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Digital Customer Engagement in the Era of Social Distancing
Mustafa Sabuwala Principal – Financial Services, APAC | July 6, 2020
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Since the advent of internet banking and digital services nearly two decades ago, experts have been predicting the death of branch banking. However, customers around the globe have resisted a complete shift to digital channels, owing to their proclivity toward personal interactions for secure financial matters. According to a recent report, a large number of customers—across several mature and digitally savvy markets in Asia—still prefer to engage with branches (up to 67% in Singapore, and 68% in Indonesia), especially for high-value or complex products and services such as mortgages and wealth management.

Changing Times

The world as we know it has been turned on its head over the past few months due to the global pandemic. The impact and aftermath of COVID-19 has, and still is, disrupting Business as Usual (BAU) for not just travel and hospitality businesses, but also every-day, essential supply chains such as food, medicine, and even childcare. As governments have imposed strict limitations on the free movement of people and goods, social distancing has become the new normal. Reports suggest that social distancing and other measures will remain in force for a while to completely break the circuit.

As such, the incentive to eschew all forms of social interactions in the physical sphere is likely to originate from consumers themselves. But there is a silver lining to this situation. Social distancing norms offer a remarkable opportunity for financial institutions to bolster their digital engagement journeys for products and services that have traditionally been exchanged via face-to-face interaction at the branches.

Social distancing norms offer a remarkable opportunity for financial institutions to bolster their digital engagement journeys for products and services that have traditionally been exchanged via face-to-face interaction at the branches.

Of course, there still remain several areas of improvement for banks to address for providing an easy and secure customer experience. It takes effort and meticulous planning to make customers confident enough to engage in a purely digital platform. Some of the areas that provide immediate opportunities are:

Customer Onboarding and Engagement

There are significant bottlenecks when it comes to onboarding new customers. This is particularly true for customers who require high-touch services such as wealth management.

Financial institutions have SOPs  oriented toward face-to-face interactions, not the digital paradigm. In addition, changing regulations and traditional mindsets also hinder efficient onboarding. These factors tend to lead to inevitable delays, paper-intensive processes, and more, negatively impacting the overall customer experience. As customers stay confined to their homes, financial institutions can reengineer their business processes as well as upgrade their technology platforms to a more seamless digital customer experience.

Leveraging and integrating data—available both internally as well as via external providers— can streamline things and deliver smooth experiences. Case in point, a leading bank in Asia was able to reduce the onboarding time for their high net worth customers from more than 2 weeks to less than 3 days.

Real-time Financial Information and Action

It is also important that financial organizations offer their customers a dashboard of real-time information with various options to initiate or execute actions. Whether it’s rebalancing an investment portfolio or refinancing mortgages, financial institutions can intelligently use technology to provide solutions such as AI-based recommendations on investments, or round-the-clock support from relationship managers. These virtual relationship managers can guide customers through the process of making and executing their decisions on the digital platform. Recently, a prominent APAC-based bank was able to completely migrate their mortgage refinancing services to the digital platform.

Leverage Data from the Ecosystem

Banks already have access to voluminous amounts of customer data from digital platforms used to make online transactions. This data can be analyzed to generate important, actionable insights on their spending behavior and preferences. However, most banks today only use the data to a limited extent, such as offering promotional content based on historical usage patterns. This is another key area of enhancement. Data analytics can leverage the data available through money transfers, common merchants, industry networks, etc., and feed it into Machine Learning models to refine offers as well as create opportunities to increase their share of wallet. For example, several life insurance companies are already leveraging data from wearables to assess risks, and reward customers with discounts.

A Glimpse into the Future

There are plenty of opportunities where the right technology can not only facilitate an enhanced customer experience, reduce costs, and improve employee engagement, safety, and productivity, but also differentiate the enterprise by positioning it toward a higher value proposition. A renewed approach toward providing secure and high-quality digital engagement for high-value financial customers can be a game-changer. To do this, banks and financial institutions can partner with digital service providers who can offer tried and tested as well as innovative end-to-end solutions that can be deployed with minimal disruptions to business. Because, ultimately, organizations that make the right technology investments in their business today, will be better placed to come out on top in a transformed, post-COVID ecosystem.