Banks and financial institutions are facing a very dynamic market landscape. Rapid and disruptive innovation in the financial services industry combined with ubiquitous and user-friendly applications in other industries; think Uber and Netflix; has fundamentally changed how consumers think about and utilize banking services. While initially slow to embrace digital transformation, banks all over the world are now scrambling to put strategies in place to better serve their customers and ensure that they are not left behind.
Banks face some major obstacles when it comes to digitizing the customer experience such as outdated legacy systems and infrastructure, and resistance to change. Infrastructure challenges are something that banking leaders are well aware of. According to a survey of bank executives, nearly 90% of respondents reported that their technology infrastructure is “complicated” and may prevent digital interactions with customers. This is a major issue since digital interactions are correlated with customer satisfaction. A McKinsey survey that examined the banking, auto insurance, retail, energy, health insurance and mobile communications sectors, found that the quality and availability of digital interactions have a significant impact on customer satisfaction. Adding digital offerings and interactions are crucial for consumer-facing companies to remain competitive when faced with an increase in customer expectations.
So, what exactly do banking customers want?
It was not too long ago that simply interacting with customers through online banking services was enough to provide them with an excellent banking experience. But today’s banking customers expect more. Financial services companies must also anticipate and understand customer needs based on their actions and behaviors. To further complicate matters, customers do not differentiate between digital and in-person experiences. They expect real-time access to information and services from any device, at any time and from any location. For instance, they would like to have the ability to monitor their accounts, receive fraud alerts and access support 24/7/365 using their preferred digital channels. For traditional banks, anticipating and satisfying customer needs at each touchpoint is no easy task. They must modernize the end-to-end customer lifecycle, something that legacy systems are poorly suited but cloud technologies excel at.
Transcending legacy systems and infrastructure challenges via the cloud
Fintech firms have been faster to innovate than traditional banks, largely because they identified consumer dissatisfaction with traditional financial services providers and crafted their products and services to satisfy unmet needs. Many have successfully digitalized the customer journey and achieved transformation at scale by leveraging cloud technologies. In addition to providing the flexible infrastructure that is needed to reinvent the customer experience, the cloud technologies free up the time and resources associated with maintaining legacy systems to allow banks to spend more time meeting customer needs. More specifically, cloud technologies can help banks to improve the customer experience by:
- Synchronizing the organization
With more and more banks opting for digital banking business models, stakeholders must find ways to integrate business units and streamline the collection, sharing and utilization of data. Customer service agents must be able to access customer data at each touchpoint to improve the speed and quality of each interaction.
- Acquiring customer insights
Cloud technologies help to break down data silos to give banks a comprehensive view of their customers. They also increase data storage and computing capabilities to generate improved customer insights. Stakeholders can leverage these insights to improve banking services and offer personalized customer experiences.
- Driving innovation
To become a digital-first organization, banks must be able to leverage innovative digital technologies at scale. Relevant technologies include machine learning and artificial intelligence, image recognition and natural language processing. These tools help to improve operational consistency and efficiency, reduce costs and provide superior customer experiences. For example, conversational AI-powered bots are available 24/7/365 and can closely replicate human interaction. Immediate customer needs are met and human intervention is greatly reduced allowing representatives to focus more time on assisting customers who need help with more complex issues.
- Improving operational resilience
In the wake of the pandemic, the banks were forced to respond quickly to consumer needs and behaviors that seemingly changed overnight. Cloud infrastructure improves bank's ability to respond quickly while improving resilience by replicating data and applications across more than one data center. With the right technologies, banks can quickly shift to remote working models and implement new services to continuously meet customer needs.
- Enhancing security
Public cloud providers maintain the highest security standards. These cloud environments are often more secure than on-premises solutions, helping banks to safeguard customer data from costly data breaches.
Some useful tips to ensure a smooth transition to the cloud
For many banks, the prospect of transitioning from trusted legacy systems to an enterprise cloud solution can be overwhelming. For this reason, banks typically employ an incremental approach that consists of the following key considerations.
- Use case development
The cloud provides the flexibility to quickly upgrade capabilities and service offerings. Solutions such as customer relationship management or call center technology are already cloud-based. Stakeholders must start by identifying and prioritizing use cases and analyzing each to determine how the technologies will fit with the bank’s existing processes and the customer journey.
- Solution design
Whenever an organization is contemplating to implement new technologies into their workflows, time to market is an important concern. Most banks cannot afford prolonged downtime that can impact both productivity and the customer experience. Cloud providers typically have the resources and experience to shorten implementation time versus relying on in-house IT teams.
- Vendor selection and management
Digital technologies and customer preferences will continue to evolve rapidly. Banks must avoid getting locked in for an extended period of time with any vendor. This will make it difficult to take advantage of new technologies that can further improve the customer experience.
- Modernize contact centers
Cloud-based contact centers and CRM solutions play a key role in helping banks to interact with customers at each digital touchpoint. Technologies such as chat bots and IVR complement human agents. The access to more customer data and opportunities drives greater personalization and responsiveness while unlocking up-sell opportunities and significantly improving customer retention.
Providing world-class customer experiences with a best-of-breed design approach
A best-of-breed design approach can help banks in fulfilling the customer expectations. Organizations can handpick leading cloud applications that allow them to provide the capabilities and features that they need to better meet their customers’ needs. This approach also allows banks to start small and gradually build their technology stacks as they become more accustomed to the cloud and seek to offer additional products and services. Best-of-breed solutions are also extremely flexible. They typically integrate easily with other best-of-breed technologies. This speeds up the implementation process. By allowing banks to connect multiple systems, it aids in creating a frictionless customer experiences and automates their workflows to improve efficiency, productivity, and compliance.
Conclusion
Today’s banking customers expect frictionless digital and in-person banking experiences. Legacy systems and outdated infrastructure prevent banks from improving the frequency and quality of customer interactions. The cloud offers the flexibility and cost-effectiveness that banks need to craft memorable customer experiences. Moreover, adopting a best-of-breed design approach allows banks to leverage the newest technologies and rapidly modify their service offerings in order to provide their customers with a digital first banking experience.
