By Priya Iyer, Chairman, and CEO, Vee24
Even before the COVID-19 pandemic made personal and business banking from home essential, the number of online banking users had been steadily rising. Eight in every 10 consumers prefer banking digitally versus visiting a physical branch and, in 2019, the number of digital banking users was forecast to surpass 161 million in the United States. As the pandemic continues to disrupt the business world, many organizations have adapted operational models to optimize customer relationships and manage customer service resources more efficiently. Even online, customers are demanding the ability to get answers to their basic questions 24/7 and to engage with live agents quickly if they need assistance during normal business hours. Savvy financial institutions have been improving their digital engagement strategy, knowing many recent changes will be long term, if not permanent, as economies change what it means to be “open for business.”
Many banks that have seen success during this time have fully embraced live engagement solutions, making traditionally in-branch transactions readily available remotely, to better assist online customers and allowing them to get ahead of the competition and build stronger brand loyalty. Two things remain critically important: Customer engagement solutions need to provide the highest levels of security, regulatory compliance and continuity of service as these are now true enterprise solutions for financial institutions and they must be flexible enough to implement and optimize quickly to continuously enhance online customer journeys.
Live engagement solutions range from AI-driven, deep learning chatbots that provide 24/7 service to video chat, co-browsing, and co-form fill solutions that offer a more personalized banking experience across multiple channels and devices. Now more than ever, it’s critical that websites and mobile apps engage current and potential customers to provide convenient, accessible banking anywhere, anytime, and on any device.
This article highlights the full range of options that, used together, can raise the level of online customer experience to new heights.
Live Engagement Strategies for Online Banking Begin with Chatbots
With the vast majority of American banking customers using some form of online services, certain interactions are commonplace. Even people who prefer a teller to an ATM will commonly go to a financial institution’s website to check balances and pay bills. A significant number of customers go further, using a mobile app to do the same routine tasks as well as deposit checks. For these simple tasks as well as more complex use cases, both savvy and novice users sometimes need assistance. A customer engagement strategy begins with chatbots.
Chatbots can elevate the customer experience and prevent disconnects while banking online. Artificial intelligence (AI) and deep learning integrated with knowledge repositories married with curated customer journeys elevate chatbot effectiveness, enabling these automated assistants to understand customer intent to address their needs. They can also provide seamless service moving a visitor from the chatbot to a live agent when appropriate. Other examples of elevated customer journeys with chatbots are:
- Directing a customer to a page they can’t find, such as where canceled checks are located
- Answering questions about how to apply for a mortgage or car loan
- Qualifying customers and setting up a video chat with a live advisor at the bank
- Processing a payment
Chatbots are quickly moving beyond facilitating the customer’s online experience, increasingly having a larger, more direct impact on business’ revenue. Brands with a superior customer experience bring in 5.7 times more revenue on average than competitors and 72 percent of consumers say a disconnected experience would make them take their business to a different brand.
While mobile and online banking is preferred by many customers, some are still hesitant to use it for a variety of reasons. By offering more robust, personal online services such as live video chat with screen sharing and co-browsing, banks can enhance customer service exponentially with real-time, efficient, and meaningful interactions with customers.
Next-Level Live Engagement Technologies Provide a Richer Customer Experience
A pre-pandemic survey showed that more consumers feel that a brick-and-mortar bank branch is no longer necessary versus those that think it still has value – for example when seeking financial planning advice or opening new accounts. Post COVID, consumer preference has only tipped further towards digital. The in-person banking experience has dramatically changed as branches have remained closed since earlier this year. Live engagement solutions including video chat, co-browsing, and co-form fill bring the face to face, in-brand experience online, easing anxious customers and allowing them to connect securely with a real banker for a richer assisted experience.
Live Video Chat Assistance
A live engagement platform offers one-to-one video chat support so that customers can feel secure handling their finances through a conversation. Video chat replicates an in- branch visit by allowing eye contact between customer and agent, while providing reassurance in a private conversation. During a live conversation, a representative can easily add in a banking product expert or the other joint account holder to the call within seconds, through multi-party engagements. If additional support is needed, the representative can also schedule appointments at a later time that is convenient to the customer.
Co-Browsing, Screen Sharing, and Co-Form Fill with Customers
From applying for a mortgage or applying for a business loan, customers inevitably have questions and need help navigating to appropriate pages and completing applicable forms. In the past, the only way to help customers with any major financial process was in person, as guiding customers over the phone left too much room for error. By using screen sharing technologies such as co-browsing and co-form fill, banks greatly reduce the margin of error in a financial process. By digitally filling out forms together, errors are identified and corrected instantaneously. And, secure co-browsing means that the customers private information is hidden even from the agent. Guiding customers digitally deepens a bank’s relationship with them, makes the process of filling out forms painless and secure, and helps financial services companies reduce risk, sales cycle time and drive revenue.
In addition to improving the quality of online customer support with more meaningful and personalized interactions, financial institutions are implementing online banking that is accessible across all channels, from any device, at any time. Chat platforms enable customers to reach a bank representative with just a click of a button – from any browser, on any device, and with no download required. A customer can receive support on their phone from any location and speak to their financial advisor from a laptop. Providing customers with this flexibility is a critical banking component as more of life is conducted remotely.
Digital Support and Sales via Chatbots and Live Engagement Will Keep Banks Thriving
Online and mobile banking technology will continue to improve over time with AI driving automation and omnichannel access. Financial institutions that advance their customer experience will be the most successful and will thrive as banking industry rapidly changes and consumers demand comprehensive remote solutions.
With over 25 years of diverse international experience in nearly every facet of software, Priya is a proven, high-growth entrepreneurial CEO with a leadership philosophy centered on engaging clients and employees to build industry leading SaaS software platforms and delivering exceptional customer and stakeholder value to achieve sustainable competitive differentiation.
Open Banking: the perfect pandemic tool – Equifax comments
With COVID-19 related financial fallout set to dominate the credit landscape in 2021, Dan Weaver, Open Banking Expert at Equifax UK, believes Open Banking solutions can provide lenders clarity in a sea of uncertainty:
“With lockdown once again in place across the UK, it’s clear 2021 will be a year of extreme financial flux. While the vaccine roll-out programme will provide an economic boost and eventual easing of restrictions, forbearance measures, such as mortgage holidays and the government furlough scheme, will be wound down. This will lead to income shocks for many, and the potential for a nationwide surge in personal debt.
“With the third anniversary of its implementation today (13 January), Open Banking is entering a new mature phase of its development. The initiative’s credentials are now widely established, offering creditors the perfect pandemic tool to assess the most accurate picture of an individual’s finances.
“Consider someone who has just returned to the workforce after being made redundant or placed on furlough. Traditional credit bureau or legacy data alone would not always provide potential lenders with the most up-to-date information on their current financial circumstances and ability to repay credit at the point of application. Open Banking platforms, through customer consent, pull live data directly from the user’s bank account, allowing creditors to make an informed, responsible and fair decision about their current affordability on the most recent data available – a game-changing factor amid such widespread financial upheaval and rapid change in people’s circumstances.
“Open Banking is a tool for our times and it’s vital more credit providers, not just big banks and finance but utilities, insurance, auto and telcos companies, accelerate its adoption. Throughout our society and economy in the past year, we’ve witnessed feats of great innovation, executed at rapid speed. In 2021, we need to apply this transformational energy to the Open Banking landscape, slashing the time it takes for creditors to test protocol and fully set up their solutions.
“Three years after its arrival, we’re seeing Open Banking platforms improve digital, real-time income verification rates by more than 25% * – which is no mean feat. If an industry-wide, mass acceleration strategy was successfully achieved in 2021, it would prove extremely valuable and timely, and lead to better customer and creditor outcomes throughout the credit space.”
Over a quarter of Brits now have an account with a digital-only bank
The number of Brits with a digital-only bank account has gone up by a percentage increase of 16%
Almost 1 in 6 Brits (17%) plan to open a digital bank account over the next 5 years
The top reason for opening an account was the convenience of banking online for the third year running
However, 16% of traditional banking customers who aren’t planning to switch said their bank had been helpful during the COVID pandemic
Currently over a quarter of Brits (27%) say they have at least one bank account with a digital-only bank, according to personal finance comparison site finder.com.
This is a percentage increase of 16% from last year when 23% of Brits said they had an account with a digital bank. It is also over 3 times the amount of Brits who had one in January 2019 (9%).
Finder’s 2019 research found that 24% of Brits intended to have a digital-only account by 2024. However with 27% now having an account, Brits have gone digital 3 years earlier than expected.
A further 17% of Brits intend to join them over the next 5 years, with 11% planning to do so over the next year. This could mean that 44% of Brits could have an account with a digital bank by 2026. If this percentage were applied to the UK adult population, it would equal almost 23 million people.
The top reason for opening an account continues to be convenience that digital-only banks provide, for the third year running (26%). The second most common reason was that users needed an additional account and setting up a digital account seemed to be the easiest option (20%). Customers also wanted to transfer money more easily (19%), making this the third biggest priority.
People wanting a trendy card is still driving signups as well, with 1 in 10 (10%) existing, or future, customers citing this as a reason to get an account.
Despite the increase in digital-only banking customers, the numbers who aren’t considering one have actually risen. Last year, 23% of respondents said they aren’t considering a digital-only bank account, but this has risen substantially to 42% in the latest survey.
This is likely a result of increased customer loyalty, 58% of those without a digital bank account said they felt as though their incumbent bank had treated them well and therefore had no desire to open a digital bank account. Additionally, 16% felt as though their incumbent bank had performed particularly well during the pandemic.
Over a third (36%) of those without a digital bank account said they had not decided to bank with digital providers because they preferred to be able to speak to someone in branch.
Digital banks are still most popular with younger generations, 46% of gen Z say they currently have a digital bank account, with a further 28% intending to get one over the next 5 years. This would mean that by 2026 just under three quarters of gen Z (73%) could have a digital bank account.
To see the research in full visit: https://www.finder.com/uk/digital-banking-adoption
Commenting on the findings, Matt Boyle, banking specialist at finder.com said:
“This research shows that digital-only banks are here to stay, with the number of users in the UK rising for 3 years straight. On top of this, Starling and Revolut announced this year that they have made a profit for the first time, really demonstrating that digital banks are starting to become a serious part of the banking furniture.
“The pandemic has also played a role in the rapid digitalisation of the banking industry, with those who had never experienced online banking having no other choice but to take their finances online. It seems that Brits are starting to realise the convenience that can come with digital banking and this is reflected in our research.”
Finder commissioned Censuswide on 6 to 8 January 2021 to carry out a nationally representative survey of adults aged 18+. A total of 1,671 people were questioned throughout Great Britain, with representative quotas for gender, age and region
The Impact of the Digital Economy on the Banking and Payments Sector
By Gerhard Oosthuizen, CTO Entersekt.
New banking regulations, digital consumers, the eradication of passwords, contactless technology – these are just some of the trends that will shape financial services and payments in 2021, writes Entersekt CTO, Gerhard Oosthuizen.
Since the outbreak of COVID-19, traditional businesses have been compelled to further undergo the digital transformation to meet the needs of a consumer base largely confined to their homes. Indeed, we estimate that there has been a 30% growth in the digital space. With this acceleration towards a digital world, banking, transacting and payment trends have and will continue to be redefined into 2021.
We have witnessed a rising number of digital first timers. That is, people signing up for online banking and e-commerce, whilst progressively shifting away from traditional channels. Businesses that have previously depended on walk-in stores and having a physical presence have also had to recognise that online transactions are now the new norm, and to adjust accordingly.
Whereas in the past, registering a customer for a service could take place in a shop, a booth or a branch, today it has become more important than ever to have a remote digital registration option available as well. Even working behaviour has changed considerably, with many businesses accommodating for remote working in the long term.
This is what sets the scene for 2021 – people expect to work from home as well as carry out their transactions from home.
Banking and Payment Trends in 2021
The use of contactless technology is undeniably growing, but on top of more people tapping with their cards, we are also seeing much more engagement with QR payments. A technology already frequently employed in Asia, we know QR codes can work. It would enable consumers to authenticate themselves when making a transaction without needing a PIN pad. More importantly, it allows consumers to gain complete control of their transactions from their own device and have an overall richer experience. Recognising this, we anticipate noteworthy developments in QR and NFC-enabled tap and go payments over the next year.
In light of FIDO (Fast Identity Online) and the ever-expanding network of FIDO-compliant solutions, we also expect the emergence of entirely passwordless systems. Organisations will likely begin enlisting customers by way of biometric authentication through devices and digital identities that already exist, such as banking apps. Long gone will be the days of having to remember numerous passwords, only to forget and reset them again. That is the idea anyway.
In 2021, there will probably be a pronounced adoption of delegated authentication as well, whereby
merchants as opposed to traditional issuing banks will take the reins of authenticating e-commerce payments. In this way, consumers will be offered a greatly improved online shopping experience with a simple and intuitive checkout that acts as an extension of the retail brand.
The Challenge of PSD2
While each of these transitions will undoubtedly introduce growing pains, PSD2 will be among the most challenging. Europe is already going through PSD2 now, implementing a number of regulations that is opening up competition in banking and electronic payment services. However, on the 1st of January 2021, these regulations will take a legal effect. At the end of the first quarter, so too will another set of regulations concerning 3-D authentication of card-not-present payments. Europe is simply not prepared to make this leap into “open banking”. As such, banks will face a tough year of struggles with regulators and competition from non-traditional quarters.
In fact, the process towards becoming PSD2-compliant is often arduous for banks and recoups hardly any additional revenue. Many banks see it as a competitive disadvantage as they are being forced to open up their systems and processes for the likes of Google, Facebook, Apple and many smaller niche fintech operations. Their valuable client data risks being taken by a challenger and used to on-board their accountholders.
Regardless of the commercial opportunities that open banking may provide, fraudsters will also endeavour to take advantage of this change and the weaknesses that will appear as systems open. With money moving faster, the faster it can be stolen too. We will likely see some reaction to this in 2021 as fraud returns to being a top priority for banks. Yet, whether through regulatory pressure or by market forces, open banking will become the new normal – and the world needs to prepare for this. Hopefully, many lessons will be learned from Europe’s experiences in 2021.
Next year is going to be about change – and managing that change without alienating already unsettled consumers. Organisations that have customer experience top of mind will emerge as winners, but they must nonetheless expect additional pressure from regulators, new competition, ever more digitally-demanding consumers, and no slowdown in technological innovation.
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