By Matt West, CMO AT FEEFO
Amid all the street-noise about an “Open Banking” revolution in the UK, there is one group of people who need to be listened to far more effectively – the customers.
The industry stands on the brink of significant change as it addresses the Competition and Markets Authority’s (CMA) Open Banking recommendations. These have been drawn up to inject more competition, to increase the use of advanced technology and to generate far greater transparency about services and quality standards for the benefit of customers.
While banks will have to increase competition and make it easier to “ditch and switch” by opening up their systems to user-friendly third party apps, it is not clear how the customer’s voice will be heard. The CMA says it want banks to publish “trustworthy and objective information on quality of service on their websites and branches”. It adds: “Whether a personal customer or small business is willing to recommend their bank to friends, family and colleagues will be a core measure.”
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This emphasis on quality measures should impel banks to begin listening to customers far more closely at what is a time of great upheaval. Reduced revenues in the continuing aftermath of the credit crisis have combined with the arrival of the agile Fintech companies to put even greater pressure on the established names and institutions. As banks advance towards implementation of the CMA recommendations next year, it becomes more imperative than ever that they use technology to listen to their customers far more effectively. They need to ensure technologically advanced customer review systems are designed into the new banking biosphere.
Not only will platforms using honest, authenticated reviews demonstrate that the bank is being transparent by providing consumers with more information on which to base their decisions, they will also provide a wealth of insight for the bank.
Unfortunately, listening to customers is not something the banking sector has been good at. Low rates of current account switching between banks have led to complacency. For more than a decade now, banks have had access to a wealth of valuable data derived from multiple digital channels and interactions, but it has hardly led to a revolution in engagement or insight, even though nobody knows more about you than your bank(except your partner, perhaps).
It has been easy for banks facing the costs of Open Banking to regard customer feedback as a side-issue or a fluffy add-on. The reality however, is that verified and authentic consumer reviews will provide just the kind of “trustworthy and objective information” that banks need in this new era.
Reviews can be authenticated by third-party providers on an invitation-only basis so that only those who are genuine bank customers contribute. While staff may object that they are already aware that their employers are not the best-loved institutions on the planet, this is to miss one vital point about verified reviews – they provide extremely valuable insight even from negative contributions. Using artificial intelligence, it is possible for providers to comb through thousands of reviews to deliver succinct and subtle analyses of what pleases customers and what precisely leads to dissatisfaction or criticism. The crowd-sourced input of thousands of consumers becomes an important well-spring of insight as well as a means of demonstrating compliance with the requirements of Open Banking.
These are significant advantages for all engaged in retail banking in the new landscape, whether established institutions, challenger banks or fintechs. The new reality will be that when customers can access multiple banks from a single app on their phones, as the CMA requires, the likelihood of switching allegiance can only be greater. This makes reviews an ever-more important tool for attracting and retaining customers, flagging up what is going right or how to fix what is going wrong.
There is one other significant factor to consider. As the generations who grew up with digital devices predominate, the role of social media as a forum for airing grievances is only likely to grow. This is a forum over which no bank or fintech has any control. How much better it is if the banks give their customers a platform on which they can share their reviews. It is not a question of control so much as common sense.
It is a fact that many consumers want to share their good and bad experiences of products and services and if they not able to in a forum provided by the company, then they will go on social media. This not only has the potential to get out of hand, with a business’s reputation barbecued by multiple contributors, it also means the company misses out on all the insights. Are the complaints actually more about the banking app itself than the speed or quality of the payment system or loan approval, for instance? Artificial intelligence solutions will find out.
If a financial institution, however lean and lightweight, can provide a review platform for its consumers in which they leave their comments and it responds, perhaps with the aid of some degree of automation, then the advantages become obvious. Consumers will contribute if they are responded to (if only with a thank-you for a positive review) and if they know that all the other contributors are genuine. That level of trust can only come from knowing that are putable third-party organisation has verified that all contributors are customers. It is also important for customers to feel valued and to know that what they contribute is read or heard.
Running scared of bad reviews is no reason for avoiding this important development. Authenticated reviews need to be built into the banking revolution to ensure the customer is heard and the banks are listening in real time.
The question for banks is do they want to be seen doing only the bare minimum to meet the requirements of Open Banking or do they want to demonstrate their commitment to transparency?If they adopt a more forward-looking approach to reviews they will radically improve their access to insight about their operations from the people who matter most – the customers.