How CX is critical for the new digital world of financial services

The adoption of mobile over the last 20 years has dramatically changed the face of financial services in Europe and beyond. This shake up of consumer and business banking has led to financially-savvy customers who are more demanding and expect a higher level of customer service than ever before.

Banking today is digital, and long gone are the days where you have to visit a branch to open an account or transfer a large sum of money abroad. In an online world, offering your banking services between the hours of 9-5 Monday to Friday is simply no longer good enough.And while the traditional banks have offered online services for many years, customers now want much more than just a statement they can view on their laptop or mobile.

The EU Directive PSD2 came into force in 2015 to regulate payment services and encourage the adoption of online and mobile payments through ‘open banking’. Open Banking requires banks to provide customer and payment data via APIs to approved third-parties, in a bid to move towards greater transparency and make life easier for the end customer to see all their banking records in one place.

This has been partly why we’ve seen a huge rise in the challenger banks across Europe – Starling, Monese, Nickel, TransferWise, – these players changed the digital banking landscape in a few short years, making the traditional players feel uncomfortable in the world they created. The challengers set up created modern banks with slick user interfaces and intelligent messaging communication that matched the experience of their customers’ favourite mobile apps.

Take Monzo as an example, this challenger bank emerged in the late 2010s and it wasn’t competitive interest rates or cash incentives that saw sign-ups boom, but because of simple features such as offering real-time balance updates or the ability to freeze and un-freeze your card with a push of a button in the app. Millennials who – according to sceptics were too focused on eating avocado on toast to save for a mortgage deposit – lapped up the UX and Monzo’s fun use of emojis and the bank now has over 5 million users. Similarly, Monese has captured its market share with an account opening process that can be completed on a customer’s smartphone in under three minutes.

The traditional banks moved quickly, hiring digital expertise to mimic UX features on the market and build their own unique services, while the new digital banks continued to innovate and challenge each other with increasingly clever consumer-focused features and speedy resolution of problems.

And now, if you ever experience that panicked patting down of your pockets as you try to find your bank card, most likely whichever institution you bank with now offers the ability for you to freeze your card from your phone. Competitors quickly realised simplicity and experience is key.

Be where your customers are

To compete in a world driven by mobile you need to be able to offer differentiated and seamless customer interaction and European financial service companies are clearly doing that with 64% saying they’ve tried new channels in 2020, according to our CX Trends 2021: Industry Insights report. And most are working to keep up with the challengers, with 78% reporting that they’ve looked for new ways to engage customers.

The increase of quick, seamless messaging in consumers’ daily lives has also impacted the way we communicate with our banks – customers no longer have the patience to be passed around different call centre agents to answer their queries, which is why API integrations are necessary to gain a faster overview of the context of a query immediately. TransferWise has been working with Zendesk to achieve exactly this, as well as taking advantage of automation technology to ensure agents have the very latest information about a customer when they answer a call. According to our research, FS companies with the best CX results are 1.7 times more likely to use messaging channels.
EU call centre agents have seen a 19% increase in customer engagement over the last year according to the CX Trends report, as the combination of Covid-19 financial worries and the ease of digital banking communication collided. Indeed, financial services companies with the happiest customers are 2.6 times as likely to have invested in omnichannel communication ensuring they are always available where their customers are.

Beyond retail banking

And it’s not just retail banking that has seen all this exciting change – digitisation in business banking is seeing firms embrace digital ledgers and technologies including blockchain, big data and artificial intelligence.

The traditional players in this space are keen to use technology to improve CX for their business customers by making processes more efficient, user-friendly, and anticipating their wants and needs, rather than just meeting them. A true transformation in the way the industry behaves is under way, built on agility, superior CX, omnichannel banking and employee engagement.

Blockchain and digital ledgers enable institutions to build transparent, centralised accounting systems which are fully secure, yet at the same time truly agile. In 2018, 22 European countries (including the UK at the time) signed up to create a blockchain partnership – this partnership aims at ensuring the EU is at the forefront of developing and using this distributed ledger technology, which whether used for safer banking transactions, to tighten up your supply chain or a centralised database for your customer records, allows you as a business to react quicker and become more competitive in the market.

This attitude came across in our CX Industry Insights report, where 49% of financial services companies said they were looking to improve agility, while banks with the fastest resolution times are 2.2 times more likely to use workflow management tools.

Like in many industries which have seen their ways of working dramatically change since the invention of the smartphone – and even more so over the last year as our lives were impacted by Covid-19 – digital in banking isn’t a nice-to-have, it is a must for those who wish to survive. And with that comes a laser-focused approach to CX, and the future looks promising, with 70% of FS companies planning to ringfence more budget to invest in CX technology in 2021.