In today’s rapidly evolving financial landscape, institutions are constantly seeking innovative ways to enhance customer experiences and maintain a competitive edge. One of the most promising developments is the application of Artificial Intelligence (AI) to achieve hyper-personalization. This cutting-edge approach is transforming how banks and other financial service providers interact with customers, offering tailored solutions
With big banks, big tech, and digital newbies vying for a bigger slice of the financial services pie, mid-sized FS firms need to up their game. Provide a great digital experience for these four moments of truth to scale your business cost-effectively.
The Uneven Playing Field
On average, each of the world’s top 100 banks spends 26 times more on IT than the individual 900 banks that follow them.
Given the vast inequality illustrated by those figures, mid-sized financial services firms face an uphill battle to hold on to the hearts and minds of increasingly digitally-demanding customers.
And with record levels of investment in the UK FinTech market, it’s not just the big banks giving incumbents a hard time. Mid-sized financial services firms are in an unenviable position, squeezed between big banks and big tech on the one hand and well-funded digital newbies on the other.
If your firm is part of this “squeezed middle,” this article aims to help by focussing on four opportunities to harness digital techniques that will help your business scale:
(1) Customer onboarding
(2) Digital self-service
(3) Maturing/switching
(4) Collecting
For each of these, we explore two sides of the same coin. On the one side — delighting customers with a brilliant digital experience. And, on the other, helping banks / FS providers drive efficiency and scale.
Moment #1: Account Opening in Under Four Minutes
For new potential customers, opening an account is your first opportunity to impress. Digital leaders make it quick and easy to open an account without needing to visit a branch. The process can be as fast as four minutes.
Improved CX
Provide your customers with a frictionless onboarding process with zero paperwork and instant decisions. A seamless onboarding experience works across mobile apps or on browsers on any device.
The process is lightning quick, thanks to automation, connections to your core systems, and integration to third-party services used for checking KYC, AML, and creditworthiness. Customers get instant decisions the moment that they complete the application process.
Users can save their progress and come back later using another device.
Improved Efficiency and Scalability
Integration, automation, and straight-through processing dramatically reduce the execution cost. The faster process means fewer abandonments, maximising return from your marketing spend.
The ideal customer onboarding solution is not just quick to implement — it’s quick to adjust too. So, you can continually finetune the onboarding process to maximise conversions.
Moment #2: The First Time Customers See Your Digital Banking UI
What do customers think when they first experience your digital banking facilities?
Improved CX
Does it connect them to all their accounts and provide all the money-management tools they need? Can they connect on their terms via live chat? Do they get personalised, relevant product offers? Can they sign-up for new products without re-keying information? Are transactions fast and frictionless?
Improved Efficiency and Scalability
Providing this kind of slick digital experience is no mean feat, especially if you have siloed core systems for different products, such as current accounts, savings products, cards, and mortgages.
Further technical challenges include compliance with PCI, DSS, and SCA security standards and ensuring a great user experience on all screen sizes across iOS, Android, and web browsers.
You’ll also want to provide 24/7 support for your digital banking solution and satisfy the FCA of its operational resilience.
With all these factors in place, you can reap the rewards with a brilliant digital experience that lets customers fully control their finances. The resulting channel shift will boost the scalability and cost-effectiveness of your business.
Moment #3: Mortgage or Savings Fixed-term Maturity
Are you set up for success when fixed-term mortgages or savings products mature? According to research increasing customer retention by just five percent could improve your organisation’s profitability by over 25 percent.
Improved CX
Provide a frictionless self-service experience that guides customers through their maturity options. Give them all the information needed to easily compare mortgage offers side-by-side. Automate the provision of personalised illustrations that comply with all regulatory requirements. Ensure the acceptance process is automated, secure, and compliant.
Provide a brilliant digital switching experience to increase your retention rates and profitability.
Improved Efficiency and Scalability
The same switching experience will significantly reduce the cost of your customer retention programme. The maturity retention efforts of many financial services providers involve a chaotic combination of manual processes and unintegrated systems that are slow and cumbersome to operate.
You need to escape the chaos to provide a frictionless digital switching experience. Then you can scale your customer retention programme to meet peak periods of demand, which are always a pinch point for mortgage lenders.
Moment #4: Collections When Things Get Difficult
Sadly, the cost-of-living crisis is likely to lead to more borrowers falling into arrears. Lenders will likely need to scale their collections operation and do so efficiently and compliantly. A digital self-service approach to collections is proven to raise collections performance while treating customers fairly and non-confrontationally. This, too, could be a moment of truth.
Improved CX
Digital leaders make repayments easier for customers by offering online tools such as income and expenditure trackers. They help customers quickly set up arrangements and make it easy to get in touch by chat or call-back. And customers who engage via a digital channel keep more of their payment promises and repay more of their debt.
Improved Efficiency and Scalability
Digital self-service reduces the burden on inbound and outbound phone calls so that customer service agents can devote more time to complex and vulnerable customers. Cases are quicker to resolve. And with compliance baked into your digital collections channel, resourcing and staff training are less of a burden.
How can your firm keep up with customer experience leaders?
Traditionally, when it comes to introducing or modernising digital solutions, there are two broad strategies to consider. Should you buy, or should you build your solution?
But a third option may surprise you for sourcing or modernising your digital banking solution; a new approach that promises the fastest time to value, plus the speed and agility to outsmart your competitors.
