Five industry experts share their opinions on why customer-centricity has become a strategic necessity for banks.
In the banking sector McKinsey estimates that 75 to 80% of transactional operations (e.g. general accounting operations, payments processing) and up to 40% of strategic activities can be automated.
“Operations staff will have a very different set of tasks and thus will need different skills. Instead of processing transactions or compiling data, they will use technology to advise clients on the best financial options and products, do creative problem solving, and develop new products and services to enhance the customer experience”, McKinsey writes.
Banks, in other words, will look and act a whole lot more like tech companies. And they will place the customer at the center of their business. The question is: why?
FintechOS tried to find out during its FintechOS Annual Summit, with apanel of industry experts: Keith Jordan, VP of Innovation, Labs as a Service at Mastercard; Melissa Stringer, Consulting Product Lead at 11:FS; Prerna Goel, Head of Customer Experience at ClearBank; Souhail Haddaji, Managing Director, Niji and Sergiu Negut, Co-Founder, EVP at FintechOS as moderator.
Below are the key take-aways of the session ”Building the Customer-Centric Bank of the Future”.
Keith Jordan, VP of Innovation, Labs as a Service, Mastercard:
We’re seeing the evolution of transactions turning into experiences, which are going to be dedicated purely to consumers, around their lifestyles, around what they do during the day. Financial services will interact with customers at their time of need. They will be heavily personalised, they will be location-based and absolutely customer-centric.”
“Pre–Covid-19, we did see a lot of banks and institutions around the world doing a lot of digitisation – digitisation, not digital transformation.With the pandemic, we moved technology and our thinking on 10-15 years in6-8 months. If you’re not digital-first today, you’re pretty much going to be dead in the next years. The revolution happened quickly. The sector is going to be an exciting place to be.”
“Although digital customers long fordigital channels, they still want to go into traditional banks to do the heavy lifting – mortgage applications, financial advice. All this still happens in the branch.”
“The traditional way in which banks make money is eroding”
Melissa Stringer, Consulting Product Lead, 11:FS:
“For banks to think in a customer-centric way they might prefer to partner with players in the industry that are gaining tremendous traction rather than having to own the customers themselves. It is very expensive to acquire customers. You don’t have to own or build everything in your environment.”
“Personalisation and flexibility are really key. Banks have no choice but to become customer-centric.”
“The traditional way in which banks make money is eroding.”
Prerna Goel, Head of Customer Experience, ClearBank:
Being customer–centric means providing very intuitive and clear interaction, solving problems and being efficient.”
“Now, customers know more than before what their rights and needs are, they are more vocal about expressing their needs and social media help their voices and opinions to be heard.”
“Banking is transforming, and customers will not want to be given a standard offering. They will not want companies to push products and services to them, they will want to be pulled.”
“Without data you can’t build a truly digital offering”.
Moderator Sergiu Negut, Co-Founder, EVP of FintechOS:
“Many banks still think in terms of products, not customer journeys.”
“Banks are becoming more entertaining simply because they have to engage with customers, because they can’t avoid it any more.”
“It is essential to break the centralised model”
Souhail Haddaji, Managing Director, Niji
“In the past decade there were probably five strong forces reshaping the banking industry:
The interest rates that decreased continuously;
More and more regulation – a higher cost for the banks;
Innovation and disruption from the fintech industry;
The platformisation of the banking industry;
The changing needs of customers;”
“Being customer centric means really putting the customer at the heart of the organisation and ensuring all decisions and operations are driven by customer outcomes.”
“It is essential to break the centralised model and to push the decisions to the where the customers reside. Last but not least, it is essential to make sure that the data becomes the tissue that binds everything together”.
“What should banks do to achieve customer centricity? 1. Partnering with other providers to offer their customers the experience they want; 2. Have a cultural mindset to drive the change”
“The extensive use of automation and technology is crucial. More and more CIOs are supporting this transformation. Talent will be at the heart of the success of this kind of transformation, and of a new business model as well.”
“Banks need to start transformation around modular architecture, cloud and the technology that allows them to be agile, with data at the core.”