance, challenger banks have a head-start in focusing on using innovation to provide excellent customer service. Online-only fintechs – such as Monzo and Starling Bank – remove communication friction by leveraging instant messaging and social media to keep customers in the loop, in real-time.
London-based Monzo gained its banking licence back in April 2017 and now has over two million customers in the UK. Accounts are managed through an app, and customers are invited to help shape the brand’s future. Each quarter, Monzo publishes its product roadmap online, allowing users to vote on what features and functionality should be implemented first.
Rather than wait for customers to query outages or technological faults before revealing the state of play, Monzo prides itself on proactively communicating any issues via its Twitter account. While traditional banks are wary of this ‘radical transparency’ approach, it has the effect of turning standard customers into brand advocates – generating word-of-mouth awareness without significant marketing spend.
As a majority, traditional banks such as Lloyds and Halifax are ramping-up their digital armies and have now built apps for their customers to ease communication with a generation of customers who live on their smartphones. This is a good thing, but internally it requires banks to have the processes in place to problem solve with agility and bring relevant cross functional teams together, to ensure consumers are supported quickly. Monzo has gone a step further, giving customers a voice and allowing them to participate in the brand’s culture. Like many of London’s fintechs, Monzo proves that the ‘human touch’ needn’t look like a cashier behind a counter.
Increased virtual collaboration
The rising popularity of remote work makes virtual collaboration easier and more effective than ever before. Today’s digital natives – those who have grown up in the digital age – simply don’t feel they need to be in the office or at their desk to get the job done. In fact, a recent study reports that full-time remote workers are 22% happier in their role than those who never work remotely. 79% said they felt more productive, while 91% said they had a better work-life balance.
While incumbent banks are still coming to terms with changing workplace expectations, fintechs have embraced remote work as a ‘win-win’ opportunity. Companies get the top talent available while saving on various costs; employees can work when and where they want, eliminating the costs and challenges of commuting.
For fintechs, attracting the best talent by providing them with the tools to collaborate virtually is critical to success. As ‘analogue’ financial brands make the transition to digital, they will need to reconsider their policies to capture and retain highly specialized fintech professionals who desire the flexibility to work how and when they feel most productive.
The emergence of workplace tools that enable communication and collaboration – such as Slack, Google Drive, Dropbox, etc – have made it easy to be a productive, integrated team member from outside the office. With remote becoming the norm, traditional financial businesses stand to benefit by breaking down hierarchical internal structures and empowering teams with collaborative work software.
Leveraging tools to be more agile
For the most part, bank-customer interactions take place on a combination of digital tools. Mobile apps, voice assistants, chatbots and email are now the go-to way to communicate for many people’s day-to-day financial needs. But while the deployment of advanced, AI-augmented technology makes for an engaging and efficient customer experience, the risk of outages, software faults and malicious attacks looms large.
This presents a significant challenge for online-only fintechs whose customers rely on software to access their accounts and spend their finances. Round-the-clock management requires continuous collaboration and efficient cross-functional teamwork. And for teams tasked with resolving these technical issues, speed is of the essence.
Email is the default coordinating point for communications and information, but inside a company it works poorly. Email chains slow down problem-solving since they tend to create siloed conversations and blindspots, meaning less coordination. To proactively support customers experiencing faults, cutting-edge fintechs need to ensure teams are interconnected, in real-time.
As the bank’s central collaboration hub, Slack helps every employee connect with their teams in channels and coordinate efforts around the various projects they’re working on. The #OutagesDiscussion is a dedicated Slack channel created by Monzo to serve as the central hub for all communications around an outage, be that updates from the engineers on the source, status and expected resolution time of the incident, or pulling together a push notification explaining the situation to customers.
Accenture estimates that competition from digital players could erode as much as one-third of traditional retail bank revenues by 2020. As customer expectations continue to change quickly, especially around the end-user experience, few consumers select a bank based on proximity to branch or interest rate. Instead, today’s consumers – particularly those who live on their phone – want the same personalized, on-demand experiences they have with brands like Netflix, Uber and Amazon. In the age of disruption and customer centricity, traditional financial institutions will need to future-proof by following fintech’s lead.