Puneet Taneja, Head of Operations for Banking, Financial Services and Insurance at Intelenet Global Services, provides insight into how retail banks can couple digital innovations with the appeal of in-person expertise
Lloyds recently has announced plans to shut 49 branches, while also creating 925 new roles as part of a £3bn investment to adapt to the rising number of customers opting for digital banking. This announcement came against the backdrop of the increasing challenges faced by banks to retain their market share. Not only do they have to comply with changing regulations, but they are also under pressure to navigate the constantly evolving digital landscape while ensuring a seamless customer experience.
Over the past decade, we have witnessed a growing number of digitally agile Fintech players entering the financial market, particularly after the recent launch of the open banking initiative, which has made it a legal requirement for banks to share their customer’s data. Banks are now being forced to drastically shift their business strategy as the challenge to retain their customer-base intensifies, with an increasing number of customers wanting easy and convenient banking, and on their own terms.
Empowering banks in their struggle against competitors must involve an end-to-end reimagining of the traditional business model. To thrive in this environment, digital adoption and innovation are key, and the focus needs to be on new solutions for both back-end and customer facing services. It is essential that banks innovate their products and services, leveraging emerging technologies such as AI and machine learning. Even expanding their app offerings can enable financial providers to bridge the gap between physical and digital.
Banks and financial institutions can attract and retain customers by providing a compelling multi-channel experience across a number of touch points. Expanding service offerings to include self-service options, chat-bots, and telephone banking will further improve customer satisfaction, by ensuring that clients who don’t have access or struggle with technology will still be able to take part in banking services. The industry can tap into innovations that, for example, recognize keywords when customers call the bank, enabling the bank to decipher the purpose of the call and automatically forward them to the most relevant department – streamlining the customer experience and in turn, saving them time.
In this day and age, the customer should be at the heart of every business decision.
However, as banks embrace online and mobile banking applications to suit the requirements of technology-savvy customers, they must not undermine the importance of the physical experience. A recent study found that most customers, including millennials, still prefer having a physical branch nearby, particularly for major transactions such as choosing and applying for a mortgage.
In the digital age, customers expect more self-service options and any-time, anywhere service. Banks need to think beyond a ‘one-size-fits-all’ strategy to cater to the customer’s increasing demand. For customers based in remote areas or in regions that have been hit by the blow of a recent branch closure, mobile-based technologies can be used to zroaming advisors, who can then be connected to isolated customers. This can provide customers with the increased level of service they desire, and improve overall customer satisfaction.
Additionally, with the support of automation, staff are becoming more empowered to resolve complex issues. This in turn means that branches will not just sustain the banking experience for customers, but will manage to revive it. For instance, one national UK bank used technology to reduce complaints by 25% and customer churn by 12%, by using data analytics to recognize customer needs in advance and resolve issues faster.
The increasing number of innovative technologies entering the market means that now is the best possible time for financial institutions to reposition their focus towards their longer-term growth strategies. Ultimately, financial service providers need to find a way to strike a balance between online services and the advantages of a high-street network. By embracing the different channels available, it is possible to strike a harmonious balance.
We are in a time of significant change, with challenger banks and specialist lenders increasing their gross lending and market share, while many traditional providers are seeing their business stagnate. However, it is not ‘game over’ for banks. They not only have an established customer base to leverage, but can use this opportunity to create a harmonious balance between the different channels available, to accommodate the needs of all customers and strive for success in the new banking landscape.