Disruption is hitting every vertical and financial services is no exception.
The World Economic Forum recently released a report titled "The Future of Financial Services: How disruptive innovations are reshaping the way financial services are structured, provisioned and consumed" (pdf) in which it states, "Disruption will not be a one-time event, rather a continuous pressure to innovate that will shape customer behaviors, business models and the long-term structure of the financial services industry."
The report provides a helpful taxonomy for the functions within financial services that are being disrupted. It uses six global categories, which can be broken down into separate disruptive themes. Fintech companies play a part in the disruption, making inroads into traditional financial services markets by changing the rules of the game. One example is the world of Payments, where disruptive forces could be categorized as Emerging Payment Rails and Cashless World.
Combined with the "continuous pressure to innovate" and the increased OpEx outlay to comply with Federal and International regulations, the financial services market has to perform perfectly in a variety of channels or risk losing their customers. That's the summary of a recent Gallup survey of 6,000 financial services clients.
Customers increasingly favor digital experiences over in person interactions (53 percent pro digital over 47 percent for in person). But if a bank doesn't offer the right experience — be it digital or in person — when the customer wants it, customer engagement falls off by 47 percent. And Gallup writes, "Engagement… drops — by 40 percent — when (customers) give a less-than-perfect satisfaction score to even one of the channels they use." This means that even if a client prefers digital interactions and rates those experiences as 5 out of 5, if they rate the in person branch experience at 4 out of 5, their engagement drops by 40 percent.
There's no margin for error when it comes to customer experience in financial services. It is not a "nice to have." It is a must have discipline. And in order to provide consistently excellent customer experiences it is necessary to break down the elements of customer experience.
Three Dimensions of Financial Services Customer Experience
The most basic dimension of customer experience (CX) is the transactional level. Transactions can be further split into two categories: discreet interactions (e.g., getting a signature notarized) or transactions that are part of a larger process (e.g., dropping off a W2 at a branch for a mortgage application). Discrete interactions are not always part of a larger customer experience (although they might be). But the majority of transactions a customer conducts with a bank are part of a larger customer-bank relationship.
Processes make up the next dimension of CX (e.g., account opening, 401k rollover, loan application, etc). Think of processes as a set of interactions that work in concert to help a customer achieve a goal.
And finally, the third dimension of CX — the relationship. This is the entire customer lifecycle management, made up of every interaction between the customer and bank over the course of multiple transactions and/or processes.
Gallup's research pointed at the importance of providing excellent CX across channels, both digital and personal. This is equally true across the three dimensions of CX outlined above.
CX is cumulative. I can't have a good process experience if I don't have a good transaction experience. And the complete experience will fail if either of those two areas fail. To complicate things further, consumers increasingly demand convenience. They want the option to complete a process doing some transactions via digital channels and others via personal. Banks will need to provide seamless experiences across multiple processes via personal and digital channels.
This is one of the more exciting information management areas in banking and financial services. A growing trend has been to move more of the process workload "upstream." This provides several benefits:
- Ingestion solutions cost less than BPM or workflow engines
- Ingestion solutions that can establish missing information early on in an application process can notify the customer and complete the application before it's passed to more expensive systems and knowledge workers
- Ideally, ingestion solutions can pass along the completed elements of an application as finished to begin processing
But technology is only the first, and unfortunately, the easiest part of the puzzle. Modern banks and financial services firms are burdened with legacy applications that are not easily decoupled from current processes. Savvy organizations are beginning to plan interim solutions to tie together their legacy portfolio while standing up next-generation capabilities to delight their customers.
What do you think about the challenges banks face — be it in information management or customer experience? Start the conversation below!