Why banking has gone from being a place we go to something we do
Although the book by the same author, Banking 4.0, is now available, this publication has a double interest: on the one hand, it visualizes the future ideas about the evolution of banking that managers had a few years ago and, on the other hand, it identifies a series of challenges, some of which have been met, others have become less critical and many others are still far from being implemented in business models.
The author, Brett king, is a renowned futurist and popularizer focused on the future of business. He has given talks in more than 50 countries, at TED conferences, and has been featured in media such as Wired, Techsauce, Singularity University, Web Summit, The Economist, IBM's World of Watson, CES, SIBOS, etc. He has been a commentator on CNBC, BBC, ABC, Fox, and Bloomberg. He was an advisor to the Obama administration regarding Fintech policies and advises regulators and banks on technological transformation.
Some useful key lessons to reflect on or take stock of can be found in the book, whether they are in progress or being applied correctly.
The main axis, as it could not be otherwise, is based on the rapid change in customer behavior due to two key factors: the psychology of personal fulfillment and the innovation and adoption of technology, which is also called diffusion.
Faced with this reality, banks in turn have two options: try to reinforce traditional mechanisms and behaviors or anticipate changes in behavior and evolve accordingly. The pace and speed of these behavioral changes are accelerating, not the other way around. Therefore, institutions have less and less time to react and anticipate the impact that these changes may have on their business. The longer they wait, the greater the gap between customer expectations and the institutions' ability to serve.
These behavioral changes are characterized by four key phases and we are already in the third of those phases, which is a change in the game: the loss of physical presence and the mobilization of payments. The fourth phase, which involves taking down the basic bank account from the bank, will happen gradually over the next ten years, and banking will never be the same again because it will be everywhere, and anyone can provide the services of a bank. The increase in “unbanked” people highlights the growing trend of consumers who value the usefulness of banking over the banks themselves. When the world's bank account is a mobile phone: who really is the bank?
The profitability of a great customer experience
The customer experience has ceased to be the exclusive domain of the branch and has become the domain of the brand. It's the result of everything we do, and customers demand a better experience, full stop. In fact, an average customer accesses your brand through an ATM, mobile phone or the Internet 30 to 40 times more often than through a branch. If you depend on branches as the only platform to measure the excellence of your service, you are completely lost.
Inconsistencies within organizational structure and service levels across channels and silos frustrate customers who just want to deal with the bank in the most efficient way possible. In Part 3 of the book, reference is made to what banking needs to do to create a customer experience: Appoint a customer champion to manage all across channels.Create analytical reports that identify gaps in each channel or touchpoint.Involve customers in the design process, particularly with regard to interface and language.Build a team to take down those responsible and channel silos when making decisions to create an improved customer experience. crowdsourcing to engage the client in a constant dialogue, and to extract ideas from this transparent platform.Know the integral relationship that the client maintains with the bank in all channels. Customer experience is emerging as the holy grail of retail financial services, but the key lessons are not so much about presence and service as it is about understanding fundamental customer needs.
Banking 3.0
To create an optimal customer experience, you need to be able to measure how your customers' behavior is adapting and the pace of innovation or value creation within the institution. And this cannot be reduced to a measurement or a channel-by-channel approach. Channels and products do not compete for recognition or share of customer portfolios, they are now part of a complementary and, in many cases, symbiotic ecosystem. While many institutions have the ability to measure customer experience, they see customer experience as less important than revenue from an informational standpoint. Where revenue tells you what you've accomplished, behavioral analytics can tell you why And what is more important, In which aspects can you improve?. The future of your business is about removing friction and aligning our customers' behavior with our brand response. The better you link to customer behavior, the more likely I am to turn to you when I need the services of a financial institution in my daily life.
Can we save the branches?
In the end, the decision to rapidly disengage from physical networks will be an economic decision, as margins continue to shrink and as new and better distribution models emerge, non-bank financial institutions begin to compete, based on friction , and as more mature figures show that branches are very unprofitable.
On Board and Engaged: The Customer Service Ecosystem
Call centers, or customer service centers, have been hailed by the industry as a major improvement in the ability to provide ongoing support to customers in an increasingly mobile and time-sensitive environment. IVR systems and channel migration have brought significant cost savings to companies. This revolution, however, has not led to greater customer satisfaction. Increasingly, contact centers are struggling with extremely high staff turnover, management demands for better business results, and companies are torn between outsourcing and insourcing. Today the customer service center is considered a complex combination of unified messaging platforms, IP-based architectures, automated voice response systems, and key performance indicators for first-call problem resolution. But are there still fundamental pillars to be laid for this channel to be truly effective? This chapter has addressed staff retention issues and effective performance measurement of call centers. But it has also touched on deeper questions about the possibility of the contact center becoming the platform for all multi-channel customer contacts – processing and recording contact history and optimizing responses, both through a sales opportunity such as through better IVR design–. Creating a simplified interface or dashboard for the call center would reduce the workload of CSRs and improve the chances of resolving issues on the first call, leading to better quality sales placement.
Why is it so difficult to earn income...
After 10 years, the Internet is still perceived as a “threat” by some traditional bankers or, at best, as something incomprehensible by most bankers. Far from being a mere "functional" transactional platform that saves costs, the web is the largest source of new income that exists today. The key is knowing what to sell and how to use the channel in the sales process. Bankers need to start treating the web as the equivalent of the branch in terms of strategic importance to the brand. Any lower match directly means lost new revenue opportunities and lost customers to other providers. Let's put it in very simple terms. Ten years from now, most retail banking revenues will come from web, mobile and tablet operations. If you haven't started down that road yet, then you need to hurry up.
Mobile banking – a massive phenomenon that has only just begun
If we had asked most bankers a few years ago when they thought mobile banking was going to become the mainstream, they probably would have answered “my eyes won't see it”. And yet, in the last five years that is exactly what has happened, and now banks all over the world are talking about NFC, electronic wallets, mobile banking, etc. In the last ten years, mobility has matured and established itself in the world of financial services, both in developed and developing countries. A mobile distribution network not only makes it possible to reach a much larger audience, but also engages customers on a very personal level.
The strength of mobility is its ability to allow a person to operate with their money in a comfortable way, anywhere, at any time, and always connected. The role of mobility in financial services has already matured and grown to relevant dimensions. The significant investments in mobile technology that the large payment networks are making will bring about a revolution. Knowing that developing country economies are already approaching the 50% smartphone adoption rate, no bank can avoid the presence of mobility if it wants to be relevant to the majority of its customers.
On the horizon, mobile banking will be the main channel for most customers. Four years is not a long time to develop this channel and competently support the vast majority of day-to-day retail business, especially if banks currently have little experience cross-selling and overselling across channels. digital like mobile. Social networks, their offer and integration in terms of geolocation, promise to make the mobile experience much more relevant for customers, intensifying the demands that financial institutions must respond to.
The Evolution of Self-Service
With the 40th anniversary of ATMs, it does not seem that their popularity will diminish in the coming years. As banks try to take advantage of their extensive ATM networks, it is worth asking what key factors drive customers to use them. What is the best ATM layout? At what point are customers using them, and what might stop them from using a particular ATM? The issue of income continues to raise a question: is the ATM a cost center or a profit center? Initially designed to reduce the workload of the branch, is it fulfilling its role? Other self-service devices, such as cash deposit machines and check deposit machines, are also being launched. Are they succeeding? What future awaits the humble ATM platform? The key to self-service is ease and speed of use. Keep it simple and when making decisions about what to use, use basic processes or reduce tasks to their simplest form. How long is it until cash issuance is the only functionality that distinguishes ATMs from mobile phones? If I use my phone to make payments, to what extent will this reduce my reliance on cash, and thus on the bank's ATM network?
Living with constant technological improvement
Technology seems to have reached a point where exponential improvements are not new. Adoption rates for new technologies are through the roof and prices are coming down so that more people have access to these technologies. New scientific materials, such as organic LEDs, flexible circuit boards, and chips, offer entirely new possibilities for device construction and design. As wireless technologies become more prevalent, our devices are becoming more intelligent thanks to their access to networks. Mechanisms with new interfaces, augmented reality and the greater use of technology in our daily experience will continue to make new technological advances the "norm" when doing business. Offering value, but in a relevant and contextual way, this will be key – not just sending me more advertising through a digital wall, to my mobile phone or my tablet. Know my behavior, what I am doing and why I might need a product or service from a financial institution, and meet that behavior or evidence of a need. Technology is no longer something exceptional, it is not even an alternative option for customers – it is the way we do our banking in the world of Banking 3.0. Today, it is the main channel of daily communication with its customers.
A world in the cloud
As is evident from what we have seen about technology adoption, coupled with social media, the smartphone phenomenon, and so on, the customer experience has come to be in a state of gradual but constant change. What will happen next in the customer experience? The information explosion is going to alter customers' expectations of how they connect with the bank in real time. We will have to change the way we receive, prioritize and review information. At the moment we are receiving too much information to approach it in the same way as always. The amount of data that we have to deal with is staggering, so the true art of banks will be to process, analyze and apply all this information in a useful and creative way to provide better customer service or to help the business adopt more timely and accurate decisions.
Second, the way we all interact with technology is evolving. Touch screens allow our fingers to replace the mouse and keyboard, and new ways of accessing information, user interface approaches, and application platforms are unlocking entirely new ways to organize, process, and prioritize key content. Augmented reality is changing the way our devices will interact with the environment. Ultimately, the core technology platform that enables all of this will need to be highly flexible, agile, and open to collaboration. The cloud and APIs will play an increasingly important role in connecting various players in the customer ecosystem, for better real-time problem resolution and better real-time solution delivery. Banks that are confined within their own borders will be shackled by not being able to integrate with the partners who are building customer connections on a daily basis.
What state do you think banking is in right now? What is the key to change?
