Removing friction from the customer journey has been ranked the most important focus for the banking industry in a recent report into the most important banking retail banking trends in 2018.
Banking priorities revealed:
According to the influential Financial Brand’s ‘Top 10 Retail Banking Trends and Predictions for 2018’ report, compiled from a global survey of 100 leading financial service industry experts, banks are most focused on:
- Removing friction from the customer journey (61%)
- Improving the use of data and advanced analytics (57%)
- Refining multichannel delivery (42%)
However, if these predictions sound familiar to you, it is probably because they are. In the Financial Brand’s previous years report looking at ‘The Top 10 Retail Banking trends and predictions for 2017’, the top three issues were:
- Removing friction from the customer journey (54%)
- Use of big data, AI and advanced analytics (53%)
- Improvements in integrated multichannel delivery (45%)
The predictions for 2017, and their continuation through into 2018, highlights the direction in the way banks are operating. In fact, removing friction from the customer journey has come in the top 3 predictions for the past 3 years, showing that we’re truly in the ‘age of the customer’.
So, let’s take a closer look at those top 3 predictions and see what they reveal.
Prediction 1: Removing friction from the customer journey
The banking industry has talked about improving the customer experience for decades, however legacy systems and product and operational silos have meant that change has sometimes been slow.
Although in principle many banks now recognise the importance of CX, it can often be difficult to prioritise the customer when faced with other competing objectives, like cost reduction – a major focus for banks facing increasing costs. For financial organisations to change this dynamic and meet the evolving needs of today’s customers, there are five key areas for improvement:
- Move digital engagement focus from cost reduction to experience enhancement
- Leverage advanced analytics, machine learning and contextual engagement to provide a highly personalised experience
- Allow the consumer to engage with their bank on the channels they prefer at the times they want to engage
- Transition advisory and sales activities from being reactive to being proactive
- Engage end-to-end throughout the customer journey, from shopping to account opening, to onboarding and through relationship expansion
Prediction 2: Expanding use of data and advanced analytics
Banks that utilise the power of contextual insights and the potential of digital transformation will gain a significant advantage over their competitors who fail to do so.
The potential of data and advanced analytics to disrupt the way industry leaders do business is huge. The expanding use of data means the accuracy of predictive models can be improved, leading to a highly personalised experience for the customer, while having the added benefits improving compliance and reducing costs.
This will help banks to meet the ever-increasing demands of empowered customers. In fact, according to IBM, 54% of customers would consider ending their relationship with an organisation if they are not given personalised content and offers, meaning personalisation is no longer a nice to have, but a necessity.
As a result, expanding the use of data and advanced analytics are most likely going to become a bigger and bigger asset for financial institutions in the future.
Prediction 3: Improving multichannel delivery
In 2018 banks will see less than half of their customers face-to-face. With a plethora of channels and devices available to them, banking customers clearly have many choices.
The role of banks in this new era is to provide these choices and importantly to facilitate easy movement between them as the customer journey demands. As the customer base is becomes increasingly digital, banks will use self-service touchpoints for linear transactional journeys and then will rely on contact-centre agents or branches for complex engagements.
This movement towards digital channels will mean that branch and contact-centre interactions are more important than ever when banks are building human relationships with customers. But interestingly digital tools shouldn’t just be isolated to digital channels and banks now can augment traditional service agents with technology. Those that do so will enable agents to answer queries quicker, and through training staff Banks can ensure that they are better equipped to use these tools and present better responses to inquiries.
In the past convenience in banking has referred to the proximity of the branch to the customer. But now with the growth of digital technology, online and mobile banking, convenience no longer just refers to the physical location. Although convenience is a big factor when it comes to first contact it is not nearly as important as it once was. According to the Novatus study, ‘most shoppers are now in segments that either don’t use bank branches, don’t care much for branches … or both.’
This article by the Financial Brand has given extremely helpful insight for what we expect to see in the banking industry in 2018. These predictions not only show what is the most important for banks over the next 12 months but reinforces ongoing trends within the industry.
Industry leaders are already starting to address the predictions and trends highlighted in this article. As CX becomes an increasingly important point of differentiation, the gap between leaders and laggards will continue to grow.
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