The future of banking and transformative CX

To truly thrive, banks need to provide value beyond handling money and deliver transformational customer experience.

Joe Pine and James Gilmore pioneered customer experience with The Experience Economy. In this book, they share four stages to economy value: commodities, products, services and experiences.

Banks are on the verge of the highest level of economic value: staging experiences.

Today, the great majority of businesses are about better delivering their services and experiences. This is particularly noticeable in a highly regulated environment such as financial services, where complaints handling hasn’t historically met customers’ standards (the Nordics have a few tricks to teach us on that front).

Fortunately, technology is advancing fast and businesses are maturing. Thanks to these trends, banks are now on the verge of the highest level of economic value: staging experiences. These experiences are transformative and offer a differentiated position, which deliver lasting customer value in a very personal way.

Customer experience goes beyond the core service

For most customers, using banks is only about storing and moving money around, but this is 'just' a service. Such a service can't be genuinely different. Therefore, financial services brands can only achieve true differentiation by going beyond the core offering. And they have started doing just that.

SEE ALSO – Citi: 'Our customers are not data points, they're people'

Take for example SoFi, which specialises in loan refinancing and mortgages. They stand out by offering side services like career coaches and counsellors. They even hosted 400 events for their customers to meet and discuss common interests. What do they stand to gain from these events? They use the learnings from these meetings to inform future product builds.

If we look at brokers, we can discuss TD Ameritrade. The broker built a Twitter chatbot, which, as you would expect, helps customers find their local brand and process deposits. Where it truly shines, though, is by sharing relevant news and educating on investing through videos.

The bot, more than just a channel, adds genuine value to customers and enable them to make more informed decisions.

Financial services brands can only achieve true differentiation by going beyond the core offering.

Making customer experience frictionless

Banks can reduce the time it takes to withdraw cash (to less than 10 seconds) by using a customer's smartphone. This approach removes friction for customers by relying on existing habits. And customers love it, considering they always spend a lot of time on their devices anyway. It's a true example of businesses meeting customers on their terms.

As a matter of fact, some banks are even going one step further. They are enabling their customers to use voice through their mobile app for transactions as a new feature.

We're not talking about giving an easy link to call or video chat customer services, we're talking about letting Apple's Siri handle banking transactions like Singapore's OCBC is now doing.

That being said, those who will truly stand out take it even further. Indeed, CapitalOne and U.S.Bank are letting you use Amazon Alexa to transact with them. Pay your bills, check your balance and get insights on spend by chatting to your digital assistant.

Can it ever become more frictionless than this?!

The examples discussed above will require a significant investment, which is challenging to unlock. Complex or legacy systems might even prevent you from doing it altogether. If that's the case, not all hope is lost, as there is still a middle-ground solution. This middle-ground gets businesses closer to delivering differentiated experiences: partnerships.

Some banks are even going one step further. They are enabling their customers to use voice through their mobile app for transactions as a new feature.

If you can't build it: open up

Truth is, it is time for banks and FinTechs to collaborate. More and more FinTech businesses are arriving in the market, which means there are now many examples of potential partners. The real challenge is about finding the right partnership for your bank, rather than finding a potential partner. The right partners will enable you to augment and complement your brand and your customer experience.

Let's take Toshl Finance a personal budgeting app as an example. They help customers keep track of their spend. To do this, they enable customers to connect their bank accounts into a single view, across providers. This creates true transparency and enables customers to make the most out of their financial lives thanks to a comprehensive view of their finances. (Caution: some banks will reserve the right not to provide fraud reimbursement should customers connect their accounts to third party apps.)

Alternatively, customers can use investing start-up Moneybox to expand the value they get in financial services. Once the customer connects their app to their card, all future expenses are rounded up (to the next pound). This is then used to invest on the stock market through tracker funds.

By doing this, Moneybox enables customers to get closer to their life goals by making the most of their finances. This service is powerful because customers do not need to make any conscious effort. Without thinking about it, customers will get higher value out of their banking, transforming their lives.

However, there is a key consideration should you want to partner with the above examples or any other FinTech. Your business will need to open up, for which tight regulations come as a key obstacle. But if you want to become a true vanguard, it is a necessary step.

The right partners will enable you to augment and complement your brand and your customer experience.

Getting ready to implement

Even if you do not have resources in-house, you can still design a great customer experience. Simply look at ways you can integrate and partner with third parties. These integrations will you’re your business a better shot at standing out in the market. You know the saying: alone you may go fast, but together, you'll go far.

If, on the other hand, you are lucky enough to have available resources, there are 3 success factors you need to make this project a success.

Either way, financial services are entering a new stage of economic value. Question is, will you be part of shaping up next practice in the making?