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Customer centric banking in the digital age

What makes a customer relationship successful today? 20 years ago, it was the small talk held at the local bank counter. In addition to attractive market conditions, personal contact was the core of every trustworthy customer relationship and the only way to create a positive customer experience. Today’s digital economy exchanged the original counter with smartphone and computer, and the formerly personal discussion turned into digital dialogue via e-mail and live chat.

More and more bank branch offices are closing, which is intensified by the increasing cost pressure, but above all by the centralisation of processes. This represents a new challenge for the banking sector, as the relationship between bank and customer must now be maintained online. For this reason, financial institutions are forced to exploit the potential of digital solutions to maintain personal service and increase customer loyalty. Accordingly, products must be developed and offered to meet today’s consumer needs.

Consumers need a positive experience to buy more, be loyal and share the positive occurrence with friends. To offer exactly this to the customer is the ambition of every banking institution. But which values turn a buying experience into a positive one? The answer is relatively simple: speed, comfort, consistency, friendliness and a human component creating a connection. Therefore, the biggest challenge is to provide your employees with technological tools helping them to create individual customer experiences. Through the use of digital solutions, bank customers experience previous processes faster, more conveniently and above all, more individually. This gives them a positive experience.

For banks, the increasing digital competition can become the secret formula for sales-oriented growth and increased earnings. Banks are forced to increasingly engage in digital interactions with their customers and have recognized the need to adapt the role of the branch office to this new situation. It is essential to put the customer at the centre of all actions by developing and offering products and services that meet the needs of new and existing clients.

FinTechs support the financial industry to meet the challenge of transforming their services from offline to online as they offer modular components to enhance the customer’s experience and simplify processes. The integration of the components provides a massive time advantage compared to the classic in-house development of financial institutions executed in previous years.

In order to achieve successful results in the new digital environment, existing products must be modified and adapted to the new requirements of customers. Studies show that 48% of retail banks already sell their products digitally. The demand exists and is the base of technological developments enabling digital banking has also been created. All the basic prerequisites for digital communication and simplifying processes for the bank’s customers are already in place. Additionally, financial institutions are able to benefit from the use of digital solutions by using the resources gained for optimisation. This gives a bank the opportunity to further improve their own offers and remain competitive. Technical support and process automation make the work of employees much easier. They gain time for qualitative tasks with the elimination of monotonous ones. Existent know-how can be used way more efficiently and the profitability of the bank increases.

How will financial services and products be designed in the future? The beginning of a customer relationship is of great importance for the further course. If it fails at the outset, the prospective customer immediately runs to your competitor offering services that meet his requirements. For example, if a loan with Bank A can only be taken out at its branch office or during limited business hours, the customer might choose another bank offering a 24-hour service as well as completely digital loan agreements. For this reason, digital identification and onboarding processes are becoming increasingly. Financial services must become more and more individual. Customers want fast, convenient and uncomplicated advice that is professional and, above all, individual.

Banking institutions should focus their investments on offering financial services that make important interactions effortless. In the future, all process steps that were previously carried out analogously will be digitised. This will result in higher conversion rates and provide customers with an innovative banking service that facilitates the entire process and creates a positive experience.

By using the right technology, customers can be optimally served at every touchpoint and the conversion rate significantly increased. From the classic branch office situation to the point of sale of a sales partner to the home couch, a seamless customer experience can be presented at any time. The customers gain the highest possible degree of freedom and flexibility – while banking institutions can control and automate the process according to the situation. The processes are carried out by the bank with the least possible personnel input or even no personnel input at all. The art for many banks is not only to implement this omni channel strategy as a target-oriented approach, but to remain true to it. Digital sales channels and existing customer support depend on continuous optimisation within the shortest cycles possible!

Nathalie Gellert,
2nd of October, 2019