How banks can achieve cost savings while creating a better customer experience
Having a value-driven strategy in place that supports a seamless digital journey will ultimately lead to an improved customer experience. Banks can then reap the benefits and reduce their overall costs by up to 20%.
Director of Value Consulting, Backbase
Digital transformation is the key to staying ahead in the Engagement Banking era. Customers now expect exceptional journeys accompanied by a top-tier experience, both online and at the branch. And if incumbent banks are able to successfully transform — with help from industry-leading technologies — it can result in immense cost savings. This highlights the digital transformation imperative, and banks must act fast if they want to remain relevant.
Reimagining key customer journeys and business processes
To create superior customer service experiences, it's crucial to understand what journeys are important to your customer, both on a positive and negative note. After that, you have to find out which business processes have the highest associated costs.
Once you unpack both of these areas, it’s time to define your channel strategy. Today’s customers are always jumping between channels, much like they do on platforms like Netflix. So, when you’re crafting your channel strategy, you can’t just look at web and mobile — you need to envision a holistic picture.
Most banks we work with have something in common: their SME digital banking enrollment process is extremely paper-heavy and also requires customers to visit a branch. This is a crucial journey when it comes to digital adoption, and in the majority of cases we've witnessed, it's poorly designed.
For example, one bank in the U.S. didn't allow SMEs to digitally interact with a new account. This, of course, became very frustrating for the client, since they had to enroll all over again when they moved to the online platform, as you can see in the graphic below. They needed to visit a branch and submit an enrollment form, after which the bank staff had to manually scan the form and send it to the back-office team. After that, this team would process it and manually enroll the SME on the core and digital front-end systems. Needless to say, this was far from an ideal experience.
What we also uncovered was that, 20% of the time, SME customers who filled out the paper enrollment form missed sections of information, so the process had to start from the beginning again. This makes for a costly, paper-heavy journey that's not only prone to errors but also impacts customers in a negative way — leading to decreased loyalty and low digital adoption.
Crafting a better customer experience
Having advanced, flexible technology to support the customer experience is essential. Customers have specific values and needs, and you have to be able to cater to them. If you can't, they'll turn to another financial institution that can. That's why it's essential to harness the power of an Engagement Banking Platform. By making the paradigm shift to a platform model, you'll be better equipped to quickly respond to ever-changing customer needs, and that's essential to remaining relevant in the customer-first era.
Driving adoption of digital channels
To drive adoption, you should start by empowering your employees to encourage customers to actively use digital services. If more customers turn to the digital portal, it will take pressure off your call centers for everything from self-service to loan applications. Your staff will have more time to focus on value-driven tasks, rather than just assisting customers with easy digital tasks.
For example, one bank in Asia currently incentivizes its employees to drive up their digital channel adoption. If a customer calls for an account statement, the employee can pitch the app and help them set it up. The bank even uses a balanced scorecard to measure the performance of its employees, similar to a bonus scheme. This move successfully improved their digital adoption.
It's essential that you have a number of strategies in place that support a seamless digital journey and an improved customer experience. What’s more, if you implement an Engagement Banking Platform, you can even reduce your costs by 15-20%. And that makes a huge difference in an increasingly crowded market.