Efma - CCX Forum: Channels & Customer Experience: Veni, Vidi, Vici!

On 16-18 May 2018, the Efma - CCX Forum: Channels & Customer Experience took place in London and explored how banks and fintechs can deliver the experiences that customers want and expect in the future.

The world’s financial services executives attended Efma’s conference to explore the issues at the heart of the banking industry. Delegates were able to network with industry experts as they took part in a range of activities from in-depth sessions to themed lunches. A fintech village enabled them to explore the latest innovations and opportunities in banking. Roundtable discussions, streams and plenary sessions provided expert insights on the issues affecting the industry today.

The event brought together disruptive and innovative technology companies that are redefining financial services across all areas of fintech. The Paypers had the opportunity to listen to companies such as Backbase, Horizon, and TagPay. Also, we had insightful discussions with PayKey, Monythor, Finastra, Cbot, Infosys Finacle, and many more.

Moreover, we are glad to have met or listened to experts from banks including Raiffeisen Bank, mBank, Nordea, HSBC, Akbank, Commerzbank, Santander Banka, Lloyds Banka, Davivienda, Banco Bradesco, etc.

Across the globe, there are over tens of thousands of banks that serve billions of customers of all ages, cultures, and economic systems, offering a variety of services that make our life more convenient. Unfortunately, most banks have too slow a heartbeat for keeping up with customer demands and expectations.

The CCX Forum: Channels & Customer Experience was essential for banks that aim to deliver and improve the experience customers have or expect. So, what is on the digital transformation roadmap for banks?

Customer centricity

Banks need to harness the power of the new digital tools to offer more personalized services and build customer engagement. It is imperative that they put the customer at the heart of everything they do, designing and offering products and services around the consumer’s needs.

Being customer centric is about recognizing what customers value beyond a bank`s products and services, so that banks can identify their needs and expectations. Many fintech companies have built their businesses from the end-user’s perspective rather than a product perspective, giving them a competitive advantage.

Technology

The technology is transforming the banking industry by creating opportunities to better manage the data of the customers, thanks to big data and analytics. Nowadays, there are more connections between systems thanks to APIs, so banks can collect data from social media and connect with different systems to provide smooth browsing and a smooth experience for the customer, while they also create some cost predictions for the banks and the insurance companies.

The technology enables the bank to be part of the customer`s daily life. Moreover, technology brings more security, ease of use, and opportunities for the banks and cost savings.

Artificial intelligence will change the relationship with the customer, thanks to robo-advisory. It will democratise high-end services that are only reserved to private banking and enable more qualitative insights and analysis.

Another big impact will be the cloud. Banks will aggregate services and provide full marketplaces, a mash-up of services, from multiple sources and third-parties. They need to have a scalable platform and move to the cloud.
As for blockchain, digital identity is one of the applications that can be very useful in specific banking areas and even change the way banks onboard customers, solving the identity problem and enabling mobile onboarding.

Omnichannel strategy

An omnichannel strategy brings online and offline channels, data and technology, customer behavior and experience onto one platform. Customers are using multiple devices and multiple channels to accomplish a task over time, and this is especially true when purchasing new products and services. For instance, the customer will start one task on one device and will take the process further on a different device or channel.

The customer expects the same experience on every device and on every channel, and they expect to be able to perform a seamless handover between devices and channels.

To be ready for the future, having a single platform that manages all channels is key, and this will bring banks on par with technology players, startups and neobanks. Most importantly, a strong, open API strategy is absolutely essential for delivering the omnichannel strategy and for the overall digital transformation roadmap.

Mobile banking apps

Technology plays an essential, ever-expanding role in our daily lives, especially the banking technology. We carry our phones all the time, so it makes sense that mobile banking has become a must-have, with most millennials considering banking apps essential to the banking experience.

Industry experts predict that mobile banking will constitute the majority of transactions, meaning speed and convenience for bank customers.

A good mobile banking app does a lot more than track account balances. Customers can:

• View transaction history
• Receive alerts and notifications related to their accounts and/or spending patterns
• Find the nearest ATM and branch locations
• Make bill payments
• Take a picture of their driver’s license and open a new account in less than five minutes
• Deposit money using the camera in the mobile device
• Transfer money to anyone at any time using just their mobile phone number or email address
• View, aggregate and manage money with goals, spending alerts, spending categories and visual tools

Cooperation/having the right technology partner

It`s high time for banks to rethink and revamp their business model, IT architecture and systems. They will need to be much more open and ready culturally and infrastructurally to share business, clients’ platforms and solutions with external partners.

Inventing new propositions or functionalities to offer new solutions or to pursue white-label opportunities will be the key for digital transformation in banking.

To spark innovation, banks should definitely partner with financial technology companies. They must cooperate to define and execute a roadmap to achieve the objectives of both parties.

Open IT architecture

If they want to build their competitiveness on agile web-scale innovation and open up their offering to partners and third parties, banks need to completely rethink their IT architecture. Openness is the key word. Banks need an API-centric platform capable of delivering:

• Consistent omnichannel experiences
• Dialogue in a plug-and-play, scalable manner with third-party software solutions
• Hosting for new, outsourced marketplaces
• A new digital CRM that will enable them to interact in real-time with their customers

Hospitality and shortening the queuing process

Even though banks are making cuts to branch networks, in order to reduce costs and encourage people to use their digital services, traditional banks still talk about the importance of a branch network, as it is one of their major advantages over challenger banks.

And with the new type of branch where anyone is welcome for fresh coffee, password-free Wi-Fi, comfy sofas and, of course, financial products and services, why not?

What`s more, the hospitality design reflects a shift in bank employee roles - more of a consultant with an outgoing personality, the employee sees the customer, they know who they are, and immediately can stand and greet them by name.

Branch revamping

Instead of the branches losing ground to new digital innovations of the financial services industry, many are increasing the integration of digital within the physical branch.

The argument for branches is focused on the need for personal face-to-face services. Also, paper currency and coinage still exist, and there are people who would rather get their cash from a human teller instead of an ATM, mainly due to security reasons.

While a seamless digital experience is vital for a modern financial institution, consumers still appreciate that human touch, and it remains key to forming meaningful relationships and building loyalty among customers.

However, the big challenge for the branch network is to fix the basics for optimizing the branch costs, while being able to invest in digitalization and customer experience improvement.

Agile digital transformation

Some banks are digitizing. Many are using new technology and playing with new partners. Some are even changing the way they work, using (among other methodologies) scrum.

Using the scrum format means operating in small teams and holding daily sessions in which each member explains what tasks have been done, what remains pending and what difficulties have prevented progress from being made. 

The adoption of Agile is helping banks set clear priorities, aligning the efforts of different areas - business and IT - with it strategic goals both at local level and among the different geographic areas.

Revenue growth

Banks that invest more in digital transformation actually outperform their peers over time. Those companies are more prepared for disruption, able to monetize new digital channels, and build a bigger customer base.

There is a direct correlation between digital strength and future revenue growth, and if banks don`t invest in their digital channels, then they are risking the future of their business, and it will affect their ability to continue to grow.

Having a strong digital focus will enable banks to make digital a core competence, helping them to maximize their earning potential.

Banks have been on the digital journey for years now, and operating agility and cultural changes are next on the agenda for digital transformation. Technology trends like Internet of Things, facial recognition, cloud services and mobile apps, customers` expectations and changing branch networks are key aspects to be addressed. This will mean less physical branches and more mobile services, with a customer experience that is consistent in all channels, new IT teams, a back-end widely outsourced, new operating models which take into account costs and proper allocation of both human and technological resources.

We thank everyone whom we had the chance to meet for a great conference! Stay tuned for Efma`s upcoming events and be sure to follow The Paypers on Facebook, LinkedIn, Twitter and subscribe to our newsletter for updates!

About Oana Ifrim

Oana Ifrim is Senior Editor at The Paypers and explores topics spanning B2B payments, supply chain finance e-invoicing, and related subjects and topics. She is a passionate observer of banking innovation, with a penchant for fintech - always keen to identify and understand how new technologies and digital strategies and solutions are shaping the future of banking. Oana holds a Master’s degree in American Studies.