A year ago, we predicted that customer experience would determine the winners and laggards among banks in 2017. In 2018, it is the turn of a reimagined customer journey to determine which banks survive and which will fall by the wayside.
What is this journey that we are speaking of? Over decades, banking businesses transitioned from a product-centric approach to a customer-centric, and then, customer-specific model. Their goals also changed from maximizing customer lifetime value to maximizing value at every life stage. In 2018, banks will pursue a more nuanced goal – understanding the individual journeys of customers at the same life stage, and partnering them through that cycle. To do that, they must gear up for the following:
More channels of engagement, including bank-owned, partner-owned and third party channels, all working to make banking as invisible as possible.
AI-based channels like chatbots and smart assistants will become more prevalent, as will entities such as AISPs (Account Information Service Providers) and PISPs (Payment Initiation Service Providers) when the Payment Services Directive 2 comes into force. Already, some of these touch points are having a say in which bank or gateway will finally carry the customer’s financial transaction. Besides contending with the influence of channels that they do not own, banks also need to prepare for a scenario where the bulk of transactions and enquiries will originate in such channels. As more and more third parties use bank APIs to build applications or sell bank products on their distribution channel, the points of origination of transactions could be myriad. Moreover, in the future the point of origination could range from an application to a home connected speaker, an autonomous car or any connected device. The focus of banks will be to build customer journeys for contextual banking services to the customers at the moment of truth, whether it is on their existing traditional channels, new channels or on third party partner owned channels.
As channels evolve, so will the interacting parties on either side. A long time ago, both banking customer and touch point wore a physical form. With the arrival of ATM, Internet and Mobile Banking, the touch point turned virtual. Going forward, everything will be virtual, as intelligent assistants start to deal with banks on their owners’ behalf. This is yet another change in the customer journey that banks should prepare for.
Reimagining customer journeys will be as important for corporate banking business, as it is for the retail business. Just as banks need to understand retail customers’ life stage and journey better, they need to focus on understanding the corporate customers’ business better.
Corporate and small business customers will embark on new journeys. The challenge before banks will be to stay relevant to those journeys by providing immersive experiences to customers at the moment of truth. Where customers are at the first or second moment of truth, there is an additional challenge to collapse that distance to zero to arrive at the zero moment of truth. At that point of closest connect, bank staff should be empowered to engage customers with the right messages.
One way to make the experience immersive is by offering APIs to integrate customer ERP systems with the banks’ own to enable seamless access to banking services from within the customers’ business processes. Some banks are going a step further, into their small business customers’ supply chain itself, to offer tailored solutions to manage accounts, invoicing, receivables and payables on their own (the banks’) platforms. There is also a case for banks to leverage their massive data resources and AI/ advanced analytics to devise a business and credit forecasting service for their business customers.
Progressive banks will abandon incremental change to pull out all the stops, using all the modern technologies at their disposal, right from analytics to AI to augmented reality to IoT, to be ready for these scenarios. The offering of banking services through Alexa, Amazon’s smart virtual assistant, is just a preview of things to come. In 2018, expect to see more of this and much more as banks reimagine the customer journey riding the digital wave of confluence of technologies.