Opinion: The real ‘digital opportunity’ in banking
- May 21, 2015
For most of us, banking is a ‘grudge purchase’. We don’t wake up in the morning and look forward to paying accounts, drawing cash from the ATM, or buying airtime. Our interactions with our bank’s call centres or branch staff generally relate to some type of problem that’s occurred.
Since the collapse of the global economy in 2008, and the multibillion dollar bailouts that ensued, our faith in banks has been shattered.
Almost a decade later, they’re still struggling to regain lost trust. In the years since 2008, much has been said about the possibilities that digital presents – to enhance distribution, address new markets, and optimise back-end processes.
Exposing transactional services in new and different ways – such as a smartphone app – is a small component of digitisation.
However, in order to maximise the benefits that digitisation delivers, it is vital to capture the real opportunities that new digital technologies and platforms deliver moving forward.
While all our major banks are quick to reach for catchphrases like “customer-centricity” and “user-centred design”, how many times have you received a call from your bank, asking what you would actually like from your banking relationship? How many banks are heading out ‘into the field’: understanding customer behaviours at taxi ranks, shops, community centres, offices, and everyday places that punctuate the lives of most South Africans?
We’re infatuated by the unlimited possibilities of technology, but we’re failing to listen to what customers really want.
The real value of digital lies in the opportunity to move far closer to the customer, to engage in in-depth ‘customer discovery’ sessions, and at scale. It’s in analysing customer activity across all channels, challenging archaic regulation, removing complexity from customers’ experiences, and building services that provide greater convenience and address real needs.
It’s not about simply finding ways to improve internal efficiencies, or maximise external revenue streams. And it’s certainly not about rolling out the latest, new digital interfaces that we can showcase.
In the quest to become more relevant to their customer, perhaps the biggest opportunity for banks is in providing far more personalised services. Static approaches like segmentation models and LSM definitions simply do not capture the dynamic, multidimensional nature of the modern customer.
For instance, the same money transfer product may be used by mass market customers to send funds to unbanked family members, and by high net worth customers to send money to their children at school or varsity. Though it’s the same product, it’s being used by two very different customers, to satisfy very different needs. It’s only by considering the broader context that we can truly understand the customer behaviour.
Put simply, one size does not fit all. We all have a unique definition of what is acceptable in areas like security, convenience, customer service response times, or data privacy. From a technology perspective, we have different device and connectivity constraints. We have different language capabilities. From province to province, from urban to rural, our daily lives are starkly different.Providing a banking service that perfectly fits within the fabric of every individual lifestyle may be a far-away dream, but by effectively using data, and listening to customers more closely, a bank can at least set off on the right trajectory.
As a parting thought, there’s a great example of a bank that actively listened to its customers on social media, noticing when one of its clients broadcast to his followers that he was extending his holiday. The bank took the opportunity to recommend a local accommodation provider, and arranged for a discounted stay. This kind of point-in-time, value adding engagement helps elevate the way the bank is seen by its customers – showing a caring and responsive brand personality, and generating increased customer loyalty in return.
This example represents just one of the many ways in which financial services players can use digital advancements to move closer to their customers – and ultimately elevate the relationship away from that of ‘grudge purchase’, towards more personalised, more enjoyable and valued experiences.