In December the Bank of England announced that contrary to expert predictions, it would not in fact ask the UK’s banks to increase their capital reserves. The news met positive commentary everywhere as the start of a new, more expansive era for the sector.
Indeed, this news presents a prime opportunity for UK banks to broaden their focus and start delivering on truly meeting the needs of customers. It means that our banks can stop fighting fires and instead start concentrating on improving the customer experience.
According to a recent survey by Salesforce, 77 percent of customers believe their banks are failing to meet their expectations—and many clients of UK retail banks are disillusioned with the service they currently receive from their banks.
Among high-net-worth individuals, a customer tier that is critical for financial-services institutions to build and maintain enduring relationships with, fewer than half believe the technologies used by banks actually meet their needs today.
Banks well-placed to deliver quality service
Clearly, what customers increasingly expect is the same type of retail experience they now enjoy in other areas of their lives, such as High Street and online shopping—but they want that experience echoed and delivered by the banks to which they’ve been loyal for decades.
What does this mean for banks? In practice, it’s about immediate responsiveness to customer needs, personalising every customer interaction, delivering effortless experiences, and proactively predicting what a customer wants—not just today, but next week and next year—and delivering on that expectation consistently.
UK banks are ideally placed to deliver this kind of service. Over the years, they have developed into giant institutions and have the potential to meet consumers’ every financial need, from credit cards to current accounts, mortgages to insurance, pensions to tax planning and financial advice.
But that’s not the reality today, and it’s opened the door for non-financial providers to move into the space of traditional banks. And tech companies are taking the lead, with Google, Apple and Alibaba all successfully pioneering payment services such as Google Wallet, Apple Pay and AliPay.
Tim Yudin, director of collaboration and change at the UK Payments Council, explained recently that the new Europe-wide Payment Services Directive 2, due to take effect in July 2017, means third parties can effectively disintermediate that bank-client relationship. And unless banks learn how to respond, create a compelling reason to keep that direct relationship—and, more importantly, act fast to make it happen—they risk becoming de facto back-office service providers whilst new-entrant digital disruptors can boost their own bottom lines.
And that’s the challenge—how banks can understand, enhance and manage a customer’s overall financial journey by bringing their wealth of experience and service offerings into play. Barclaycard, for instance, can send text messages with details of exclusive tickets for an upcoming concert, or High Street special offers tailored to a customer’s buying pattern—and that text is just as important to the overall experience as the text informing them about an interest -rate change. In other words, this is no longer just about building a transactional relationship with a customer but about understanding that customer’s overall needs and creating tailored solutions that not only meet those needs but exceed customer expectations of what a bank can do.
Empower your workforce
So how can banks deliver this responsiveness to their customers? At Salesforce, we call it “precision banking”: using real-time information about a customer to deliver personal and contextual messages, alerts and advice to provide the right service, on the right device, at the right time.
Context, by definition, is about relating what you offer, customers’ previous interactions, and your current customer dialogue to their everyday lives, needs and wants. To achieve this context, banks need to empower their workforces with the tools to do the job. Many employees—young, smart and keen—have as acute an awareness of the potentially beneficial impact of smart technology as the customer him- or herself.
Using the right technologies can help, too, to provide immediate information at staff’s fingertips, turning staff into instant experts about that customer. Imagine that every single customer of a particular bank could walk in through the door of any bank branch in the country—not only “their” local branch—and be instantly greeted by employees who understand what that customer needs.
Staff could then respond immediately to that need and take the customer through a tailored experience, offering additional personalised solutions as part of that customer’s financial journey—for example, an instant home insurance quote alongside the mortgage deal itself, plus a will-writing package and inheritance tax planning. And if a customer needs to make a claim, stop or increase a payment, they can do so instantly—and those decisions can be responded to immediately.
The advantages to a bank of empowering its workforce are massive: the same Salesforce survey found that a customer who takes out four financial products instead of just one can increase a bank’s revenue by a whopping 73 percent.
App creation is another area to consider when it comes to empowering both employees and customers. Apps make customer interactions simpler, faster and more convenient for both bank staff and customers alike. As a result, the past 18 months have seen a surge in the use of banking apps.
But in order to create apps that respond to customer needs, such as financial planning around Christmas or for a holiday, the banking sector needs to develop them at speed. Yet a recent study by CSC and Finextra of 74 financial institutions found that 22 percent would take more than 12 months to build a new mobile app, and 45 percent said it would take them at least six months. And that’s simply not fast enough.
Precision banking relies on speed, and this is an area in which digital disruptors, which are known for their agility, form stiff competition. However, with an open, integrated approach to technology, the banking sector can succeed in delivering solutions that reflect the entire customer journey, at speed.
Happier staff, happier customers
Empowerment is also about trusting your entire workforce to use technologies that can help smart interactions with customers, allowing them to engage directly and build loyalty and trust. Coincidentally, this is also another way to create more job satisfaction among bank staff themselves.
Customers want innovation, more real-time services, and to feel the benefits from an effortless banking experience. This competitive pressure demands in-depth, up-to-the-minute knowledge of the customer and constant engagement via timely information.
While digital disruptors are hot on agility and customer service, they own only a fragment of the customer relationship for now, but that ratio could easily change if the banking sector fails to innovate to improve the customer experience they offer. Precision banking can help turn impersonal “transactions” into positive experiences for customers, and banks that apply these practices can transform their customer relationships—creating and maintaining loyalty and market advantage.