5 CX innovation opportunities for financial services

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The banking and financial services landscape is ever-evolving. Despite the Covid-19 pandemic causing reduced operational efficiency and profitability in 2020 and 2021, the industry has proved its resilience with its innovation and adaptiveness. However, customer needs and behaviours are constantly changing, with a steep increase in digital adoption and a surge in demand for hyper-personalisation. Banks are making significant progress in transforming themselves to support the needs of the new-age digital customer. They are reimagining their customer journeys to form a strong personal and emotional connection that can last their customers’ lifetime. There are 5 imperative CX innovation opportunities that financial institutions can implement to succeed in 2023.

Reimagining customer journeys with a digital-first strategy

The idea of designing customer experiences as disparate touchpoints must change. Instead, financial institutions need to view their experiences in a bigger picture, i.e. customer journeys. By leveraging digital experience platforms, financial institutions can enable easier tracking and monitoring when designing an end-to-end journey. 

One of the digital innovations which highly enhanced customer journeys in Australia is the Buy Now Pay Later (BNPL) payment system. Despite some controversy, BNPL gained traction as it helps consumers manage their cash flow better, enables zero-interest purchases, and empowers them with full control of their money.

Currently, 5.9 million active users are using BNPL in Australia, amounting to more than $11.9 billion in transactions. The accelerated adoption of BNPL indicates incumbents must be digital-first and accommodate rapidly changing customer needs. 

Designing omnichannel experiences

An omnichannel customer experience is the first step to curating a seamless digital experience. Nowadays, consumers demand immediate responses via their preferred channels. And while empowering customers with multiple channels to contact the bank is great, financial institutions must provide the same level of top-quality customer experience to all customers, regardless of the channel. Financial institutions can achieve this by integrating all interactions into one view, allowing agents to pick up conversations where they left off seamlessly while enabling personalised services.

Improve customer engagement with easily accessible applications and self-service channels

Companies can start by designing an intuitive workflow for their applications and establishing self-service channels. When designing applications, banks need to incorporate features that greatly elevate their user experiences, such as an integrated customer authentication system and real-time dashboards.

Additionally, self-service channels, i.e. chatbots, should be available to customers to access help easily. With AI and analytics, the chatbot can resolve issues with little to no agent intervention – adding value and removing friction in the customer journey.

UBank is a clear model of what banks should do. Instead of letting customers navigate the process blindly, Mia, its virtual assistant, guides users through the home loan application process and naturally interacts with them through open-ended conversations. By being there for the customers 24/7, the human-like chatbot can immediately answer customer doubts and support customers through one of their most important life decisions.

Gamification to make banking interactive and appealing

One of the biggest factors affecting customer retention is gamification. Particularly among the younger generation, gamification is picking up steam – 70% of youngsters under 25 gravitate towards gaming more than watching videos in their free time.

Adding gaming elements to banking products can change consumer behaviour for the better, encouraging them to save more and improve their financial decision-making. Banks can achieve this with rewards or higher interest rates to motivate customers to reach their saving goals. With immersive and realistic games to help customers better understand financial decisions and consequences, banks can positively affect customers’ financial literacy, retirement planning, portfolio management, or stock market participation.

For example, Commonwealth Bank has developed its own property investing game, “Investorville”. The game simulates real-life investing scenarios, where customers purchase and own properties based on real-time market data. By making different financial investments and decisions throughout the process, they get to experience being a property owner and gain confidence to take out loans for investment in real-life.

Leverage the power of data

Banks must harness the vast customer data from payment processing services and mobile and online banking platforms to curate more personalised experiences. By contextualising data, organisations can better understand customer situations and needs. Then, moving forward, they can leverage the insights to provide targeted messaging and recommendations at the right time to capitalise on cross-selling and up-selling opportunities.

Additionally, predictive analytics can contribute to better organisational decisions. Making logical deductions on future events allows banks to take customer-centric actions in addressing issues proactively. For example, the predictive mechanism enables financial institutions to form new business models. It achieves this by evaluating customer demographics, characteristics and products owned to develop microsegments better tailored for individuals.

Westpac Bank has recently launched its data analytics offering “Data X”, which aims to deliver actionable insights to help clients beyond traditional banking services. Targeting both the decision makers and data teams, the data obtained from de-identified credit card transactions can help clients better understand market conditions and identify new growth opportunities

Drive growth opportunities with invisible banking

Invisible banking – the merge of digital banking into customers’ daily lives – is revolutionising the banking industry. Incumbents team up with non-bank companies to offer banking-as-a-service products, allowing banks to acquire a greater number of customers at a lower cost. By bringing together different partners to build services into the customer journey, this ecosystem also benefits the consumers. As a result, they enjoy a seamless experience where banking is part and parcel of their daily activities.

On top of that, the proliferation of IoT devices and wearables is also paving the way for the boom of embedded finance. Currently, there are around 7.7 billion connected IoT devices globally, and it is expected to reach 24 billion by 2030. That being the case, consumers will be able to take advantage of hassle-free experiences, such as accessing invisible tickets in public transportation systems or auto-payment features at the gas station.

The partnership between Parpera and Railspay is another great example of digital banking, as it led to the release of its own business debit card. And since it is linked directly to deposit accounts, the unique business offering provides hassle-free payments, personalised insights, and support for sole traders, freelancers and startup founders.

Acing employee experience for better customer experience

A company’s culture speaks volumes. More so as it is an organisation in the financial services industry where employees need the right tools to go above and beyond in the service of customers. Especially in the digital age, data training, AI and machine learning-related knowledge are a must-learn for employees. But what’s more important is that companies genuinely care about their employees and consider their needs and happiness. Among programs that companies can facilitate for a better employee experience are diversity and inclusion programs, health and wellness initiatives, and scholarships for higher studies. 87% of CIOs believe digitally empowering their employees can add up to 5% additional revenue growth in 3 years.

As more consumers re-examine their relationships with financial institutions, banks must seize the opportunity to make a change now, before more fintech and digital startups disrupt the market. A bold transformation in the right direction will give companies the upper hand – growth leaders are observed to produce 80% more shareholder value than their competitors. Therefore, companies must adopt a growth mindset to close the gap between incumbents and digital challengers. They need to adopt an omnichannel approach and integrate gamification to make banking interactive. Companies also need to leverage the power of data for hyper-personalisation. Above all, they must be human-centric. Institutions can unlock even greater growth opportunities by embedding banking products into customers’ daily life and prioritising employee experiences to empower the team.

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Last updated on: November 1, 2022