Digital, Mobile, and Seamless: How the Financial Industry Is Revamping Customer Experience
From a bird’s eye view, banks and financial service providers have been making incremental innovations over the last few decades. Significant successes have been rare. But finally, digital innovation is stirring things up in the financial sector, with customer experience taking centre stage.
The European financial sector is undergoing a transformation. EU directive PSD2 gives customers full control over their banking data and lets third parties access account information for new products and services with customer approval. What may have been a conventional European administrative decision has put in motion a movement of massive proportions. Within a short time, PSD2 has turned the European financial market upside down and this—if we are to believe the experts—is just the beginning.
Young financial technology (fintech) start-ups are sprouting like mushrooms, facilitating a wave of innovation that not even well-established financial institutions can escape. Traditional banking offers, in particular, have not seen any real disruption in a long time. Emerging innovative third-party providers like N26 from Germany or Monzo and Revolut from the UK are stirring up the industry with their new offers.
The new standard: Banking via smartphone, tablet, and smartwatch
Customer behaviour has changed drastically in the last few years. The new generation of customers now expect banks and financial services to seamlessly integrate into their increasingly digitalised lifestyles. Their smartphones, tablets, and smartwatches are always close at hand.
This generational shift is pressuring the financial world to act. The younger demographic—millennials and Generation Z (so called “digital natives,” the first to grow up in a digitally connected world)—are banks’ and financial services providers’ future clientele. Media disruptions, which have been common in the financial industry and have traditionally been accepted by customers due to a lack of better alternatives, are less acceptable than ever.
Media disruptions strain the customer experience
Consider, for example, a credit agreement. Most financial institutions now allow customers to apply for a loan online. After the first few steps, however, you may feel as if you’ve been sent back to the stone age. The paper exchange begins with a written order confirmation, continues with a request for various proofs of income, and ends, in the best case, with an agreement after many days, or in the worst case, with a rejection—and you must begin the same routine with a different provider.
This results in lost time, not to mention an unsatisfactory customer experience and a poor lasting impression with the customer. Given that we have digital solutions for almost every aspect of our everyday lives, financial services with abrupt media disruptions just don’t cut it anymore. Online credit providers like smava, comparison portals like CHECK24, and innovative financial institutions such as the SKG BANK demonstrate that the financial services industry can operate differently. All of these providers enable customers to take most of the steps leading to the contract digitally and seamlessly.
New roles for IT departments
New solutions in digital document processing have made digitally integrated processes without media disruptions possible. These solutions are the basic building blocks for the financial services industry’s new customer experience. Banks and financial services providers can only claim a seamless customer experience when they’ve eliminated even the toughest media disruptions and met their customers’ digitalisation and mobility expectations.
This gives the IT departments of financial institutions an entirely new role. Traditionally “business enablers”—that is, responsible only for deploying the business’s back-office functionalities—IT departments are becoming frontline “experience makers.” Digital technologies will be the foundation for a new kind of customer experience. Read our Technology and the Reinvention of the Modern World report, co-written with IDG, to find out what strategies successful enterprises are currently betting on.
An extensive survey of 13,000 digital professionals confirms that the financial world is beginning to understand the importance of the customer experience. Customer experience is getting priority over issues such as customer service, product innovation, and service quality. Digital document management solutions, such as electronic signatures, are easily implemented and assist both established financial institutions and aspiring fintech businesses on their journey to become digital first organisations.
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