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Retail Banking: Customer Experience Reinvents Financial Services

banking_customer_experience

How can retail banks and financial institutions survive in a world where customers only need fifteen minutes to open a bank account online? How can they attract and engage clients able to carry out transactions with one single tap on the screen of the smartphone? Easy, they need to put the experience in the equation.

Retail banking customer experience is not a recent topic. Without customers, there won’t even be the need for financial operators. What has changed, in the last ten years or so, is technology, and customer behaviors with it. In the age of digital and mobile, banks need to embrace the digital transformation and reinvent themselves to survive.

When we talk about the effects of the Internet and mobile technology, we usually focus on companies that battle in the consumer products industry. With the emergence of a new generation of customers (the so-called Millennials), however, every single marketplace has become more demanding and competitive. So banks are evaluated just like any other brand.

Today’s customers - empowered by disruptive devices and submerged in a world of connectivity - no longer consider their experiences in an industry-silo. They evaluate the experience following precise standards, regardless the industry: all brands compete against each other to establish a satisfying relationship with clients through a compelling experience.

What does this mean for retail banks? That they need to build a digital customer experience that is amazing not only compared to all other financial institutions, but compared to the leading firms in other industries. The implication is evident: If they want to stay top of mind and retain customer loyalty, banks must learn to build an improved customer journey and use it as a competitive differentiator.​

According to the Global Consumer Banking Survey 2014 by Ernst & Young, “in many ways, consumer banking is like other types of consumer activity. But banking customers expect more than an excellent mix of products: they are looking for superior customer experiences that fulfill basic expectations while providing added value.

In the survey - which included responses from more than 32,000 retail banking customers across 43 countries - customers selected ‘the way I am treated’ as the second most important reason for trusting their bank, following (of course) ‘financial stability’. Even more important, customer experience is also considered “the most common reason for opening and closing accounts, more so than fees, rates, locations, and convenience.

You are not judged by what you produce or sell as much as you are judged by the experience you create: it all comes down to this for companies competing in the digital arena. A motto that also becomes a strong invitation for banks and insurances to reimagine their identity, together with their retail strategy, content marketing, engagement, and loyalty.  

The scenario is rapidly taking shape in front of our eyes:

  • New customers - more demanding and tech-savvy, connected 24/7;
  • New competitors - online and digital banks, lowering the costs for clients;
  • New technologies - mobile banking and direct payments (Android Pay, Apple Pay);
  • New forms of payment - the infamous Bitcoins, the swap economy and the economy of experience.

What is the definition of positive customer experience in banking? In an era of mistrust in financial institutions, digital leaders need to bear this question in mind all the time. There is more to the building of a strong connection than the development of a mobile app and the speed of a transaction.

We know that customers constantly live - and move - across different channels, digital and physical. As they use multiple touch points to connect with a company, they expect that banking experience is built to be easy, fast, personalized and accessible wherever they are, whenever they need it and whatever device they are using. This requires a shift from the ‘account mind-set’ to the relationship with the customer.

Starting from what has been already done, and what we - as Neosperience - have accomplished working with best-in-class clients, we can trace five major areas of improvement:

PERSONALIZED JOURNEY

Today's customers should not be considered - in a marketing perspective - as a generic and indistinct group of financial accounts. Client's value is more than just the amount of money transferred and deposited. Delivering personalized experiences (i.e. with proximity marketing) across all stages of the customer journey, you will be able to manage a one to one communication, tailor-cut the experience and gather critical information you can use for behavioral targeting.

INNOVATIVE TECHNOLOGY

Banks and financial institutions are already taking advantage of technology to improve efficiency and cut the costs. Now they have to take a further step, and implement innovations to create better experience. The purpose is to convert the idea of banking from a cold and frustrating experience to a simplified and streamlined one. Technology drives a change in how customers use their money (mobile payments, banking mobile app), and how banks change their essence (the Internet of Things, gamification, reinvented loyalty).

REAL-TIME DATA

"Big Data: everybody talks about it, nobody really knows how to do it." If there is an industry that needs to learn how to employ big data, that is banking. All information gathered through digital and physical channels can help banks to understand what their customers want and, consequently, elevate the quality of service. The best way to use big data is to implement an analytics dashboard to transforma data into actionable predictions.

INBOUND MARKETING

Financial services providers and inbound marketing are more connected than it may seem. Traditional advertising is too expensive, with a skyrocketing cost per conversion. The best way to attract qualified leads and guide them to conversion is to establish your brand as the primary source to find information and solve customers' problems. Content marketing - the core of the inbound methodology - allows banks to connect with clients in a non-intrusive way, helping and educating them.

SOCIAL CONNECTIONS

What do social media have to do with banking customer experience? Everything. Presiding over relevant social networks, a bank is able to show its human side, too often hidden behind bureaucracy and cold numbers. Facebook, Twitter and Co. allow you to build trust, provide a superior customer service in real-time (just think about Facebook Messenger), answer promptly to challenges, questions and threats. And - why not? - sell your products through social advertising and buy buttons.

Growing expectations and the almost endless pool of financial institutions fighting to conquer customer’s heart (and provide a wide range of products) mean that banks must reshape their marketing strategy, customer service, and CRM. The only way for banks to achieve a successful transition to digital is to focus on key areas to increase customer retention, raise the brand value and ultimately deliver amazing experiences.

YOU MIGHT ALSO LIKE: How Social Commerce War Will Change Retail Customer Experience

To help you provide a strategic advantage to your organization, Neosperience has crafted the first DCX 7-Steps Checklist, with requirements and insights for a successful digital transformation. Download the free guide here:

Download DCX 7-Steps Checklist

Topics: Digital Customer Experience Financial Services Content Marketing Inbound Marketing Payment Big Data Mobile

3 Ways Mobile is Shaping the Future of Payments

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The payments scenario has evolved rapidly over the past decade. Currency of exchange, as old as human civilization, will probably face a faster change in the next five years. Just as paper money and the magnetic strip revolutionized markets, innovative - and fast-evolving - technologies will foster the rise of new ways to pay and even new currencies. In the era of mobile mind shift, of course, the main agent of change is digital technology: here are 3 ways mobile is shaping the future of payments.

Cash is dying but we won’t probably say goodbye to plastic credit cards anytime soon. While the card-processing system as a whole is not in danger, the proliferation of mobile devices will affect the way we make purchases. Apple Pay, launched few months ago together with the new iPhone 6, is at the forefront of this revolution. Destined to bring near-field communication (NFC) to the next level, this new technology will surely facilitate the move to payment using mobile technologies.

Add the Apple Watch to the equation, and you will see why analysts place Cupertino at the core of this rapid development. But Apple is not the only one to have a stake in this profitable business: together with giants like Google, eBay and Amazon, many small and medium startup companies are working behind the scenes to revolutionize payment concepts and structures.

It’s not by coincidence that the first industry to feel the wind of change is retail, already undergoing major shifts as a result of the disruptive impact of E-Commerce and the Internet-of-Things. Customers are moving away from the ‘payment status quo’, eager to embrace alternative ideas - just think of the virtual Bitcoin or Facebook’s peer-to-peer social transaction. People are adopting new ways to trade are retail banks are rebuilding customer experience. Eventually, also brands will need to realign their visions and reshape their commercial models for this new empowered customer.

As it is such a wide topic, instead of exhausting all elements of the discussion, we will highlight the 3 key areas involved in this evolution:

  • New ways to pay: smart commerce and mobile in-store payments (mobile point-of-sale) are two major effects of the transition to a seamless and omni-channel customer experience, but digital transformation will also concern other technologies like mobile wallets, wearables (smartwatches, wristbands, activity trackers) and pay-by-fingertips scanners.

  • New currencies: many are already using alternative currencies, replacing traditional money in the name of a community-oriented approach. The most famous example is the Bitcoin, the notorious and debated open source cryptocurrency. A further step in this path could be the social media currency (i.e. payments with a tweet), that will allow users to make purchases without leaving social networks.

  • New players: the currency revolution is opening the door for new players, that will enter the challenge demanding their piece of cake. Some are already well-known companies with new products - Amazon Local Register, Apple Pay, Breadcrumb by Groupon - some are hardened newcomers ready to act as middlemen between customers, banks and their money - Venmo, Snapcash, Square Cash, DigiMo.

In the Age of the Customer, an innovative customer journey should also take into account different solutions that make payment seamless, easy, secure and privacy-friendly. Mobile devices rewrite the boundaries of digital customer experience, and it doesn’t make so much sense that we mostly still rely on cash, debit and credit cards to pay for things.

To help you provide a strategic advantage to your organization, Neosperience has crafted the first DCX 7-Steps Checklist, with requirements and insights for a successful digital transformation. Download the free guide here:Get the DCX 7-Steps Checklist

Topics: Digital Customer Experience Analytics Retail Financial Services Payment Mobile

How Digital Is Changing Retail Banking Customer Experience

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Usually, when we talk about the effects of digital transformation, we tend to focus on companies producing shopping consumer goods. But there is another ‘industry’ that is effectively searching for innovative ways to deal with customers: retail banking. Digital technology is dramatically changing the way clients interact with banks, forcing them to evolve from traditional bank counter operations to online services. A new era for retail banking customer experience.

Mobile banking is already an important aspect of our daily life, but analysis often just study how Internet and apps have changed payments and deposits. Money sharing is just one side of the coin. The other one, even more important, is how digital is redefining customer experience. At the heart of this transformation we find two trends:
  • The increasing competition from emerging digital banks, lowering the cost of financial services.

  • The emergence of a mobile mind shift, with financial institutions finally focused on putting customers at the core of their strategies and creating a consistent experience.

Truth is customers now evaluate their banking experience the same way they would do for consumer goods retailers, in terms of interactions and experiences. As they use multiple touchpoints, they want banking to be easy, fast, personalized and accessible wherever they are whenever they need it. The ability to deliver a seamless service through all touchpoints - both physical and digital - is crucial to enstablish and mantain long term relationships.

Growing expectations mean that banks must reshape their marketing strategy, CRM and even their identity. The only way to achieve a successful transition to digital banking is to focus on key areas to create engagement, raise brand value and deliver amazing experiences.

There are 4 strategic areas to achieve a meaningful and innovative transformation:

  1. Big Data: if there’s an industry where big data can really elevate service, that is banking. Digital demands new model and assets to collect data, test and transform them into useful insights (i.e. using analytics dashboards)

  2. Content Management: when you decide your marketing mix, you can’t ignore the power of storytelling. To create your brand image and adapt it to times of constant evolution, you need to set up a proper content marketing strategy, to connect with customers and engage them on a deeper level.

  3. Social Media: talking about engagement, social networks are crucial to talk with clients and prospects and let them talk to you. Using Facebook and Twitter, a bank is able to show a warm human face, build trust and answer in real-time to opportunities, questions and threats.

  4. Mobile Experience: today there’s no banking without mobile. Even in less developed markets, financial institutions now offer a complete online service to their clients, providing a consistent experience across all touchpoints (right-time personalization and Apple Pay are just two examples). To convert banking from a cold experience to a simplified, streamlined, friendly and easy one.

And remember: the first step for a real digital transformation in banking is to stop considering your customers as generic account numbers.
Topics: Digital Customer Experience Financial Services Mobile Internet of Things

How Apple Pay Makes the Difference in Your Digital Customer Experience

Apple_Pay_Digital_Customer_Experience

Money is probably as old as human civilization. People once used sheep and goats as money: domestic animals and food served as currency in ancient times. Metal coins have been around since 700 B.C., and the Chinese began using paper money in 140 B.C. It became a popular means of tender during Europe’s Renaissance and later in the American colonies.

But paper money has drawbacks. For instance, it’s easy to steal. And if something valuable, such as gold, does not back it, notes can proliferate and lose their worth.

After World War II, money began to convert from paper to plastic. In 1950, Diners Club introduced a credit card that people in New York City could use to pay for restaurant meals.

Payment-card technology turned a new page in 1979, when Visa brought out an industry first, the electronic data-capturing terminal. This is the now-commonplace system whereby a merchant or consumer swipes a plastic card with a magnetic stripe through a unit that automatically secures authentication and approval from the cardholder’s bank.

Today, with 12B USD between credit and debits and 200M credit card transactions a day just in US, the way people pay for items matters more than ever.

Now in most developed countries credit cards are the dominant payment form. However, the ubiquitous credit-card magnetic stripe, with exposed numbers that make it so easy to compromise is as outdated as VHS videotapes.

A truly mobile wallet has long be described as imminent, but it remained elusive; most industry efforts has been a disappointment or have not yet worked well enough for mainstream adoption.

One reason for this might be that most people that worked on mobile wallets started by focusing on a business model centered on their own interests, instead of focusing on customers and their experience.

Following its user-experience centered tradition, Apple unveiled yesterday a new payment process called Apple Pay.

Apple Pay key element is a new chip, called “secure element”, embedded in the upcoming iPhone 6 and 6S that keeps your personal information secure and private, linked to Passbook.

With Apple Pay, that will be release in October as an update to iOS 8, you can easily use your future iPhone 6 camera to take your card information and add it to Passbook. After that, you can just pay with your touch, thanks to link between the iPhone payment components and fingerprint reader.

It’s important to notice that when you add or use a credit card, Apple doesn’t store the credit card number or merchant information. When you pay, Apple uses instead a dynamic code that last for the duration of that only transaction, that will remain private between you, your merchant and your bank.

This for the physical world, thanks to NFC-enabled POS (Point of Sales) devices.

To extend this innovation to make online purchasing just as fast and secure, improving a process that is really really cumbersome, with long forms you have to fill out every time you shop for an item, Apple introduced yesterday one-touch checkout.

As in the physical world, also online you can make a purchase within a digital customer experience app with no card number entry, no need to type addresses, or expiration date, in essence: no card information shared with merchant, thanks to the one time payment number generated by the secure element embedded in your phone.

At Neosperience, we bet Google and PayPal have been up all night updating their strategic plans. It looks like that the time to allow your customer pay you with a touch has finally come.

Topics: Digital Customer Experience Society Neosperience Apps Innovation Neosperience iOS Retail Financial Services Fashion Luxury and Beauty Payment