The consumer is digital, and no industry knows this better than banking. ExchangeWire speak with Jouk Pleiter (pictured below), CEO, Backbase, about how digital transformation is forcing the banking industry to sit up, take notice, and take an omni-channel approach to marketing seriously to ensure they are where their customers are.
Time was, bank customers were content to do their business in-branch during their lunch hour, maybe even to make a specific trip to discuss their finances. But that was then.
In our fast-paced world, as time has become tighter, consumers want to interact with services and companies on their own terms – wherever, whenever they like.
You can see it in our downtime. Video-on-demand services make it easy to watch our favourite shows and movies on mobile, tablet, computer, or TV, at a time of our choosing, not a scheduler’s. But Netflix makes it even more frictionless, resuming playback on one device right at the point we turned off another.
Banks have got the message. Their mobile apps became the number-one way Britons do banking last year, according to the British Bankers’ Association. But the Big Four, most of which have ageing legacy infrastructure, are going to have to do even better if they are to fend-off competition from a new generation of upstart challenger banks. The innovator’s dilemma is to remain relevant and deliver a compelling customer experience – not just across one channel, but across all.
Banks know this. Our report, “Omni-channel banking: The digital transformation roadmap”, produced together with retail finance organisation Efma, contains a survey of more than 100 C-level bankers from around the world. It found 61% of banks believe an omni-channel banking experience is extremely important. The problem is, only one-in-five is actually implementing such a strategy.
Why? Typically, industry disruption occurs faster than anyone anticipates. Taxi drivers didn’t see Uber coming. Now the ‘Uber of banking’, Lending Club, is booming, going public with a valuation greater than all but 13 US banks.
High-street banks need to be on top of their game. Their biggest threats are tech companies and startups, according to our survey. But only 36% consider themselves a ‘leader’ when it comes to innovation, the majority believing themselves, instead, to be followers.
Financial institutions will only retain market share by beating the disrupters at their own game, by becoming disrupters themselves.
The most important step is shifting the strategic focus so that the customer is always the first thing you think about, not the channel. Traditional banks still think in silos – a quarter of surveyed bankers say that is their biggest roadblock to improving customer experience.
Successful digital transformation begins with an understanding of digital consumer behaviour, preferences across channels and devices, complemented with an agile strategy and lean IT stack that enables customer-centric innovation.
All of this is true for all bank products; but, for an omni-channel approach, it is even more critical. The irony about operating over multiple channels is that it becomes infinitely more effective when you operate off a single platform – just like tech companies, startups and the digital ‘neobanks’.
Only 13% of banks operate in this way. The outcome: there are numerous examples of customers emailing their complaints and then going to a branch to find that their bank has no record of the issue. Consumers deserve an experience that ties together all of their potential interactions with you – the banking equivalent of Netflix’s pause-and-resume.
So, it is good news that most banks, 53%, do expect to move to a single underlying customer platform by 2020. Banks should have flexible APIs for their main processes and core systems, and an orchestration layer in between to ensure handover and session persistency. This is key for creating a seamless switch between devices.
But omni-channel is about more than technology. One of the key components of a winning omni-channel presence is communicating a strong, recognisable brand across every touchpoint. A bank’s brand – the promise it intends to deliver – should be reflected visually, as well as experientially, in the same way via every channel, whether it’s a branch, ATM, or mobile banking app.
Accordingly, user experience and marketing should be the top layer of your omni-channel strategy, ensuring that a customer enjoys the same experience of your company, no matter what the touchpoint – even if the underlying processes look very different.
Research from Google has shown that 98% of Americans switch between devices in the same day. But not every device is used for every purpose. Creating identical apps and sites for very different devices is a mistake. It’s better to map specific devices to specific consumer behaviours and expectations.
However, it is important to invest marketing spend where consumers spend their time. Most banks are still investing their complete digital marketing budget in the web channel – but most of their traffic is now coming to the mobile channel. That means banks should also ensure mobile can be used as a marketing channel, not just a transaction medium.
Mobile presents huge marketing opportunities, with the right technology capabilities to be able to provide the right context to the marketing campaigns. In its mobile app, for instance, Barclays advertises loan products to consumers – not in some annoying banner or pop-up, but right there in the transaction list, complementing customers’ daily activity.
That is fascinating, because, when a product is both a utility and a communication medium, you need to ensure you can effectively bring both functions to the party. Our survey found the main digital channels bank business staff can manage without IT intervention are the public marketing website and special campaign pages – not the internet bank platform, and certainly not mobile apps.
Simply put, marketing teams need to assert their claim to have access to the core platforms that consumers use, alongside both user experience teams and technology teams.
Only then will customers begin to get the harmonious experience from banking that they are already getting from other services.