Customer Onboarding in the CEE Banking: Pains and Gains
Banks in the CEE region must keep up a rapid pace of digital delivery to capitalize on the momentum of growing demand. But how can they do that in a way that converts and delights?
The pandemic changed banking forever.
“We moved technology, and our thinking, on 10 to 15 years in 6 to 8 months”, said Keith Jordan, VP of Innovation, Labs as a Service at Mastercard, during FintechOS Annual Summit, a virtual event hosted by FintechOS in November 2020.
“If you’re not digital-first today, you’re pretty much going to be dead in the next few years”, Jordan concluded.
The data supports this view. The share of digital and hybrid banking customers has jumped over the past few years: in 2015, they made up 65% of all customers; the figure hit 88% in 2019, a BCG report shows (Global Retail Banking 2019: The Race for Relevance and Scale).
According to J.D. Power, only 46% of consumers said last year they would go back to “banking as usual” post Covid-19, while there’ll be a 20% increase in mobile and 17% rise in online banking.
The trend is obvious. But can digitization itself guarantee a great customer experience (CX)?
FintechOS explored this topic during a recent webinar, and tried to answer this question: how to create digital experiences that convert and delight? The panel of experts included:
- Andrei Ratiu, Associate Partner, EY Romania
- Przemysław Wyszyński, Head of CEE, Russia & CIS, Communications API Vonage
- Cătălin Dediu, VP of Product Management, FintechOS
- Todi Pruteanu, VP Ecosystem, FintechOS
The discussion focused on the CEE region, where banks must keep up a rapid pace of digital delivery to capitalize on the momentum of growing demand.
“Based on our experience so far in the Central Eastern Europe region, successful onboarding includes several factors: a good strategy, good advice, compliance with local laws and regulations, access to products and great technology,” Todi Pruteanu, VP Ecosystem at FintechOS, pointed out.
You can read below other important take-aways from the webinar, as well as a selection of the most insightful quotes.
On the rise
While customers may prefer digital channels in the post-COVID-19 world, they still want personal contact through telephone or video banking. Therefore, as FintechOS showed in a previous article, Phygital remains a popular strategy for banks.
“Customers look for seamless experiences and want to communicate with their financial services providers through the channels of their choice. Even the physical experience should be supported with digital touch,” explained Przemysław Wyszyński, Head of CEE, Russia & CIS, Vonage API.
Another finding from the webinar: nearly two-thirds of smartphone users have at least one financial app on their device, hence customers are expecting their consumer banks to offer services beyond traditional banking through digital channels. According to Eurostat data quoted in the webinar:
- Of the 58% of customers who desire digital advice from their banks, only 12% receive that advice today
- 72% of business buyers expect vendors to personalize the experience to their personal needs
- 80% of customers say the experience a company provides is as important as its products and services
What constitutes good CX: the FintechOS Approach
About two-thirds of business buyers expect vendors to personalize the experience to their personal needs. In fact, “rolling out personalized and automated products, services and customer journeys are key to enabling great CX”, said Cătălin Dediu, VP of Product Management at FintechOS.
How can this personalization be achieved? “By putting data at the core of your technology”, Dediu explains.
These are the 4 major action points for a good CX, according to FintechOS’s approach:
- Support customers in their Shopping & Research stage (the most important but also the most challenging stage for most customers). “If you look at CX studies, a lot of them will show that this stage is the most painful, yet the most important for most customers” – Cătălin Dediu
- Match customers with relevant (personalized) products and services
- Deliver cross-channel customer journeys with an emphasis on UX that addresses pain-points
- Iterate products, services and customer journeys based on customer feedback
What are the benefits of tackling CX in the right way? Better customer acquisition, improved upswell, reduced churn and cost reduction from automation.
“My advice to most banks is this: don’t build in-house – it takes too long. Or do a hybrid approach where you take some technology that is pre-built, and you develop a little bit in-house. But go to technology providers that can offer the full banking stack for your customer experience needs,” Dediu concluded.
Who are the retail customers?
In South-Eastern, maybe Central Europe too, salaries are not so big compared to the Western countries – the minimum salary is less than 700 euros. “And therefore, this is limiting the ability to spend, the ability to invest and the ability to take some loans and so on”, observes Andrei Ratiu, Associate Partner, EY Romania.
Here are some stats that complete the overall picture.
BANKED VS UNBANKED:
- The unbanked population ranges between 25 – 35%
- Young adults are more into technology and fashion spending
- Middle aged consumers pay more attention on personal effects, recreation, and culture
- 65+ years old? people are the most oriented towards health and finance
INTERNET AND MOBILE BANKING:
- CEE online banking penetration ranges between 12% and 80%
- The usage is increasing in number of transactions, value and customers
- Less than 30% of population between 25 – 54 years have tertiary educational attainment
- Still poor financial literacy to make well-informed financial decisions
As a key take-away of the webinar: even if economic improvement and financial literacy in the CEE landscape take time, market preferences change very quickly nowadays. Therefore, banks must have the ability to update products, services, and customer journeys very quickly.
Quotes from the webinar
“Based on our experience so far in the Central Eastern Europe region, successful onboarding includes several factors: a good strategy, good advice, compliance with local laws and regulations, access to products and great technology.” – Todi Pruteanu, VP Ecosystem, FintechOS
“Customer experience is even much more important than price and, in many cases, more important than the product itself or the service features” – Przemysław Wyszyński, Head of CEE, Russia & CIS, Communications API Vonage
“In terms of digital customer experience, my view is that this is the new growth engine in banking (…) Financial institutions need to be aware that they have a tough time ahead” – Cătălin Dediu, VP of Product Management, FintechOS
“Banks must act as guardians and to protect the customers” – Andrei Ratiu, Associate Partner, EY Romania
“Today’s consumers & employees live on messaging apps (…) So service providers like banks and financial institutions need to look at the channels more broadly and try to create an experience comparable to conversation.” – Przemysław Wyszyński, Head of CEE, Russia & CIS, Communications API Vonage
MAIN PHOTO Credit: Unsplash
Register now to watch the full recording of the webinar.
For more findings on this topic:
➡️Download our whitepaper – “Digital CX – The new growth engine in Retail Banking”
➡️ Watch a similar webinar on-demand – “Seamless CX: A Practical Guide to Redesigning Customer Onboarding”