Three Areas of Innovation in Channel Banking
Author(s): Jeremy Smeddle, Posted on December 3rd, 2014
It is an imperative rather than an option today: banks are investing heavily across multi-channels to enhance customer engagement and experience. Taking cues from online retailers, banks are ramping up their websites with features such as personalized pages and intuitive navigation, to enhance customer experience. The traditional brick-and-mortar retail branches too are moulding more into advice centres, as customers are encouraged to use self-service terminals to do everything from transferring money to depositing cash or checks. Mobile banking is leap-frogging online banking, as banks turn to a “mobile-first” strategy to provide more secure and an easier-to-use banking payment services. But is that enough for banks to differentiate their products and services? Especially at a time when customer preferences are evolving with technology as a key driver. The digital customers of today are looking for their banks to deliver a unified, inter-connected experience across branches and devices.
The next wave of innovation in channel banking is one that brings together social media, mobile, and cloud technologies and is not limited to improving the existing channels in isolation. It’s more to do with the convergence of physical branches and virtual channels to create a seamless, more secure and cohesive customer experience. Unisys believes that banks and financial services organizations need to renew their focus on three core areas of customer service – Frictionless Banking, Digital Customer Service, and Intelligent Personal Budgeting – to revolutionize and transform multi-channel banking. Let’s delve into these areas more deeply:
What is friction in banking? It can happen at any point of a customer interaction where there is inertia or delay when attempting to carry out transactions. For example, a long and cumbersome identification process, when a customer can be quickly identified using biometrics. Friction can build up resistance and cause a customer to delay or cancel a transaction, and could ultimately drive them away from the bank. It could also mean having to repeat information which you have already entered through a different channel.
Picture the scene – You walk into a branch and are approached by a branch worker who already has your details loaded on their tablets so that they can immediately respond to your service request. You are identified by a facial recognition scan as you enter the branch, and as an existing premier customer, are singled out for exclusive treatment. Using this information, banks can offer customized services based on your needs and provide interactive, highly intuitive services.
Frictionless banking delights the customer, by completing a transaction faster than they anticipated, with fewer steps, or by providing value added services. It becomes even more essential in a multi-channel banking environment. You may be in the branch, but your mobile phone can be used to help identify you using out-of-band technology in preference to a chip and pin reader using contextual information or unique MFA capabilities.
Digital Customer Service
The digital transformation is well underway in banking. Until recently, branches were considered the preferred method for delivering face-to-face interactions and selling complex products. But that’s quickly changing. In today’s digitally connected world – governed by web technologies, big data, mobility, social media, and smart devices – banks are increasingly looking towards transforming customer experiences as a key differentiator in the marketplace. But how can they move closer to the customer in the era of remote banking?
To put it simply, by envisioning a customer centric strategy which revolves around gaining valuable insights about customer behaviour and preferences, banks can leverage social media platforms to engage users and mine data to build multi-channel experiences. Customers like to research products themselves. By gaining insights from their online activity, banks can understand a lot about their requirements, and then contact a customer through social media channels to suggest a product and then follow up with a web chat, with document capture via tablet, and final approval through the online bank.
Intelligent Personal Budgeting
The digital revolution is breaking down the traditional barriers of the bank – bringing them closer to user preferences across channels. But what could be the next level of enhanced customer service across multi-channel banking? How can banks provide smarter, more interactive, and highly personalized services to drive deeper customer intimacy? One way is a virtual assistant that takes into account contextual information to engage customers, uses data-driven insights to offer personalized services, and just like a real advisor, makes personal recommendations on investment decisions and savings.
For example, an Intelligent Personal Budgeting app will send you alerts if you are spending above your budget during a particular month, something that might otherwise escape your attention, until it is too late. The virtual assistant can monitor your account and help you stick to your budget, by analysing your typical spending patterns, and what impact a purchase might have on your savings plan. The app also allows you to stay in control of your account by notifying you of unusual spending patterns and sending security warning of any suspicious activity. It could be as simple as a shop keeper ringing up the wrong amount, or a transaction being mistakenly processed more than once.
So in summary, the new digital banking uses digital intelligence to improve the overall banking experience, and employs mobile technology to complement other channels rather than just replace them. In addition, by using a combination of big data and digital intelligence, the bank can offer advice at the right moment – definitely before you think you need it! Rather than driving customers to the cheapest channel, the modern bank can use digital technology to deliver a level of service once reserved for their wealthiest customers.