These days, a bank’s core software and databases connect to a myriad of channels, including ATMs and internet/SMS-based banking, where they are accessed by millions of computers and mobile devices. Online tools further bridge the gap between banks and customers while providing solutions for critical pain points. But for traditional banks, technology is a mixed blessing.
A simple Google search instantly provides today’s banking customer with an endless list of banks eager to win their business. Users of social media are literally inundated with advertising from fintech startups, agile banks, and organizations that make digital experience a priority. The end result is customers have many banking choices—not one or two local options—and few restrictions on how to manage their money. Banks no longer compete only with each other, they also compete with alternative lenders, payment processors, fintech startups, and online companies, all of which are rapidly scooping up traditional bank customers.
The digital disruption in banking speaks directly to several industry issues:
The success of the banking industry relies entirely on customer trust. We assume financial institutions are responsible enough to be entrusted with our money. We trust them to behave in strict accordance with their own guidelines and we hope they care enough about their customers to take seriously the job of safeguarding their investments and life savings.
However, the antiquated nature of typical internal banking software suggests an industry that does not evolve with the times. Consumer-facing banking software is confusing at best, often completely inscrutable. More significantly, despite the fact that over 25% of all Bank of America deposits are conducted via smartphones, retail branches are losing direct interaction with this “mobile generation,” elevating significantly the cost of providing consumer banking products and services.
Millennials reject brick-and-mortar banking. They've abandoned the relationship-based retail branch experience in favor of online banking. They distrust traditional banks, in part due to established fintech organizations (e.g. Square, PayPal) opening the door for a rash of disruptive blockchain newcomers. Fintech funding is surging overall, with start-ups raising a record $24.6 billion through the third quarter of 2019, according to CB Insights, surpassing 2017’s annual total.
Now is the time to modernize your software and services before Google, Apple, and Amazon (or even Bitcoin and Ethereum) disrupt the industry. Indeed, a significant percentage of young consumers “would be open to banking with technology players such as Google, Amazon and Apple if the companies offered such services. Among consumers ages 18 to 34, 40 percent said they would consider banking with Google, 37 percent would consider banking with Amazon, and 34 percent would consider banking with Apple…overall 72 percent of consumers age 18 to 34 would be ‘likely’ or ‘very likely’ to bank with at least one technology, telecommunications, retail, or shipping/postal company that they do business with if they offered banking services,” according to an Accenture survey.
But the end of the retail branch doesn’t have to be an inevitability; nor does this signify the end of personal relationships with your customer. The costs, and your customers’ experience, can all be efficiently managed with an omni-channel digital strategy.
With millions of users across thousands of branches, the maintenance and management of Core Banking Software represents a major investment even for the smallest retail bank—often the largest cost of running the bank. This figure is compounded by the countless mobile users who each utilize several versions of your consumer software. Because mobile technology entails considerably more failure-points than typical enterprise web applications. To face these complex challenges, Anexinet offers proactive Tier 2 and 3 Service Desk and Support, enhancement tracking, and prioritization—along with in-app feedback management and bug triage tiered for increased efficiency.
Software—and how we interact with it—has changed radically over the last five years alone. But our most trusted banking institutions have been doing business for over a century (e.g. Wells Fargo was founded in 1852). As a result, most banks are locked into legacy technology, hampering IT performance and impacting the user experience. Having developed their enterprise software over the past few decades, the vast majority of banks now find themselves plagued with piecemeal legacy software that requires several workarounds to get anything done. Take a look at how Anexinet’s core software upgrades paid dividends for Customers Bank, then reach out to Anexinet to redesign and rebuild your own core software to be in-keeping with current best practices.
Traditional systems can't always distinguish between personal financial files and non-sensitive data. And in-house IT teams may not have the experience required to build and implement a tiered information-management system. Further, older systems can’t handle most modern security requirements, and the lack of security-prioritization endemic to the IoT ecosystem only creates more unnecessary headaches for the banking industry.
Finally, these problems are compounded by the fact that attackers worldwide are targeting banking systems more than ever. Phishing is high on the list of security issues, followed closely by compromised emails and ransomware attacks.
Banks are under intense pressure to differentiate themselves and provide a valuable, customer-centric experience. But this is a specialized area for any IT team, and institutions lacking specific expertise will likely struggle to achieve it. Don’t let organizational structure and process dictate customer experience. Craft digital experiences and internal processes that align with the customer journey from the customer’s point of view.
Many banks have yet to get caught up with today’s technology, opting to ‘check the box’ rather than adopt a true consumer application strategy. But institutions can’t focus solely on improving customer engagement without also considering security and cost-effectiveness. This makes it vitally important for the banking industry to continue to modernize by adopting digital solutions in favor of antiquated processes.
Our proven digital strategy methodology is trusted by some of the biggest names in banking. Let Anexinet help develop your ideal consumer app strategy by defining business and technical requirements, building a gorgeous, on-device Proof of Concept, and formulating a development plan for moving forward.
If your institution isn’t embracing digital transformation, you run the risk of losing the valuable customer relationships you worked so hard to build. It’s time to revisit your customer-loyalty investments and digital customer-engagement strategy to enable users to get the most out of every interaction with your brand.
Our white paper will help you understand:
This whitepaper describes the practical steps your organization should take to boost competitiveness and stay ahead of the digital transformation happening right now in financial services.
Consumer choice has always been an important driver of innovation in the banking industry, but technology is intensifying competition, causing a significant shift in favor of customer experience. With so many banking options available—and each one immediately accessible to customers—it's the overall customer experience that makes all the difference. Digitally savvy consumers demand more from their bank and expect them to keep up with their evolving needs and preferences. Why? Because they can. Some companies are slow to provide robust digital experiences. Others have attempted digital innovation only to be held back by the challenges of legacy systems and processes.
According to this Capgemini 2019 World Retail Banking Report, “Banks are struggling to deliver a delightful last-mile experience to customers as non-traditional firms swoop in… Customers report low positive experiences across many banking interactions, with loan and mortgage applications and problem resolution identified as the highest friction.”
If your institution isn’t embracing digital transformation, the end result is inevitable. You will lose the valuable customer relationships you worked so hard to build. Further, poor experiences at initial touchpoints, complex last-mile transactions in a customer’s journey, and a frustrating banking-app support experience can lower the probability of forecasted revenue for U.S. and global financial institutions. Considering how easy it is for consumers to seek out an experience they love, many organizations are losing market share to digitally savvy companies. This is not a fad. Customer experience is here to stay and it's reshaping how banks compete for your business.
This Temenos study on retail banking found nearly a third of bank leaders fear decreasing customer loyalty as a primary concern. Thankfully, a solid, agile digital customer-engagement strategy goes a long way to differentiate your organization from the prepared, well-funded competition. Increasingly, those that reinvent the customer experience from legacy processes, experiences and touchpoints to reflect modern expectations see improved customer retention and engagement. Today's customers expect more. Improving how people experience your organization, services, and financial products both online and offline is well within your reach.
Though making the transition is far from a simple, one-time event, the following “low-hanging” initiatives should generate significant returns almost immediately. Consider how reinventing your digital customer experience might improve your organization:
Automating back-office processing improves the customer experience in both the digital and physical environments by enabling shorter wait-times. Many more efficiencies may be realized by implementing Robotic Process Automation (RPA). For additional detail on all the ways RPA can be used to streamline processes at your retail bank, check out this episode of the Modern Digital Enterprise, Anexinet’s digital transformation podcast, featuring Citizens Bank VP, Jeet Shome.Unexpected Value:
Surprise and delight customers by delivering value in tangible (yet unexpected) ways (e.g. proactive account analytics). This demonstrates your organization’s attentiveness to the digital demands of account holders.
The right digital customer engagement strategy dramatically expands your reach and retention, with the added benefit of delighting existing customers. Improving your customer experience at every touchpoint provides a valuable opportunity to set your bank apart from the competition and reduce churn from the very first customer touchpoint.
Retail banking customers are concerned with saving, bill paying, and day-to-day financial management. These core retail banking services are highly commoditized, making differentiation by customer experience all the more critical. Here’s how to make it happen:
Inefficient, paper-based processes turn away customers. New customers are easily frustrated by the paperwork required to open an account and begin conducting financial transactions. A lack of end-to-end self-service options is a pain point for banking customers; so much so, that a majority of new account applications are abandoned completely. Because (now more than ever) it’s cheaper and easier to simply switch banks should a customer encounter an overly complex or frustrating financial-services interface.
Streamlining your onboarding process by taking it online will have a big impact on customer acquisition. For one thing, this is a touchpoint you have with every customer. Further, since it’s often the very first interaction new customers have with your organization, it makes sense to prioritize improving the experience as it may represent your best, simplest means of ensuring lasting customer loyalty.
Customers make decisions and form opinions about your organization based on their touchpoints. The onboarding process is one of the first opportunities to build positive customer engagement and loyalty. A streamlined, personal, hassle-free onboarding process positions your organization to attract and retain more customers. Particularly significant since this 2020 PwC retail banking survey found “nearly all bankers surveyed view attracting new customers as one of their top challenges over the next two years.”
In general, banks need to improve self-service options while empowering employees with digital tools and contextual data to better serve customers. Thanks to today's technology, there's so much more you can do.
Naturally, financial factors are a primary motivator for consumer engagement across all industries. In fact, a McKinsey Global Institute study revealed data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain those customers, and 19 times as likely to be profitable as a result. Further, banking customers also appreciate the added value analytics brings, especially when it saves money. Analytics provide transparency by showing customers which changes, programs, or options allow them to maximize their use of your services in ways that benefit their wallet.
As the democratization of banking increases, greater transparency into financial data helps consumers plan their responsibilities and commitments in real time. Analytics data offer solutions for doing so, as long as core systems have reached the necessary level of digital maturity. For example, analytics could show a customer that their monthly savings are lower than average, while highlighting ways they can easily save more. With analytics-driven budgeting tools, customers can target specific spending habits and set future goals.
Oddly enough, this Digital Banking Report identified a significant analytics “performance gap.” That is, eighty percent of organizations considered analytics important, but almost none felt it was being effectively implemented. Your organization can take meaningful action to improve your customer experience through analytics, by checking out this Anexinet webinar, “Using Advanced Analytics to Improve Customer Experience," or by scheduling a free consultation to learn more about how our Customer Experience Analytics Kickstart ensures your retail bank has the data it needs to deliver a truly superior Customer Experience.
Real-time data flow across applications is essential to creating memorable digital experiences. Consider a common retail banking customer touchpoint: the help desk call. To best serve each customer’s specific needs, associates need a 360° view. Comprehensive, real-time visibility into a customer’s actions will considerably shorten the support cycle. For instance, if an active caller is trying to pay a bill via online banking, making that information accessible helps your team provide relevant assistance more quickly.
Real-time information gives your team better context when speaking with customers by providing the clarity necessary to help them complete the customer’s digital journey. To accomplish this, retail banks need to move away from batch processing and embrace real-time, event-driven data streaming. Let’s take a closer look.
Staying competitive at scale requires updating your approach to digital architecture. New entrants in the banking industry are able to gain market share while enjoying greater efficiencies. This is especially problematic for institutions that still rely on legacy systems. Such established organizations may know their architecture needs an overhaul but feel overwhelmed by the complexity of the process.
But as we’ve seen, today's customers expect modern digital experiences that actually improve their day to day banking. In order to retain customers and expand your customer base, your organization will need to transition those internal processes that support your customer service goals. Event-driven architecture makes this possible.
Event-Driven Architecture enables great customer experiences
Customer-centric business events are at the heart of modern, event-driven architecture. Whether through a mobile application, a smarter ATM, or via a live person armed with contextual information, an event-driven technology backbone significantly improves the quality of your customer experience by enabling faster, more personalized service. The goal is to make these events immediately available to every employee, system, user interface and business process that impacts the customer experience. This is best achieved by streaming business events through a centralized hub as relevant systems listen in real-time. The result is a more efficient and intelligent customer-focused organization.
Consider these five outcomes an event-driven architecture helps achieve:
Customers expect responsive digital experiences that feature up-to-date information. Applications should be contextual and intuitive, powered by back-end systems capable of processing thousands or even millions of events, as they occur in real-time.
To minimize friction, internal processes must take advantage of the latest technologies and innovations. Information shouldn’t be locked in data siloes or legacy architecture. An event-driven architecture helps you integrate disparate systems in a highly scalable manner.
Event-driven architecture enables the integration of real-time data into customer experiences, empowering your organization to develop digital tools that deliver the latest, most accurate information and analysis.
Back-office systems processing complex financial transactions can trigger important status events. Digital applications can listen for these events and update the status of a pending transaction in real-time.
Event-driven architecture helps you educate customers by putting advanced analytical tools right in their hands. On-demand toolkits proactively suggest ways to help customers manage their money better and plan for the future.
Event-driven architecture enables banks to provide customers the best possible digital experiences. But as you craft digital customer experiences, instead of viewing online and offline as separate and distinct environments, consider how these touchpoints connect and work together to create holistic, unique interactions. Bring your internal processes in-line with customer-facing systems, and you'll be rewarded with a more cohesive customer-service experience.
Win-Over Customers with Event-Driven Architecture
Modern, streamlined customer experiences reduce churn rates and increase customer satisfaction. Event-driven architecture helps you get there. Following your customer’s journey empowers your retail bank to boost engagement and identify areas in need of improvement.
Mobile technology is the key to redefining the branch experience. People under sixty will do just about anything to avoid going into their actual bank branch—with the exception of driving-thru the ATM. But with the emergence of peer-to-peer payment services (e.g. Venmo, Apple Cash) further eliminating the need to carry cash, even this is at risk.The following stats illustrate the trend away from Branch Banking:
Most banks have focused on consumer self-service and invested in the mobile apps and services they provide customers. While these mobile apps provide convenience (e.g. depositing checks, paying bills), these features provide temporary engagement advantage only, and fail to drive long-term competitive advantage by strengthening the customers’ relationship with the bank. For instance, the quality of a bank’s consumer app fails to influence whether customers establish a Home Equity Line of Credit or open an investment account.
What might deepen a customer’s relationship with their bank? How about a mobile app that lets the teller establish a personal relationship—and a sense of trust—with customers. Banks must pursue a mobile field service approach to empower employees to better engage customers by literally meeting them where they are—in the home or at the local coffee shop—rather than insisting customers go out of their way to get to a Branch. By meeting customers where they are and by anticipating their needs, your organization will engage more consumers and improve customer service as a whole. Even small, simple steps towards giving greater consideration to the customer journey can give a big boost to your organization.
Digital Transformation is about evolving out of paper-based processes and disconnected systems; boosting productivity by increasing the completeness, accuracy and timeliness of information. This lets organizations make better use of company personnel and resources to serve customers more efficiently and effectively.
As the foundational element of a larger digital strategy, mobile can be the primary interface for customers and bankers and is to be leveraged when the situation calls for it and when it matches the customer’s preferred channels. For instance:
Mobile is the Face of Digital Transformation
The digital tools your employees use are opaque to customers—and for good reason. If customers saw them their sheer complexity would only compound any feelings of anxiety or anguish. Not only are few of them designed to engage and be shared with clients, but more are not even designed to be mobile.
At the same time, we know our customers are more comfortable in their own homes or at low-stress locations (like a coffee shop, or a branch that looks like a coffee shop) – and that comfort allows them to open up, share more information and be more receptive to advice. So, focus on getting advisors out from behind the desk (and onto a comfy sofa) to enable better conversations with clients while increasing overall efficiency.To that end, here are a few guiding principles for your mobile innovation journey:
Mobile is the greatest opportunity since the internet to rethink and reengineer interactions and workflows. Immense opportunities exist to boost productivity, simplify processes, automate activities, and integrate data and workflows across siloed systems. Drive value by identifying net-new capabilities that were previously impossible to attain. Mobile is no longer a tack-on. Every major initiative must be evaluated with mobile in mind.
The goal is to remove steps, reduce time, and increase accuracy and repeatability through mobile while enabling customers and employees to work whenever and wherever they need to.
Though the banking industry is historically conservative, customer expectations around digital solutions should drive it to be less so. Think about what your organization can do to better align with what customers and employees require today and in the future.
Not all mobile ideas are created equal, and no company has unlimited resources to design, develop and support mobile applications. The apps you develop must support company goals. Evaluate each new idea to determine how well it aligns with established Business Drivers, and to prioritize the order in which ideas are pulled forward into the planning process and eventually production.
For each given role, think about how technology can improve conversations with clients and prospective clients. How might you better educate clients in face to face meetings and build trust? How can you better understand the needs of our clients and dynamically turn that data into strategies to meet financial objectives?
Day-in-the-Life is an observational technique that involves shadowing target users as they perform daily tasks to identify unofficial requirements and workarounds. The DiTL asks what problems they have, observes employee and end-user behavior, and notes where it deviates from standard operating procedures. Look for any hacks users developed out of necessity to make their jobs more efficient—and integrate these into the go-forward design.
Prior to development, leverage rapid prototyping to test your assumptions and illicit feedback on initial designs. This saves time and resources and, more importantly, lets you deliver products you know will be well-adopted and strike the right balance around change management.
It’s a common misconception that apps are ‘build-once-and-done’ projects. Unlike typical enterprise systems, the mobile ecosystem is constantly evolving. New full OS versions are released annually, bringing new APIs and deprecating others, while security and bug patches are delivered throughout the year. New devices introduce new capabilities or screen sizes along with new defects and performance improvements to address. Ensuring apps keep current requires monitoring analytics, managing the backlog, and implementing regular updates.
You handle sensitive client and company data every day. Going digital/mobile doesn’t make that data any less secure, so long as you’re diligent in your approach and architect for security from the beginning. Just because we’re used to faxes, photocopies and manual input doesn’t mean they’re more secure (they’re likely less secure and traceable) than digital solutions. Competitors have implemented online trading, payments, deposits and more. This is a solved problem in the industry.
You may think your number one priority is enabling clients to reach their financial goals. But you can’t help clients reach their goals if they aren’t compelled to stay with your organization. So, in reality, customer retention is your number one priority—achieved only by providing the best brand experience possible.
To do so, banks must make significant investment in the technology they provide customers and employees. Some are even making dramatic changes to their retail banking environments, eschewing teller lines and desk-bound advisors for conversational, lounge-style environments. Capital One has taken this to an extreme with their Capital One Cafés. Instead of meeting clients at a Starbucks, they have brought the barista experience to the Branch.Overall, retail banking organizations must focus on these critical aspects of customer experience to increase engagement, retain customers, and win new business:
1. Retire legacy paper processes in favor of secure, efficient digital approaches.
2. Real-time enablement via event-driven architecture to enable full, 360° customer visibility. Drive greater customer satisfaction by empowering your support team to help customers faster and more efficiently.
3. Prioritize end-to-end self-service and a hassle-free onboarding process to retain customers and encourage loyalty.
4. Help customers budget and prepare more effectively by providing a transparent view into their financial health through advanced analytics.
To keep up with the ongoing evolution of technology and remain relevant and competitive while earning the market’s trust, retail banks must accommodate consumer demand for modern user experiences. Engagement through digital channels requires stable, high-quality design and functionality to keep the user experience fulfilling.
Such a goal can only be accomplished via a comprehensive roadmap and a solid customer-engagement strategy. Today’s customers want more choice, better design, and a seamless relationship with their financial data, yet very few organizations have in-house IT teams capable of reaching this objective. An effective digital solution is available, however, to leverage the latest technologies, drive loyalty and satisfaction, and achieve success in the market.
It’s time to revisit your customer-loyalty investments to enable users to get the most out of every interaction with your brand. Anexinet has vast experience and decades of proven success developing digital solutions for leading banks. Our digital strategy methodology is trusted by some of the biggest names in banking, including Wells Fargo, Customers Bank, Bank of Montreal, and many more.
Further, we routinely help banks and credit unions determine their strategic direction while ensuring regulatory compliance, and outfit such organizations with application prototypes, Digital Centers of Excellence (DCOE), digital readiness assessments, as well as provide Day in the Life, application refreshes, digital testing services, and more.
When you’re ready to implement the strategies featured in this guide, let’s talk. Anexinet’s new Digital Solution for Financial Services Kickstart is the perfect way to take your digital customer experience to the next level with better design, a consumer-centric strategy, and value-driven applications. Ensure your organization is delivering an amazing, connected ecosystem of multi-channel services and digital experiences—all in just three weeks.
Check out our Financial Services Digital Solution Strategy Kickstart now.