We live in an experience economy. Most customers select that supplier that delivers the best service, especially in high competition markets. Since digital has changed our society, products have morphed into services, and customer experience plays a key role in people’s attitudes towards brands. This applies to any industry, but especially so to financial services, where many of the products banks offer are similar to their competitors’. As Brett King argues in his book ‘Bank 4.0’, “the banking system we have today is a direct descendent of the banking from the Middle Ages”. In his book, King asserts that products, bank departments or channels are not what customers seek from a bank. What they do need is utility and functionality. To deliver an excellent customer experience in banking, banking services should be as accessible as tap water, electricity or the internet.
In our digital age, financial services companies will not differentiate themselves with core products. Customer experience in banking, ease of use and comprehensiveness are the qualities that matter now. Fortunately, there are many areas where banks can improve on these topics.
Read on to find out how:
When people get married, many hire a wedding planner, who takes care of all contacts and contracts: catering, room rent, invitations, flowers, possibly even the organization of the stag night. When people build a house, many work with a general contractor to outsource the coordination of carpenters, plumbers, electricians, etc. Wouldn’t it be perfect if a bank could play the same role at the decisive moments in people’s lives? When buying a house, banks currently restrict themselves to offering mortgages, and possibly some insurance on top of that. But what stops them from also taking care of the registration of the sale, helping find the best utilities company or even detecting the best moving company?
Banks are currently already expanding their offering to include non-financial services from third parties and by forming customer-facing ecosystems. By participating in a network of interlinked companies, financial services institutions can work together to deliver a value proposition that meets customers’ core needs, delivering optimal customer experience in banking. Open banking and regulations such as PSD2 (Payment Services Directive) are forcing banks to open up to third parties, accelerating the collaboration between financial services and other service companies.
When customers engage with these ecosystems, they expect seamless connectivity between the services of different companies, having to authenticate only once to gain access to applications. Identity and access management (IAM) can help establish these seamless connections, while guaranteeing maximum security.
Consumers have traditionally been faithful to their bank, and the percentage that switch from one bank to another is lower than the number of people trading in life partners. Why is that? Well, sometimes, it is extremely hard to become a new customer at a bank, and there is simply too much paperwork and too many data to be entered. Sometimes it’s even a cumbersome process to sign up to a new service at your bank. Fortunately, digital onboarding is becoming the norm. With digital onboarding, ‘wet signatures’ are no longer required, and customers can offer digital proof in the form of a digital identity. This changes onboarding from a back-office function to a sales and marketing opportunity.
Digital onboarding to improve customer experience in banking makes a huge difference for customers and financial institutions.
Online forms take less time to process than paper forms, and are actually more attractive to customers.
How many times have you been frustrated when having to repeat your birth date time and again, knowing that the organization already holds your address, date of birth and marital status? When done well, digital onboarding will ensure these crucial data are already filled out.
Filling out paper forms is not only time-consuming, it’s also prone to errors that someone else needs to correct afterwards. Digital onboarding – certainly when some data come pre-filled – does away with that.
Any baby boomer can tell you about the relationship he had with his bank manager. Until a couple of decades ago, customers and bank managers knew each other on a personal level. Bankers were no different than teachers, doctors, grocers or the village priest: they talked to their flock on a first-name basis, knew their children and spouses and their favorite pastime. Although the level of interpersonal interactions has changed and a growing number of people no longer set foot in their bank branch, retail banks still have the same in-depth knowledge of their customers. Only: that knowledge is too often hidden in databases and waiting to be explored to enhance customer experience.
Digital technology allows financial institutions to personalize all interactions with their customers, knowing in what stage of the buyer journey they are and predicting what their next move might be. Author Chris Skinner (‘ValueWeb’, ‘Doing Digital’) predicts ‘Semantic banking’:
“The semantic bank will prompt us with the things we need and warn us against doing things that will damage our financial health. It will be personalized, proactive, predictive, cognitive, and contextual. We will never need to call the bank, as the semantic bank is always with us, non-stop and in real time.”
While we should not hold our breath for this level of personalization, it will arrive one day. And it will help improve customer experience dramatically.
Retail banks hold a wealth of information on customers in the form of attributes that can be used to offer a personalized experience. These attributes identify a user and can be called upon when a higher level of authorization is needed, for instance when transferring larger sums than usual or when consulting certain applications.
The bank branch has lost ground as a communication channel between retail banks and their customers. In most countries, the number of bank branches has been divided by three in the last 25 years, a trend that digital transformation is only accelerating.
Banking clients now have many more channels in which to perform financial transactions: first came PC banking and, since the advent of smartphones, customers now constantly carry their bank around with them.
Customer experience requires retail banks to offer a similar service through these different channels, allowing the same authentication mechanisms and offering the same level of service. Omnichannel also means that customers can gain transparent access to all the banking services they subscribe to, without going through the hassle of authenticating again. Silos were invented to store grain, not to become an organizational principle.
Banks hold a wealth of information on their customers. It is not only important to protect this sensitive client information, banks also need to be transparent on what data they possess and what they are doing with them. Financial institutions have gained in trust after having lost it during the financial crisis a decade ago, and keeping that trust is high on every retail bank’s priorities.
Open banking and PSD2 offer banks a myriad of opportunities to monetize client info, for instance by sharing information with commercial partners. By analyzing spending patterns, banks can potentially let airlines know which customers are open to upgrades, or advise electronics retailers on who can afford the most expensive TV sets. Monetizing data is like walking on a tightrope, keeping a balance between business opportunities, and retaining customer confidence.
Identity and Access Management (IAM) systems are a key player in protecting customer assets and by making the process transparent. Customers can give and revoke consent and always keep control of their data.
Identity and Access Management (IAM) is instrumental in combining airtight security with maximum customer experience. TrustBuilder has a track record in letting its customers play by their own rules. If customer experience is a top priority at your financial institution, here’s why TrustBuilder should always be on your IAM shortlist.
Our flagship product, TrustBuilder Identity Hub comes with a long list of plug-and-play connections to a host of service- and identity providers. What’s more: our Workflow Engine allows you to seamlessly connect to new ecosystem partners. This makes it easy to set up new connections with third parties and stay ahead of the competition with regard to ecosystem expansion.
TrustBuilder Identity Hub manages access for everyone to every system. Thanks to the use of Attribute-based Access Control (ABAC), banks can create their own attributes to authenticate users.
But to really capitalize on the data they own of their users, banks can assign attributes to basically any information they have on their customer and exchange it with partners to truly enhance their ecosystem and valorize their data capital.
TrustBuilder has proven experience with different authentication methods and identity sources, allowing banking customers to bring their own authentication (BYOAuth).
Thanks to its open and scalable architecture TrustBuilder Identity Hub delivers fast and cost-effective deployment. Tools for visual workflow creation and policy-based user journey building facilitate easy mapping of the user journey and the addition of new use cases. TrustBuilder leverages the collective innovation of the financial services industry and comes with standardized workflow configurations and out-of-the-box connections that deliver built-in expertise and reusability.
All financial institutions are heavily involved in their digital transformation. But the transformation should not stop there: what retail banks need in order to gain and retain customer trust is an experience transformation, leading to customer experience in banking. By betting big on customer experience, banks can gain an edge on their competitors that do not see customer centricity as a top priority. Identity and Access Management (IAM) is key to combining a great customer experience with airtight security.
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