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How banks can achieve cost savings in digital transformation 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%.

Mayur Vichare,
Head of Strategy Consulting at Backbase

As we enter the era of Engagement Banking, transforming digitally is at the forefront of staying ahead of the competition. Customers are now expecting improved journeys when they bank online or at a branch accompanied with a top-tier experience. If incumbent banks are able to successfully transform digitally with industry-leading technologies then it can lead to immense cost savings. So what are our methods as value consultants at Backbase?

Discovering and reimagining the key customer journeys and business processes

To ignite the pathway for better customer service looks at what journeys are crucial to a customer, on both a positive and negative note. After this, understanding which business processes have the most costs associated with them is key.

Once both of these areas are unpacked, it’s time to define your channel strategy. Today’s customers are always jumping between channels, much like they do on the likes of 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.

Backbase value consulting sheet

For the majority of banks that the Backbase value consulting team assist, it was a common denominator that the enrollment to the digital banking journey for SMEs is extremely paper-heavy and also requires customers to visit a branch. This is one of the crucial journeys for digital adoption and in the majority of cases we have witnessed, it is poorly designed.

For example, a bank in the US that Backbase consults for — when an SME added a new account they weren’t able to interact with it digitally. This becomes very frustrating, as they have to enrol all over again when they move to the online platform, as shown in the graphic below. The enrolment journey for this SME required them to visit a branch and submit a paper-based enrolment form. The bank staff then have to manually scan the form and send it to the back office team who process the form and manually enroll the SME onto the core and digital front end systems. What we also uncovered was that 20% of the time, SME customers who filled out the paper-based enrollment form missed filling out sections of information, so the process had to start from the beginning again. This makes for a costly, paper heavy journey that is not only prone to errors but also impacts customers in a negative way — leading to decreased loyalty and low digital adoption.

For example, a bank in the US that Backbase consults for — when an SME added a new account they weren’t able to interact with it digitally. This becomes very frustrating, as they have to enrol all over again when they move to the online platform, as shown in the graphic below. The enrolment journey for this SME required them to visit a branch and submit a paper-based enrolment form. The bank staff then have to manually scan the form and send it to the back office team who process the form and manually enroll the SME onto the core and digital front end systems. What we also uncovered was that 20% of the time, SME customers who filled out the paper-based enrollment form missed filling out sections of information, so the process had to start from the beginning again. This makes for a costly, paper heavy journey that is not only prone to errors but also impacts customers in a negative way — leading to decreased loyalty and low digital adoption.

Enrollment digital banking platform

Backbase Engagement Banking Platform for a better customer experience

Having advanced technology, such as the Backbase Engagement Banking Platform to support the superior customer experience while staying flexible is essential. For instance, if there’s a particular group of customers that have specific values and needs then you need to have the flexibility to cater to them. If they’re an older generation, then you need a platform that can easily adjust the steps to cater to their additional needs and education.

Driving adoption of digital channels

Empowering employees to encourage customers to actively use digital services is a great first step towards driving adoption. If more of your banking customers turn to a digital portal for anything from self-service to loan applications then it takes the pressure off call centers. Inevitably, staff will have more time to focus on the value-driven tasks rather than assisting customers with tasks that can be completed digitally.

For instance, a bank in Asia incentivizes its employees to drive up their digital channel adoption. If a customer called to get an account statement, for example, the contact center employee would pitch the app to the customer and also help them set it up. The bank also uses a balanced scorecard to measure the performance of employees, similar to a bonus scheme. This move successfully improved the company’s digital adoption.

Overall, ensuring you have a number of strategies in place that support a seamless digital journey and improved customer experience. What’s more, if banks implement a superior Engagement Banking Platform then their overall costs can be reduced by 15-20%.