Winning by putting the customer first and technology second - What you need to look out for

Wednesday 29 June 2022 10:45 CET | Editor: Alin Popa | Interview

Miriam van Straelen, Partner at Roland Berger, provides the recipe for an amazing customer experience and describes the main CX trends in banking and fintech.

Just to start off we would love to hear about your background and career path that brought you to Roland Berger N3XT (the Digital Platform of Roland Berger).

Fun fact - My career started at Roland Berger, at that time as a junior consultant. I was in consulting for about 5 years and then spent the next 15 years in various international management roles for example at eBay, the eBay classifieds group, PayPal and most recently as CPO at Verimi GmbH (Digital Identity Management and Payments provider) and CCO at the price comparison platform idealo. 

I can say that throughout my career, I have experienced a wide variety of perspectives and their challenges - mainly within the digital space, something that is very beneficial for my current role at the strategic management consultancy Roland Berger and that helps me understand and support my clients in the best possible way. 

What, in your opinion, is a successful customer experience? 

A successful customer experience (CX) is all about human centricity and putting the customer first. Most companies and people know this and fully agree – however, you would be surprised at the extent to which companies are NOT looking to understand their customers. Too often managers will make assumptions, thinking they know their target group well enough. Usually, they don’t! But to answer your question: You have achieved a good customer experience when customers don’t have to think about their journey very much and it happens intuitively. You have achieved a very good customer experience once customers have turned into loyal and returning customers, speaking positively about their experience to friends and family.

In order to achieve that, you need to truly understand what customers need, what their pain points and joys are, and then, in step two, think about what technological solution needs to be implemented. This is very important: Do not put technology first! There are so many great technological solutions on offer - the by far larger challenge is to really understand the needs of your customers. Customer expectations are very high and fast moving, so getting it right and adapting quickly is key. 

What are the latest trends, best practices, and developments in the areas of customer experience and customer retention in banking? 

According to a Gartner survey, 81% of companies compete mostly or completely on the basis of CX, making CX a key competitive differentiator for financial institutions in 2022 and beyond. 

I see the following main customer experience trends in banking: 

1. Advisory Services

With the rise of neobanks and financial platforms customers more and more seek online advisory services. This gives banks the perfect opportunity to improve the financial services CX by pairing their customers with in-house financial advisors who can provide advice tailored to each customer’s needs. Also in financial services, hyper-personalisation is a key trend.

2. Automated Onboarding 

Online banks lose most of their potential customers during the onboarding process. Due to regulatory reasons, this process requires a lot of input and it is very important to make this as seamless and intuitive as possible. In order to compete, banks need to focus on offering a very smooth, easy and convenient onboarding process. By digitising the onboarding process, modern banks cater to the preferences of their customers to get things done with only a few clicks. From there, banks can use automation to expedite key parts of the process, so customers can open their accounts much faster, further enhancing the overall CX. The quicker, intuitive, and seamless a customer journey takes place the better the conversion.

3. Embedded Finance as a differentiator 

Embedded finance has changed customers' expectations. According to Forbes, the market volume in 2020 was around EUR 22.5 billion worldwide. Banking (services) as a software have therefore become very attractive offerings for banks and fintechs and the integration of financial products such as insurance, loans, and guarantees as a part of the purchase of a product or service, offered seamlessly across the buying journey and/or at the point of sale as part of a native feature of the customer journey have become very common. The use cases and areas for implementation are nearly endless. Embedded finance will become the norm – a good customer experience (intuitive, seamless, etc.) again will be the key success factor for differentiation.

A good example is the Finanzguru cooperation with Deutsche Bank. But there are probably many more examples where these types of partnerships did not work out. Having a joint vision in regards to the outcome of the partnership and aspiration regarding the value creation for the customer is crucial.

The race to reinvent the payments landscape to meet changing consumer demand and expectations is heating up. How is customer experience helping payment companies and banks to differentiate? 

Both banks and payment companies are operating in an extremely dynamic and competitive market environment. 

I see three dimensions that need to be addressed: 

a. Intuition & Convenience. As previously mentioned: providing a frictionless, intuitive, and convenient journey for consumers using digital services - but this nowadays is a given. What has become more important is

b. Adding true value to the customer. Banks and fintechs need to look beyond the normal customer journeys and look further. Customer Journeys need to be human centric, rather than customer centric. “Customer Driven Innovation” is one of my favourite methods to identify hidden gems. The beauty of being truly customer centric is that the winning solutions are all out there - looking and listening closely enough is the challenge. Most companies think they already know the answers and then cut corners.

c. Last but not least - the absolute foundation of everything is purpose and trust. Modern day companies need to have a strong purpose and be authentic and credible. Customers often make their decisions based on “gut feeling” which is usually very hard to define or detect. The employee experience by the way comes into play here as well. Besides marketing & PR, employees are the ambassadors that need to love their company and their products / solutions!

To better compete with new industry entrants, traditional banks need to capitalise on new money movement capabilities and offer multiple payment methods to provide the best customer experience possible. What are the opportunities? 

Absolutely! Traditional banks need to reinvent themselves and many are in the process of doing so already. But there is still room for improvement.  With the strong market share of companies like PayPal that have made transferring money very simple and convenient - expectations are high and customers want more options to use financial services. Customers do not want to have to pay extra for instant payments and they for sure do not want to have to read the fine print to learn about the fees for the service. But besides this - as always, it depends on the industry you are serving, your target audience and their use cases. A maximum of payment options is not always the best way forward. Too many options can have a negative impact on conversion rates. 4-5 payment options in national ecommerce are fully sufficient, whereas in the Gaming industry 20-30 payment options are often the norm and required to increase conversion rates. 

Providing a frictionless, convenient, and safe payments journey for consumers is key. How can banks deliver value-added CX beyond the purchase point? 

Offering further options within a payment method, for example flexible due dates for the payment in a buy now pay later (BNPL) scenario or transferring a payment upon invoice transaction into a credit transaction can be very value adding. Understanding the needs, worries and delights of customers as well as the context they are in (this often depends on the industry, the use case, the target audience) is key to offering the right products / solutions / services at the right moment. Another example would be dunning and receivables management. The CX involved in this process can make or break your relationship with a customer. In-depth data analytics and AI are the key to success. There are too many data points, too many options and potential scenarios for easy scenario planning to be done. Strategy, Marketing, Sales, Product, and Development Teams need to move closer together, find their common purpose, break down silos and dive into the data. 

What are the most common payment pitfalls impacting customer retention?

Money is a delicate topic and can mean so many different things to different people. Getting the basics right is a prerequisite. What do I mean by this? A fundamental level of trust, safety, and security is non-negotiable. Customers will not reward a bank or fintech for getting this right. However, if things go wrong on that front - then you are in trouble. But in order to retain a customer, you have to get more things right and this is not only about a good, seamless, intuitive and convenient journey. The moment of truth lies in those situations where something does not go as expected or where a customer is in a financial tight spot. Being there for the customer, being empathetic, taking a weight off the customers’ mind - is the moment where you will generate a lifelong fan.

The pandemic has accelerated digital transformation for the banking industry across all areas, and none more significantly than the CX space. The digitisation process has been fast-tracked by the pandemic, and customers expect their banks to provide omnichannel, seamless delivery of every option. How are banks adapting to these changes, and what lies ahead for CX?

In my opinion, the pandemic has not only changed customer behaviour and expectations but has also exponentially increased the speed at which developments are happening. But it is not only about becoming accustomed to the greater speed but also about being able to focus on the most relevant aspects and staying resilient whilst becoming more agile and flexible at the same time. Does this sound like a contradiction? Resilience and Agility at the same time? It might have been a contradiction in the past - but it has become a reality today. If you ask me - these are two key ingredients to today’s success, and they have little to nothing to do with technology (technology is however an enabler for efficient agility) but rather with mindset and culture. So, the best way to adapt is to have the right people with the right mindset on board.

According to Bloomberg, the number of Gen Z employees in the US  is projected to grow to 51 million by 2030. Fintechs are already rolling out innovative solutions that are gaining traction among Gen Z. How can banks prepare for the future and reach younger customers?

Banks need to be where their target audiences are and offer solutions that are relevant to these. Gen Z customers are accustomed to sending money via PayPal or Venmo. They are accustomed to paying at the POS with their mobile phone or their smart watch and authenticating the payment with a biometric factor. They also do not want to have to verify their identity by sending a form by mail or even by undergoing a (still) cumbersome process through video identification. There are simpler ways of doing things and the Gen Z knows about these. They are not used to settling for less and neither should companies hoping to stay relevant to Gen Z - or should I say metaverse?

About Miriam van Straelen

Miriam van Straelen has 15+ years experience in leading positions in the digital industry (including ebay and PayPal).
She is a strategist who develops practical solutions focused on 2-digit growth and delivering multiple large-scale projects ranging from design, launch, growth and scaling of digital products and businesses in B2C, B2B and B2B2C environments in Fintech, e-commerce, marketplaces and platform economies.  

As a founder and corporate executive, she feels comfortable working with start-ups and multinational companies alike. Inclusion and diversity are very important to her and she actively supports and hopes to inspire young women to make the most of their career lives.

About Roland Berger

Roland Berger is the only management consultancy of European heritage with a strong international footprint. As an independent firm, solely owned by our Partners, we operate in all major markets. Our employees offer a unique combination of an analytical approach and an empathic attitude. Driven by our values of entrepreneurship, excellence and empathy, we are convinced that the world needs a new sustainable paradigm that takes the entire value cycle into account. 

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Keywords: customer experience, digital onboarding, embedded finance, BNPL, digitalisation
Categories: Banking & Fintech
Companies: Roland Berger
Countries: World
This article is part of category

Banking & Fintech

Roland Berger

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