With over two and a half decades of experience in the financial services sector, Rupa Ramamurthy, Senior EVP of Client Services, Back-Office & Digital Solutions (BFSI) at Teleperformance India, shares her thoughts on how banks must embrace agile banking practices to retain customers during the economic downturn.

Rupa Ramamurthy, Senior EVP of Client Services, Back-Office & Digital Solutions (BFSI)

Banking services have undergone substantial changes within the last 3 years, and the sector shows no signs of stagnating. Post-pandemic, we are now amidst a global economic slowdown as interest rates rise and inflation spirals, balancing us on the edge of recession. One Bloomberg survey estimates a 45% chance of a recession in the US within the next year. 

As consumers start to feel the full impact of these recessionary conditions, the battle to retain and win more customers is more intense than ever before. For businesses operating in the financial services sector, customer experience has become the new marketing battlefront, with 81% of companies competing mostly or completely on the basis on CX, according to a Gartner survey. 

The banking sector is typified by its large number of major players, thus saturating the market and fuelling competition and rivalry. CX within banking must adapt to the speed with which the banking landscape is transforming in order to gain a competitive advantage. This is especially the case in a time where customers are constantly jumping ships to more agile, fintech banks which better speak to their needs in response to the economic crisis. 

The Power of Outsourcing and Agile Banking

In response to the rapidly changing landscape, banks are focussing on long-term strategies drawn from digital and domain-led transformation, turning their backs on legacy systems and instead outsourcing to BPMs who will support their long term strategy in order to retain customers whilst simultaneously cutting costs. 

India has become a hub to which banks and financial institutions can outsource tasks such as CX and back-office management. The country boasts a great many BPMs who specialise in these areas and have AI-powered technology which can streamline these processes. These companies, who believe each interaction matters and strive hard to deliver simpler, faster, safer and more cost-effective services, will flourish as the demand for ‘agile banking’ approaches rises.

Already in 2020, studies have shown that $165 million was saved globally through chatbot automation, giving banks more time to deal with the complex issues as they save time, money and resources. 

The difference between then and now is the shift towards the one office concept, where front and back-office tasks are synergised through scientific customer journey mapping. BPMs that are offering these complete one-office solutions to brands seeking to integrate their front, middle and back-office management ultimately place themselves at an advantage.

Processes which in the past have taken 14 days can now be done in a fraction of the time with the help of outsourcing and accelerated digital transformation. This is essential in the post-pandemic world where customers want immediate digital solutions to everything. And, if a bank cannot provide this, the customer will see this as a red flag and swiftly jump ship to an agile fintech bank.

Agile banking has ultimately become a question of survival within banking services rather than a choice, as the space has become increasingly hostile in the face of recession. It is essential that banks provide the channels and processes customers want, ensure consistency and quality at each touchpoint, and more effectively manage the entire customer journey to produce the most streamlined and efficient customer experience. 

Humans and Technology – High-Tech, High-Touch

We now live increasingly digital lives, and we recognise how technology brings new possibility to modern banking services, but today’s world is also clouded with uncertainty as we emerge from a pandemic and enter recessionary conditions. Despite outsourcing and AI speeding up the process of dealing with customer queries, there is only so much a bot can do. Chatbots cannot imitate the ability to reassure a customer, or fully explain to them what is going on. Reassurance can only be achieved with a human voice. Maintaining a human touch, now more than ever, is absolutely vital, and a key differentiator amongst banks. 

During these times, customers seek a personalized banking experience – and it has been revealed that if done well, personalization can lead to a 10% annual revenue increase for banks. Whilst customers demand quick and efficient digital services, they also value being able to speak to a human voice when they have a serious issue which cannot be resolved by AI. 

So, there has to be set rules, and set exceptions on when to pass a customer query on to a bot, and when to pass them on to a human. This will further streamline the process as it will allow the simpler queries to be dealt with by AI, meaning there are more employees to deal with the more complex queries. Inevitably, this will improve customer experience, making customers feel valued and boosting retention. It is essential in the current economic climate for customers to feel as if they are supported by their bank and can lean on them, and a degree of human empathy is key to this. 

This ultimately all comes back to ideas of agile banking. Banks must listen to their customers and their needs in order to produce a customer experience which is increasingly digital, yet still has that human touch, and maintains efficiency and cost-effectiveness for the bank itself. 

In order to keep their heads above the water within this uncertain financial landscape, and avoid losing customers to competitors, financial institutions need to focus on steering their digital capabilities to become more agile. The booming digitisation post-pandemic has resulted in customers expecting a new standard of experience, meaning that it is now essential for the BFSI sector to accelerate digital transformation to stay competitive.