Interview with Efma on how technology is shaping customer behaviour - and the other way round

In an interview with The Paypers held during CCX Forum: Channels & Customer Experience in London, Efma`s CEO, Vincent Bastid, shares his insights on how technology and digital trends have changed the way customers interact with their banks and other financial institutions

Could you share with our readers a little bit about your professional background, and what made you join Efma?

My background is in high-tech and IT, having worked for TI, Apple Computers and Microsoft. I worked 22 years in these global high tech companies, before moving to BNP Paribas and then to Efma.

Three years ago, I got the opportunity to replace the global CEO of Efma, to aid in the reshaping of the company and to support the transformation of the industry and of the members of our institution. So far, we have more than 3,000 member institutions from 144 groups around the world, which makes Efma the largest global network of banks and insurance companies.

How are new technologies shaping—and being shaped by—customers’ behaviour and expectations? How are these technologies changing the way customers interact with their banks and other financial institutions?

The technology is completely transforming the finance industry; it creates opportunities to better manage the data of the customers, due to big data and analytics. Now there are more connections between systems thanks to APIs, so you can collect data from social media, you can connect with different systems to provide smooth browsing and a better experience for the customer, but also create some cost predictions for the banks and the insurance companies. Artificial intelligence can be used for robo-advisory, for instance. All these technologies help save costs, while at the same time bringing flexibility and a cost-efficient distribution platform for banks, through business process management systems (BPMS), for example.

So new technology is creating good opportunities for the banks to better engage with the customer and to predict what customers need, with the help of data and analytics.

The systems now provide other opportunities for the bank, like, for instance, knowing when the customer is supposed to change their car, so that the bank can immediately offer a car loan.

Now banks take care of shopping as well. There is a big shift to provide more services and still manage the security part, mainly the ID and the authentication. That is why the technology brings big changes in the industry, due to biometrics, on both the mobile phone and the ATMs.

What digital trends will have an especially powerful impact on the management of customer relationships?

The customer relationship is kind of an erratic subject. Physical contact and building a relationship are quite difficult today because, in the branch, you (the customer) are separated by a PC screen from connecting and building a relationship with the bank manager. Now, the digital is coming to the branches to improve the relationship with the customer. Banks are moving from multichannel to omnichannel by integrating the customer’s digital journey into the whole customer relationship. It is not digital versus physical, but more like starting a discussion with my bank at the call centre, and then moving the discussion at the branch, and also enabling customers to start a product application in one channel and finish in another, or at a later time.

Regardless of the city you are in, you should be able to withdraw money from an ATM no matter the safe limit, which can be raised at will with a simple mobile intervention, through “Dynamic” CRM.

I think the big impact of the digital and the future of the digital CRM is called the “Dynamic” CRM. It means three things: real-time, multichannel and contextual. This is the future of omnichannel. The beginning was built through silos channels – where you could see physical channels and remote channels – but not communicating with each other; in one word – multichannel. Then we moved to the omnichannel experience where channels were connected to one CRM, which is a 360º view of CRM. Now the next step is “dynamic” CRM, where everything is connected in real-time. In addition, with analytics, it is going to be contextual. You can even receive a message from the bank that you have to refill your car gas tank, because we know exactly when you refill your tank, based on your payment history.

How can banks and other financial institutions harness new technologies like Artificial Intelligence, Internet of Things, quantum computing, blockchain and chatbots to deliver financial services that keep up with consumer needs and expectations?

There are many opportunities within artificial intelligence and robo-advisory. I believe the Internet of Things has a huge potential in insurance with connected objects, connected cars, connected devices for your health, habit monitoring, and predicting accidents as well.

Bankers and insurers can see how technology is used for innovation in banking and insurance via our portal that gathers more than 2,300 innovations using technology, accessible to all members, including employees and banks. Under Artificial Intelligence, you will find detailed case studies posted by banks on how they use artificial intelligence, e.g..

KYC and AML requirements make customer onboarding very difficult. In what areas can digitalization be of help?

Regulation is more flexible now. You can onboard a banked customer from the ATM, but you can also onboard a non-banked individual through video-conferencing, for instance. By showing the customer’s face and the ID card, you can onboard remotely to the call centre and have an account end-to-end, which is opened in a few minutes.

The OCR technology is also being used by banks in their digitalization processes. For instance, for PFM and wallets, you just take a picture of your credit card. You can manage your loyalty card, your banking cards, your ticketing, every physical ID, thanks to your mobile and your digital camera, easily and without having to type anything.

The onboarding will not always be digital, as some people have not fully switched to digital. A mobile bank, called JiBun, in Japan, has switched to digital and has created a digital-only onboarding through the branches of Mitsubishi Bank of Tokyo and 7-Eleven outlets. Until such a moment, usually the first step tends to require physical authentication, while the second step can switch to digital. It enables to boost new mobile customers from the physical traffic to the digital channel and acquire new customers. However, most of the banks today do offer onboarding in a few minutes without leveraging too much physical networks.

The usual procedure is that you fill in a digital form and you are pre-onboarded. Then there are some legal security checks, especially if you don’t have an account. If you already have an account in the country, it is really something that takes a few minutes.

What is the role of mobile technologies and apps in traditional banks? Will mobile banking apps make physical bank branches obsolete?

I believe there are several situations where the branch is still needed. For instance, if you want to get a mortgage, it is quite complicated to do it online. Even if you have the ability to do it online or through the app, you may not trust that you will get the best rate doing it that way. Therefore, you may want to have a physical meeting with somebody after digital comparison engine usage.

Digital is great when you are used to doing it. Otherwise, you need to have somebody helping you and providing some recommendations, especially when it involves a lot of money.

Now, in terms of interactions, apps provide huge opportunities for the banks, because the frequency of the contact with somebody online using an app is 38 times higher than coming to a branch. It means that you have 38 times more opportunities to cross-sell something, as a bank. Therefore, it is important to see what is the share of mobile customers among your overall customer basis.

Apps are key, but now the issue is storage. If you do not necessarily have apps for your bank, because it is not something you do every day, it is something that you may want to do if you want to manage your accounts and aggregate your accounts in a PFM or in a wallet. The future is now for the ID services wallet, where you can: manage your ID, manage your personal data, see the split of your expenses and have all the services you need in one place, including shopping, parking, and more.

Payments can be boring and painful, with a very poor margin. So that is why payments are not something that you will see the retailer engaged with, right now. They leave that to the banks. But why are GAFA developing more interest in payments? It is because of the collection of data. Because when you have the details of the expenses, then you can once again predict the behaviour, the lifestyle and the needs of the customer, in order to supply offers. You can let the customer opt-in, of course, because we are in a GDPR world now (at least in Europe).

In your opinion, what are some of the main trends that are likely to change the financial industry in the years to come?

Definitely artificial intelligence. It will change the relationship with the customer, thanks to robo-advisory. It will make banks more proactive. It will democratise high-end services that are only reserved for private banking. It will enable more qualitative insights and analysis, as it is going to be done by machines.

The second big impact will be the cloud. I believe banks will move to the cloud, aggregate services and provide full marketplaces with services from multiple sources and third parties. And, since cloud providers are now much more secure than banks, it will help in this area as well.

What will be the main themes/topics covered during the upcoming Efma`s conferences?

In mid-June, in Paris, we have the SME Banking Conference and the Affluent and Private Banking Conference. We will hold common sessions, because when you are a SME owner, then you might also be a private banking customer. The next one will be in October 2018 in Lisbon, and it will cover innovative payments. It is called Efma Innovation Summit and it gathers all the new players in payments. All bankers in Europe are invited to the conference, with large companies – such as Alipay – as part of the programme, along with new banks and players, such as N26.

It will be interesting to also see the evolution of cryptocurrency as well as the innovation in peer-to-peer messaging payments.

I think all bankers who have an interest in the future of payments should attend the Innovation Summit conference in Lisbon, on October 15th until the 16th 2018. For more information, visit efma.com.

About Vincent Bastid

As CEO of Efma, Vincent Bastid is responsible for leading the organisation and setting its strategic direction, to maximise the benefits for its 3,300 retail financial services members, the largest retail banking network in the world. Immediately prior to joining Efma, he was Head of Benchmark and Prospective for the retail banking distribution at BNP Paribas, where he identified new revenue streams and service models based on cutting edge technologies. Vincent also spent more than 20 years at American high tech companies: ten years at Microsoft, leading marketing in education, finance, retail and services industries in France; three years at Apple Europe; and ten years at Texas Instruments, where he was in charge of the worldwide strategy for consumer products. 

About Efma

A global non-profit organisation, established in 1971 by banks and insurance companies, Efma facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. Over 3,300 brands in 130 countries are Efma members. Headquarters in Paris. Offices in London, Brussels, Barcelona, Stockholm, Bratislava, Dubai, Milan, Montreal, Istanbul, Beijing and Singapore.