How Banks Can Compete With Customer Experience

Cheyenne Noelle September 25, 2019 Finance

customer experience

As financial technology has changed the banking landscape, traditional financial institutions have increasingly focused on customer experience (CX) to differentiate themselves from the competition. Among the ways the financial services industry competes in delivering the best customer experience is digital transformation, user experience, and greater flexibility of services to consumers. 

The advent of FinTech

Technology has been revolutionizing the financial services industry for decades. Traditional banks have competed for customer loyalty with non-banking institutions, like PayPal, since the 90s. Today’s market involves the evolution of a much wider and niche offering of financial services, specifically within FinTech firms and open banking. Recognizing FinTech like cryptocurrency and digital wallets has created a rapid interest in removing the middleman (in this case, the bank) in currency transactions.

As consumers move toward more autonomy over financial power, banks have turned to digital transformation to offer personalized customer experiences tailor-made through automation. Maintaining and extending the value of traditional legacy systems is one-way banks are adapting to new market demands today. Enterprise resource planning (ERPs) and business process management (BPM) implemented on-premises or digitally is not new, but deploying on the cloud or as a hybrid solution is a major step in the right direction. 
Migrating core banking applications scale and automating processes across an institution is helping banks reduce costs and increase efficiency across their workflows, according to International Banker. By automating manual processes and connecting multiple disparate systems with end-to-end workflow solutions, financial institutions can offer a better banking solution to customers. 

Better UX yields stronger customer satisfaction

At the heart of digital transformation is UX, otherwise known as user experience. A platform is only as good as the UX it provides, and businesses that fail to diligently adhere to UX best practices may see their digital transformation strategy fall short. For financial services to remain competitive, digitization of services is not an option. The strongest customer experience strategy accelerates digital transformation projects, helping financial services win and retain loyal customers.
But UX isn’t restricted to just digital delivery. Lee Wetherington, Director of Strategic Insight at Jack Henry & Associates, Inc, believes that “companies are beginning to understand and appreciate the difference between ‘personalization’ and personal.” Personalization is typically data analytics-driven, whereas being “personal” refers to the human touch. Any successful customer experience umbrella strategy includes peak UX — something distinguished by the high level of personalization offered to make a product more functional and enjoyable to a user. That level of customization and focus on the user’s emotional journey using a product or service is how seamless UX is achieved. Great customer experience is a key driver to any digital transformation project.

Marrying the two concepts of data and UX can lead to the more personal touch Lee Wetherington envisioned. Using data to heighten the personalized aspect of banking is a huge selling point — especially when data influences how banks take action to customer requests, helping to upsell tailored banking solutions based on customer interests and spending habits.

In addition, the digital transformation to deliver better UX is a major way for banks to stay competitive. For example, Bank of America’s Erica — a personal assistant artificial intelligence (AI) bot that helps a consumer perform banking functions — along with Santander’s voice command banking function allows banks to get creative in their customer experience strategies. SMS can help reach more customers, therefore increasing the likelihood of converting those customers in the long run. Digital transformation makes banking solutions more accessible for customers while also providing them with personalized, seamless customer experience.

Great user experience both in-person and digital mediums are critical to outweighing competition in a volatile market. Considering business model innovation is a leading business trend for banking in 2019, banks can consider the role of UX paramount to the success of their customer experience strategies. James Buckley, Vice President of Infosys Finacle, believes that banks will continue to build their products using open APIs following the open banking legislation of 2018. This year and beyond, banks will evolve their roles as product manufacturers, marketplace operators, distributors or “a combination of the three,” according to the Global Banking and Finance Review.

Flexibility to meet customer demands

Services provided by Mint, CashApp, Venmo, PayPal, and others have the immediate advantage of flexibility. By starting out digital, these products meet customers right where they prefer: either online or via mobile application. On one hand, using apps or online banking is a major plus when searching for a bank for Millennials. On the other hand, banks are using branches to offer an extra layer of accessibility that these apps lack.

Branch visits may not appeal to the tech-savvy customer, but the rest of the population is more familiar with in-person interaction. Bank branches can even appeal to the digital native as a competing factor due to the high-touch aspect of in-person customer service. Millennials — who are expected to outnumber Baby Boomers as America’s largest generation this year, according to U.S. Census Bureau projections — expect just as much of seamless customer experience as their mobile apps.

As American Banker puts it, Millennials wants banks to be their “overall financial caretaker.” Customers want financial counseling and personalized recommendations when they need it most, but will judge a bank on its digital offerings. Providing services in several channels, in as many mediums as possible, allows a bank to deliver around-the-clock CX as their mobile app counterparts. For financial services, adding greater flexibility to service offerings is a huge advantage against impending competition.

Tomorrow’s financial landscape

Banks and FinTech firms are fighting for customer loyalty, using customer experience strategy as a powerful way to one-up their competition. Rapidly evolving technologies are changing the way these firms, apps, and banks operate and communicate with customers, helping them to remain flexible and more user-centric. If financial services want to exceed customer expectations, leveraging resources available in the market will provide the best possible competitive advantage.

ProcessMaker specializes in optimizing core operations for banks seeking to deliver the best customer experience possible. Find out how your financial services institution can stay ahead of the competition with our automated workflow platform at www.processmaker.com

About ProcessMaker:

ProcessMaker is a low-code business process management and workflow software.  ProcessMaker makes it easy for business analysts to collaborate with IT to automate complex business processes connecting people and existing company systems. Headquartered in Durham, North Carolina in the United States, ProcessMaker has a partner network spread across 35 countries on five continents. Hundreds of commercial customers, including many Fortune 100 companies, rely on ProcessMaker to digitally transform their core business processes enabling faster decision making, improved compliance, and better performance.

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