We, as consumers, like to be self-sufficient, don’t we?
Whether it’s using the self-checkout till in the supermarket or a self-check-in kiosk at a hotel, three-quarters of us expect to be able to find answers, solve problems and complete transactions on our own, without human intervention.
With banks, brokers, mortgage lenders and other financial institutions facing challenges such as high demand for high-quality service; an increase in cyber-security threats; regulatory changes; and intense pressure to deliver higher returns whilst lowering costs, does self-service technology help or hinder the financial industry with these problems?
What do we mean by self-service: how does it work?
Put simply, a self-service capability allows customers to get a service without any interaction or help from the service provider.
Believe it or not, the concept of self-service began in 1917 with the world’s first “self-serving shop.” US citizen, Clarence Saunders was the first to open a store that enabled customers to walk around and collect the items they wanted to buy, instead of handing a list of goods over to the clerk.
But, with the rise of technology and the consequential increase in consumer expectations for quicker, seamless services from businesses, this simple but innovative concept has revolutionised a lot of industries.
General self-service solutions
From simple self-service solutions like FAQ pages, designed to help customers find the answers to their questions, to more complex self-service technology such as sophisticated AI-powered chatbots that guide customers through processes – self-service solutions are everywhere you look.
Whether it’s paying for petrol at the pump, checking your luggage in at the airport, or ordering a drink in a bar, you now can now do it all by yourself, without the help of a business representative.
Not only do these types of self-service capabilities make transactions quicker and stress-free for customers, they also enable businesses to meet customer expectations whilst streamlining their processes and cutting their costs. After all, the more self-service functionality they can offer their consumers, the fewer mistakes will be made, the more efficient their processes will be, and they’ll need less employees to carry out routine tasks.
But while we’re all probably familiar with the self-service capabilities in retail, hospitality, and travel, what about within the finance industry?
Being able to order a McDonalds or pay for your weekly shop without needing to interact with a single person is a relatively new concept. Getting cash out without needing to go into a branch, is a self-service solution that’s been around since 1967.
That’s right, one of the first self-service technologies to hit the consumer market was within the finance industry with the trusty, old ATM.
But is the finance industry still a pioneer of self-service technology?
How self-service technology is changing the face of finance
So, it, therefore, makes sense that financial institutions invest in self-service technology. But what type of self-service technology are we talking about?
Examples of self-service in finance
Consumers crave convenience. We live in a fast-paced world where technology gives us the ability to do more, quicker. So, it’s only natural that customers should expect the same level of efficiency and ease when completing their financial transactions.
For instance, online banking gives customers the opportunity to check their balance, set up direct debits, transfer funds and settle bills, without any input from a bank representative. This self-service capability gives them access to their bank 24 hours a day, 7 days a week and it puts them in charge of how and when they make their financial transactions.
Then, there’s deposit automation which provides consumers with cash recycling capabilities, deposit options and the ability to make transfers and pay bills from an ATM. This has become one of the fastest-growing self-service banking technologies, with over 50% of ATMs expected to have this feature by 2025.
Even complex tasks like filing tax credit claims can be done without the help and support of an R&D tax consultant. Customers can use self-service tax claim portals, like the R&D tax credit portal Tax Cloud, for instance, to submit accurate claims and receive the maximum amount of tax relief, in less time than it would take to use a specialist tax advisor.
These examples prove that, for the consumer, self-service solutions are a no-brainer when completing their financial transactions: they make life quicker, easier and cheaper.
But how does offering these types of self-service solutions affect financial institutions?
Self-service pros for financial organisations
“For financial institutions, personalized and proactive self-service is proving to be a measurable competitive advantage for delivering differentiated, effective customer care.” – Aspect
Financial companies who use self-service technology to attend to their customers will save on the labour, infrastructure and transactional costs that are associated with a physical branch or building. In fact, statistics show that financial institutions can reduce the cost per transaction from £2.88 to 27p by offering their customers self-service options.
In reducing costs through self-service technology, banks and financial businesses can pour more time, money and resources into key activities like improving their core product, for example.
But aside from the financial benefits, offering self-service capabilities to their customers allows financial companies to serve them better, creating a more loyal customer base.
Self-service technology allows companies to collect a vast amount of data about a customer’s behaviour. They can use this data to position themselves better, create products that meet customers’ needs and run targeted marketing campaigns.
This means that banks and financial businesses create happier, more loyal customers.
“By appealing to customer needs and preferences, self-service adoption rates are increased and calls requiring agent assistance are reduced” – Aspect
However, although it seems like consumers are shying away from human contact, there are times when face to face interaction is essential: If there’s a complicated transaction taking place or if personal guidance is needed, for instance. For example, 59% of consumers would want human assistance when applying for a loan and 58% want it when opening a new account.
So, financial companies need to tread carefully between the line of full self-service and human contact, ensuring they provide customers with both options, as and when they’re needed.
“You can reduce your branch footprint, bridge your digital and physical channels and deliver a differentiating experience anywhere and anytime your customer wants to engage.” – NCR
As customers embrace new technology, the banking rules of yesterday are becoming increasingly redundant. Self-service technology has contributed to the exponential growth and profits of financial institutions worldwide. This evolution had transformed the way banks deliver their services and those businesses who don’t harness the power of self-service technology risk missing out on a distinct competitive edge. But care does need to be taken to make sure customers get the human contact they need, when they need it.