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Digital Banking with the Human Touch

by internationalbanker

By Nick Fahy, Chief Executive Officer, Cynergy Bank





The COVID-19 pandemic has forced all of us to make more use of online channels for the goods and services we need each day. While the obvious growth in online shopping has been well reported, there has also been a “tech-cceleration” in digitalisation in many other sectors, including banking. The adoption of technology has been accelerated. But while millions of consumers feel very comfortable using digital-banking services for routine transactions, it would be a mistake to think they no longer want personal relationships with their banks.

In fact, I think the opposite is true. Customers do want the convenience that online and mobile banking offers when it comes to something simple, such as checking a balance or organising a payment. But they also want the option of interacting with another human being for more complex transactions or when a problem needs resolving. And given the dramatic impacts of the pandemic on people’s finances, for good and bad, at Cynergy Bank, we believe that this demand is now likely to be heightened.

This desire for human interaction is true for all customers of a bank. What is true for consumers is perhaps even more true for entrepreneurs, the high net worth and the businesses that will drive the economic recovery post-pandemic.

Not all businesses are the same. Some have the capability and desire to expand and are in the sectors that will drive the recovery. Of particular importance are scaleup enterprises. The ScaleUp Institute defines a scaleup as a company with an average turnover growth greater than 20 percent per annum over three years and that employs at least 50 people and has an annual turnover in excess of £10.2 million and assets above £5.1 million.

Unfortunately, these enterprises receive little attention in the United Kingdom. The UK comes third in the OECD’s (Organisation for Economic Co-operation and Development’s) start-up index but ranks just thirteenth when it comes to scaleups. Yet, scaleups make a disproportionate contribution to the UK economy. The ScaleUp Institute reports that the 5.7 million UK SME (small and medium-sized enterprise) businesses generate £1.9 trillion turnover for the UK economy. By contrast, the 36,510 scaleups (as defined by the Institute) contribute £1.3 trillion of this total.

Our research shows that entrepreneurs become time-poor as their businesses scale up; they want quick decisions and meaningful personal relationships with banks that understand their businesses’ needs. SMEs with the ambition to scale up are underserved by UK banks, not receiving the required relationships to overcome their barriers to growth. They:

  • fall between the gaps of High Street bank models—too complex for the faceless retail division, too small for the mid-corporate relationship model;
  • cannot have meaningful relationships with digital banks, which are app-based and serve the smaller micro-business community; and
  • cannot be fully supported by challenger banks with a transactional-volume approach and lagging on digital technology.

This gap in the market could be exposed in the post-COVID-19 reinvigoration of the economy. Ambitious SMEs with capabilities to scale up will be vital for growth and job creation. Banks need to support them by removing the barriers that can dampen their ambitions. Our insight shows that they want:

  • easy, personalised banking, and they want to deal with people, not just apps;
  • clear understanding of finance options as they grow;
  • relationships with “trusted advisors”, who understand their businesses;
  • modern and convenient technology; and
  • solutions to help them grow and run their businesses efficiently, including access to new markets, talent and leadership development and improved infrastructure.

The digital-banking revolution has undoubtedly been a force of good for many businesses. And, of course, COVID-19 has accelerated the adoption of technology. New research on the future of businesses from Cynergy Bank has revealed that although SMEs acknowledge the benefits of the revolution, with 68 percent agreeing that it has vastly improved their banking experiences and ease with which they can manage their finances, there is an overwhelming desire for a blend of digital functionality and human interaction. Our research shows:

  • Over three-quarters of SMEs (78 percent) agree that a digital transformation of banking needs to be balanced with a human element, with those in the over-55 age group agreeing most strongly at 81 percent compared with 78 percent in the 18-34 age group and 76 percent in the 35-54 age group.
  • Almost six in ten SMEs (58 percent) believe the digital transformation of banking has resulted in cost savings for banks, but the customer experience has suffered as a result.
  • When asked to rank their most desired banking service, unsurprisingly, “24/7 access to customer service via an app with human contact” appeared near the top of the list, with 29 percent of SMEs citing this as a service they would require if they were to move all business banking needs to digital-only services.

It is clear. The answer does not lie in a return to traditional branch-based banking, any more than it would make sense to pretend any banking issue can be dealt with using ever more sophisticated mobile-banking apps. We will no doubt see more branch closures on High Street in the months and years to come, as well as further launches of app-based banking services. We may also see closures of SME-banking centres as banks seek to save money and drive interactions online—with promises of frictionless relationships. But many customers are looking for a new approach: digital banking with a human element built in.

Now is the moment for banks to step up to the challenge. As the banking sector begins to contemplate life after the pandemic, the imperative is to design blended solutions that deliver the best of both worlds. Customers should be able to enjoy the convenience of online or mobile transactions when it suits them while retaining access to personalised and tailored advice.

The future will not just be about high tech for banking customers. It will be about high-tech, high-touch experiences.

The race is on to deliver this blend. Technology provides a means to do so; we can, for example, embed access to human banking support in the mobile apps we offer and leverage the open-banking framework to provide a much broader service to all customers, including small and medium-sized enterprises as well as individuals.

And with SMEs (and scaleups) being crucial to our post-pandemic recovery, banks need to ensure they are supporting their clients with the correct blend of human and digital services to allow them to grow and for the economy to grow with them.

Still, there will be challenges along the way. How, for example, will banks provide personalised support 24 hours a day, seven days a week? How will they ensure customers can access all the benefits of open banking through a single Netflix-style portal, rather than having to navigate this ecosystem for themselves?

The banks that crack these challenges will provide exactly the customer experience that large numbers of people now want. There will be banking customers who want only personal service, just as there will be some who prefer to do everything digitally. But most people are looking for both; the imperative now is to use technology to meet that need.


Nick Fahy is the CEO of Cynergy Bank, the UK’s human digital bank. He is a highly experienced financial professional, having worked within the banking sector for more than 20 years across the UK, Ireland and Australia.


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