Author: David Webber
Social and digital technologies have been revolutionising customer engagement since the dawn of the digital age. However, now more than ever, there is increasing pressure on companies and institutions, in particular the financial service sector, to improve how they interact with their customers. With such a wide range of demographics to consider, it’s vital that banks use all the tools and resources in the digital armoury to create the competitive edge.
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When it comes to meeting expectations, 93 per cent of us agreed that our banks and the services they provide were satisfactory in 2016. However, with the rise of challenger banks and the resulting greater choice in the banking sector, as well as an increasing regulatory focus on improving customer-centric service, being able to engage the customer has become vital.
So, what do banks need to do to ensure customers remain engaged? Firstly, a seamless user experience is an absolute must. Banks must put themselves in the shoes of the customer and follow every step of the journey to confirm that all aspects are adding value to the process. A multi-layered approach is one way of producing this seamless experience, and using open Application Programming Interfaces (APIs) will be one way to achieve this. With the upcoming enforcement of the Payment Services Directive (PSD2) in January 2018, customer data will be accessible by approved third party providers via open APIs in a regulated way. This is in line with recommendations put forward by the UK Treasury for banks to become more open with their data in order to encourage innovation and competition in the sector. Open APIs are not a new concept – innovative companies like Facebook, Amazon and Apple have all adopted open APIs to improve various aspects of their businesses. Of course, strict regulation around this will be necessary, since financial data is highly sensitive, but it is a step in the right direction towards improving the customer experience – and challenger banks like Mondo and Atom are already on board with the technology.
Artificial Intelligence (AI) and the introduction of chatbots, which were a hot topic in 2016, will continue to be a key aspect of the customer experience revolution, with an increasing number of organisations adopting them in some form. This technology will continue to develop, and virtual assistants will become more sophisticated at providing information and answering customer queries. RBS, NatWest and HSBC already have some form of chatbot technology, however KPMG predict that, by 2030, virtual assistants will largely have taken over and will inform people on both personal and financial obligations. It remains to be seen how effective these assistants will be at handling more complex queries, however they could be a huge asset in dealing with day-to-day queries and, as the technology evolves, creating a truly seamless and multi-functional experience.
Another way banks can maintain customer engagement is to use big data to create an increasingly personal experience. While some banks are doing this already, there is an enormous opportunity to provide customers with relevant and personalised information on everything from fee updates to payment notifications, and even making recommendations on how to save more effectively, track spending, and flagging new interest rates.
Customer engagement is a fickle business, and companies need to innovate constantly to ensure this is maintained by integrating digital banking technology seamlessly. In a society where technological change is the norm and modernisation is expected, banks need to embrace new technologies, like open APIs, and work harder to analyse and use customer data to provide pertinent information and recommendations to their customers.